Communities across the country are plagued with abandoned factories, crumbling mills, and ghostly strip malls that are not just environmental hazards and eyesores, but also drag down the value of the property around them. The Atlantic Cities’ Emily Badger recently wrote about two Michigan State University researchers that have proposed an innovative policy solution to address this problem – life insurance for commercial buildings.
The researchers--Rex LaMore and Michelle LeBlanc--have proposed requiring private sector entities to secure financial instruments, such as insurance and guarantee bonds, on newly constructed commercial and industrial structures. These instruments would ensure that at the end of a structure’s useful life, its host community would have the financial resources available to fund the structures deconstruction. This, in turn, the researchers stated, would end the current practice of private property abandonment and alleviate the hardships placed on a community to finance the removal of blighted structures.
Badger points out that “force[ing] companies to financially plan for a property’s end-game…could change how they think about every stage of the building’s life.” The system may even prompt developers to use building techniques and materials that leave a lighter footprint on the land.
