Despite the substantial literature on environmental hazards' effect on residential property value, the findings are inconsistent. Little attention has been given to the relationship between hazard proximity and risk perception and their distinct roles in affecting housing values. This research proposes a multistage causal model in which the influence of hazard proximity on property value is mediated by risk perception. The model was tested for three hazards (flood, hurricane, and toxic chemicals) using data from 321 households in Harris County, Texas. The results indicate that risk perception is a mediating factor between hazard proximity and property value, but there is some evidence that the mediation is partial rather than complete. Hazard proximity can be perceived as a potential risk and an environmental amenity at the same time for certain types of hazards. These two perceptions operate in opposite directions when affecting housing value. Implications for environmental hazards disclosure policies are discussed.
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