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Real Estate professional’s concerns regarding wind turbines

Presentation to public meeting Arran/Elderslie Municipality – Sept 30, 2010

Ladies and Gentlemen, thank you for the opportunity to address this meeting. My involvement with this subject started in West Grey where I made a presentation to council and later to a public meeting, sharing the platform with representatives of the Turbine Developer and others. After that I was asked to present my case to a public meeting in Meaford Municipality. I was pleased when Mark Davis gave me the opportunity to speak here this evening. I recognize that property types and uses are different in different areas but concerns are much the same and I will stick to my area of knowledge and talk about the impact that wind farms will have on property values in the area.

As it stands right now, this program has been rushed into place by a government hungry for brownie points in the form of bragging rights as to how much they are doing for the environment and their rush to be the leading wind generator in Canada. To put a rather jaded and skeptical slant on it, and I should probably say that this is just a personal opinion, I would say that it is politically driven in their hunger for the urban vote which is their power base.

This same government forced through the Green Energy Act which strips all the rights of the Municipal Government and therefore the rights of you and I in all dealings concerning alternative energy. Some Municipalities are actively fighting this.

The main problem we have here in Ontario is that some very poor locations have been chosen for these installations and the way in which the Turbine companies went about their business can only be described as somewhat underhanded.

Representatives of the company visited many of our residents to obtain option agreements on their land for the purpose of study and the erection of wind turbines. This was done before any hearings or discussions were held and thousands of dollars in signing bonus were offered. As they learn more, we have heard that several of the property owners who signed the agreement have expressed regret at doing so but are unable to obtain a release from the contract.

Our goal is two fold; first of all to make people aware of the consequences of their actions so that no more people make decisions that they may subsequently regret. Secondly we want to urge all Municipal Governments to support a moratorium on future development until proper and complete studies can be undertaken to get a full understanding of the health effects and the other consequences and also feasibility studies. These studies must be carried out by qualified and independent experts to ensure that all bias is eliminated.

On the subject of property values, I have made a point of talking to several people, property appraisers and real estate brokers in the areas where wind turbines are presently installed and the opinions there are very mixed. There are farmers in cash crop areas who are happy to have them for the extra bit of income they generate and, in those areas, we cannot say that there has been an effect on their property values because it has not been tested but there could be a definite effect on neighbours within sight of the turbines.

There are other areas that are more residential or recreational and, in those cases there is a definite reluctance on the part of buyers and therefore properties take a long time to sell and eventually we see a reduction in prices.

I am personally very aware of the rural real estate market throughout Grey County and parts of Bruce. As was stated in my introduction I have been in the real estate brokerage business for 40 years and, since 1991, I have been actively engaged in the sale of country homes and hobby farms in this area

The first and most important thing is to realize the nature of the rural part of the Municipalities. Many of the areas neighbouring the proposed development are residential, resorts, country homes and weekend getaways. The biggest market for buyers for rural properties in this area is the urban centres to the south. Those buyers come here for the natural beauty of the area, for unobstructed views, for our woods, streams and lakes and our recreational facilities and for the peace and quiet of the country as an escape from city life. All of these qualities are actively promoted on the websites and in brochures and magazines put out by the Counties and the Townships.

The turbine companies will say that they have a study that shows that there is no reduction of property value due to the erection and operation of wind turbines. One of the developers sent me a copy of their report, all 164 pages of it, and I have since received another of just 85 pages. I spent a fair bit of time wading through this.

The larger one covers the sale of homes within 10 miles of 24 existing wind facilities in 9 states in the U.S.

I am not going to tell you that I have thoroughly digested all 164 pages but I did spend time on the study of area descriptions. 10 locations were described and I looked for any that might resemble parts of Grey and Bruce Counties.

Most of them have descriptions such as – Undeveloped highland, plateau grassland; a plateau with modest farming tracts and arid, undeveloped land; very flat land, largely made up of corn fields. You have probably seen some of the ads for companies involved in these developments and they always show acres of turbines but no buildings in sight for miles. I was hoping I might find some in the Hamptons where New Yorkers go for recreation or in resort areas in Florida or Arizona but no such luck. There were two that have a little resemblance to our area and in fact those did show a reduction in the increase in property values in the area of the turbines when compared to the state as a whole.

The published conclusion of the study lumps all areas together but when you take those two in isolation you will see some negative effects.

However our concerns are not with the U.S. The other study covered the Municipality of Chatham – Kent in South Western Ontario.

Chatham – Kent is attempting to position itself as a leader in Ontario’s renewable energy sector. I understand that at present there are 229 turbines operating or approved in the region..

In working through this study we find the same problem as with the U.S. one; namely that no consideration is given to the nature of the real estate market in the area. Who is the most likely buyer, what are they looking for in the way of property and lifestyle; do they really want to be surrounded by or in close proximity to huge turbines and a sea of flashing lights at night? What is the true effect on property values? I don’t believe that there are any valid studies on the effect on property values but there are definite instances where negative effects have been experienced.

The fact is that we are already experiencing some effect in parts of Grey County just from the threat of this development and this may also be the case in parts of Bruce. As soon as an option agreement has been signed, this fact has to be disclosed to a potential buyer. This creates uncertainty and that is one of the most negative forces affecting sales and values. I can give you one example of an evaluation on a parcel of land in West Grey. An evaluation was made without knowledge that the owner had signed an option and it was estimated at $125,000. A second evaluation was made (estate property) but this time there was full knowledge of the signing of the option and it was estimated at $75,000. That represents a 40% drop in estimated market value because of that uncertainty.

There have been several people in the meetings that I have attended who have moved from urban areas to the south and who would not have considered the area had they known of this impending development. Buyers have walked away from properties they liked upon hearing of potential turbine development.

I do a lot of advertising of our rural properties to Toronto and other urban centres. We have to disclose the plans to prospective buyers and people who are looking for their country home are reluctant to buy and will go further afield. It is inevitable that this will have an effect on property values. In many parts of the area those values have been increased considerably by the influx of these buyers.

Many long time rural residents count on the value of their farms or property to provide for them in their retirement. It is our opinion that the existence of wind turbines throughout an area such as this will seriously reduce property values, have a big impact on net worth and destroy the retirement plans of many of the owners of the affected lands and of their neighbours.

The threat of this development has pitted neighbour against neighbour and, if allowed to go ahead will do severe damage to the quality of life that we enjoy.

I firmly believe that because of the nature of these Municipalities, a wind turbine development will destroy the way of life of the rural residents of the Municipality.

As well as delaying any further development until all health and feasibility concerns are thoroughly studied and understood, the Turbine Developer should get to know more about the character and the features of theTownships and in so doing they will come to realize that this is a poor choice of location for their development.

A disregard of this will indicate that we are dealing with companies that have absolutely no concern for the health and well being of the population around them and will run rough shod over those people for their government subsidized revenue.

Mike McMurray
Royal LePage RCR Realty