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Wind projects could depress property values  

Credit:  By NANCY MADSEN, Daily Courier-Observer, www.mpcourier.com 20 July 2011 ~~

POTSDAM – A recent Clarkson University study found that wind power projects might depress the prices paid for surrounding properties by as much as 17 percent.

The study, “Values in the Wind: A Hedonic Analysis of Wind Power Facilities,” is based on the areas around three wind farms in Lewis, Clinton and Franklin counties.

Clarkson assistant professor Martin D. Heintzelman and doctorate degree candidate Carrie M. Tuttle collected data from 11,331 residential and agricultural property transactions over nine years from Clinton, Franklin and Lewis counties.

“Overall, the results of this study are mixed as regards the effect of wind turbines on property values,” the report said. “In Clinton and Franklin Counties proximity to turbines has a usually negative and often significant impact on property values, while, in Lewis County, turbines appear to have had little effect, and, in some specifications, a positive effect.”

Lewis County had 1,938 sales used in the study, while Franklin had 3,251 and Clinton 6,142. There were 3,969 repeat sales for 1,903 parcels. The study used GIS software to match the parcels to turbine location. The data showed that properties at one mile from towers had a decrease of between 7.73 percent and 14.87 percent in sale prices. When the nearest turbine is a half-mile away, the sales price has a decline of between 10.87 percent and 17.77 percent.

“By and large, I was not surprised,” Mr. Heintzelman said Monday afternoon. “Anti-wind groups have a lot of complaints, and if those issues are perceived to persist, it is going to affect property values.”

But the data from Lewis County didn’t necessarily agree, showing positive trends. The researchers tested whether the effect was negative at first and then turned positive over time, but the Lewis County data showed increases in property values from the get-go, which mellowed with time.

“Another possible interpretation is that there is something about the design or placement of the facilities in Lewis versus Clinton/Franklin counties, which has reduced or eliminated the negative impact on property values,” the report said.

And, Mr. Heintzelman said, another option is that people in Lewis County could have an entirely different feeling about the turbines compared with people in other counties.

The report has been accepted for publication in the peer-reviewed journal “Land Economics.”

Like previous studies, the Heintzelman one has a small proportion of properties close to the turbines. Overall, 461 were within three miles.

“There is still more work to be done in the area,” he said. “In these study areas, we need more data post-turbine, on sales after the turbines are built.”

They ran a regression analysis with three different dates – when the draft environmental impact statement was submitted to the state Department of Environmental Conservation, the date the final environmental impact statement was approved and the date when the turbines became operational.

The study accounts for other characteristics of the home, including distance to a major road, value of personal property included in the transaction, whether the home is in a village, number of bedrooms and bathrooms, square footage of the house, age of the house and lot size.

The analysis also showed that local buyers have about half as strong an adverse feeling to being near turbines when compared with non-local buyers, which “suggests that non-local buyers are more wary of turbines and their effects than local residents which may also be a function of familiarity.”

The results suggest that nonparticipating landowners are due some kind of compensation. Landowners receive lease payments and towns and school districts get proceeds from payment-in-lieu-of-taxes agreements.

“I think that is what has to be thought about,” Mr. Heintzelman said. “There are two channels for compensation: property owners get money from the developer for their land and towns get PILOT payments. Even with those PILOT payments, there are people who are being harmed with their property values. We need to think about how the PILOT is spent or think about other mechanisms to compensate individuals who have been harmed.”

Health degradation and aesthetic damage are “likely to be capitalized into property values and, as a consequence, property values are likely to be a reasonable measuring stick of the imposed external costs of wind development,” the report said.

Source:  By NANCY MADSEN, Daily Courier-Observer, www.mpcourier.com 20 July 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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