US Property Values

I.               The Impact of wind power projects on residential property values in the Unites States: A Multi-Site Hedonic Analysis

Although wind power development is continually expanding in the United States, there are often concerns from locals, “during the siting and permitting process.” These concerns can be categorized into area stigma, scenic vista stigma, and nuisance stigma. Area stigma is the concern of having the area look highly developed, which could possibly have negative impacts on local property values. Scenic stigma is the concern than the value of a home will go down because wind turbines can be seen. This is thought to ruin an otherwise scenic view. Nuisance stigma is the concern of annoying sounds, shadow flicker, etc.

There have been other studies done on the impact of wind turbines on property values; however, some of these studies have shortcomings. Only two of these studies have been peer-reviewed. Other studies use small data sets, rely on surveys of homeowners, and have used simple statistical analysis techniques that have limitations.

This study uses a hedonic pricing model to analyze the data. Economists and real estate professionals often use this technique. “[T]he typical goal of a hedonic model is to estimate the marginal contribution of individual house or community characteristics to sales prices.” Hedonic models are useful to give value to goods that, “do not have transparent and observable market prices.” A base hedonic model was used in addition to seven alternative hedonic models. These help to show the reliability of the results. A repeat sales model was also analyzed.

Site Selection

Ideal sites for this study have a large number of well-documented residential transactions both before and after wind facility construction. They must also be, “representative of the types of wind power projects being installed in the United States.” Two hundred and forty one wind farm projects were identified that fit this criterion, which was refined down to 56. Based on data availability and feasibility, ten study areas including 24 wind farms were selected. Benton and Walla Walla Counties, WA, Umatilla County, OR, Howard County, TX, Custer County, OK, Buena Vista County, IA, Lee County, IL, Kewaunee and Door Counties, WI, Somerset County, PA, Madison and Oneida Counties, NY were selected areas.

Alternative Hedonic Models

The alternative hedonic models used include view and distance stability models, a continuous distance model, an all sales model, a temporal aspects model, a home orientation model, and a view and vista overlap model.

Conclusions

Even though in public surveys the general public shows acceptance of wind turbines, locals usually raise concerns during the planning process. One of these major concerns is the impact to property values because of wind turbines.

“Based on the data and analysis presented in this report, no evidence is found that home prices surrounding wind facilities are consistently, measurably, and significantly affected by either the view of wind facilities or the distance of the home to those facilities. Although the analysis cannot dismiss the possibility that individual or small numbers of homes have been or could be negatively impacted, if these impacts do exist, they are either too small and/or too infrequent to result in any widespread and consistent statistically observable impact.”

Cappers, P., Hoen, B., Sethi, G., Thayer, M., Wiser, R. (2009). The Impact of wind power projects on residential property values in the Unites States: A Multi-Site Hedonic Analysis. Ernest Orlando Berkeley National Laboratory. Retrieved from: http://eetd.lbl.gov/EA/EMP/re-pubs.htm