Wind Turbines & Property Values
Condemnation valuation litigation involving acquisitions for roads, electric transmission lines and natural gas or petroleum pipelines is commonplace. Property valuation issues, particularly with respect to electric transmission lines, have been studied by accomplished and well-known experts in the fields of statistics and real estate appraisal for several decades and published in peer-reviewed, professional journals. But until a few years ago, there hasn’t been a comprehensive, statistically rigorous study analyzing the impact of wind turbines on property values.
The timing couldn’t be better. Wind energy is rapidly expanding in the United States and abroad. According to the American Wind Energy Association, by the end of 2012 the U.S. had more than 60,000 MW of wind energy produced by more than 45,000 wind turbines. This is enough to power 15 million homes. During the year 2012, wind energy accounted for 42% of the new generation in the U.S. While wind power accounts for a bit less than 4% of the United States’ power generation, the amount of wind generation is increasing by almost 30% annually. Stakeholders are often concerned about property values being adversely affected by new wind projects.
I’ve never understood why the presence of wind turbines would have anything but a positive impact on the immediate environment. Wind turbines are impressive—rows of spectacularly tall white towers, with massive blades silently slicing through the air, generating clean, renewable energy with none of the negative environmental impacts associated with fossil fuel plants, and none of the potential danger and fuel disposal issues associated with nuclear generation. They must be an environmentalist’s paradise. How could their presence evoke anything other than a warm, fuzzy feeling?
It turns out there are several issues raised by wind energy detractors. First, the cost is prohibitively expensive when compared to conventional generation—so much so that in many instances they would not exist without taxpayer subsidies. They can apparently be quite noisy. They can kill bats and birds, disrupt animal habitats and drive wildlife from the area. Noise and vibration from the turbines are blamed for causing myriad human health problems, including sleep problems, headaches, and nervous disorders. All this makes siting wind farms a challenge.
Each of these issues is a worthy subject for future blog posts. But today’s post will focus on the claim that the presence of wind turbines diminishes the value of property in their proximity. Opponents of wind projects assume that they will negatively affect property values, perhaps for no other reason that they are opposed to the projects. Most studies done prior to 2009 relied on surveys of homeowners or real estate professionals rather than actual sales data, and they employed simple statistical techniques that can be dramatically influenced by small numbers of data points and the failure to include all the variables affecting property values. And only two of the studies were published in peer-reviewed journals.
In 2009 the U.S. Department of Energy’s Lawrence Berkeley National Laboratory released a study analyzing the issues of whether proximity to wind energy facilities has an adverse impact on property values. The study was based on analysis of almost 7,500 single-family home sales, making it by far the most comprehensive analysis to date on the potential impact of wind projects on residential property values. It analyzed data on the sales of homes from 1996 to 2007 situated within 10 miles of 24 existing wind facilities in nine different U.S. states; the closest home was 800 feet from a wind facility. The study concluded that home sales prices are very sensitive to the overall quality of the scenic vista from a property, but that a view of a wind energy facility did not demonstrably impact sales prices. The researchers found no statistically observable differences in prices between homes located closer to wind facilities and those located further away, or for homes that sold after the announcement or construction of a wind energy facility when compared to those selling prior to announcement. Even for those homes located within a one-mile distance of a wind project, the researchers found no persuasive evidence of a property value impact. This study analyzed the potential effect of wind facilities after construction of the facilities.
A few months ago, the Lawrence Berkeley National Laboratory released another study which analyzed both the post-announcement/pre-construction, as well as the post-construction, impact of wind facilities on property values. This study analyzed a huge number of home sales–50,000 homes in 27 counties in nine states. The homes were within 10 miles of 67 different wind facilities, and 1,198 sales were within 1mile of a turbine. Again, the study found no statistical evidence that home values near turbines were affected in the post-construction or post-announcement/pre-construction period. The 2013 study report includes a comprehensive analysis of existing studies investigating the impact of wind facilities on property values for anyone interested in the research done by others.
It remains to be seen whether these studies will put the property value diminishment issue to rest. But I doubt it. Detractors can cite to the statement in the abstract of the 2009 study, which states: “Although the analysis cannot dismiss the possibility that individual homes or small numbers of homes have been or could be negatively impacted, it finds that if these impacts do exist, they are either too small and/or too infrequent to result in any widespread, statistically observable impact.” It will be difficult to convince landowners who oppose nearby wind projects that their property value will not be diminished, in spite of the Berkeley Lab studies.