Development on Property Values Lucija Muehlenbachs Resources for - - PowerPoint PPT Presentation

Measuring the Impact of Shale Gas Development on Property Values

Lucija Muehlenbachs Resources for the Future Beia Spiller Christopher Timmins Environmental Defense Fund Duke University

MANAGING THE RISKS OF SHALE GAS DEVELOPMENT Resources for the Future, June 27, 2013

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Hopewell Township, Pennsylvania. Photo: Scott Goldsmith, National Geographic.

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Groundwater concerns

gasland

Photo: Rick Kintzel Photo: Pittsburgh Student Environmental Coalition

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Introduction Can impact property values:

• (+) from economic growth/royalties
• (-) from environmental risks/noise/landscape

Impacts may differ by:

• Proximity
• Drinking water source (groundwater vs. piped)

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Objective

Estimate the effect on property values:

1. Proximity to a drilled well 2. Proximity to a permitted well

• Identify the effect groundwater

contamination concerns have on property values.

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Strategy

• Determine distance at which a well has an

effect on property values

• Measure difference in property values

before and after a well is drilled

• Compare the difference between piped-

water homes and groundwater dependent homes

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Study Area: Washington County, PA

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All Properties Sold 2004-2009

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Finding Similar Properties

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Identifying Extent of Impact

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Findings from Washington County Properties closer than 2km (1.2 mi) to a well pad:

• 10% increase
• Unless the property depends on groundwater: 16%

decrease

• Groundwater concerns cost 26% of property value

No effect from permitted, not drilled, wells

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Caveat Our identification strategy compares houses inside and outside 2 km of a well:

• Impact is relative to overall changes in the

county

• Houses outside 2 km still exposed to shale gas

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Future Work  Overall impact on housing markets  Data provided by CoreLogic:

• Marcellus and non-Marcellus Counties in PA

and bordering NY

• 1994-2012

Property Sales in PA and NY, 1994-2012

Public Water Service Areas

Summary  Use a combination of quasi-experimental techniques and detailed geographic information to recover the impacts of proximity to shale gas wells.  Significant positive impacts on piped-water households.  Significant negative impacts of shale gas development on groundwater dependent households.

Thank you! muehlenbachs@rff.org