The Impact of Wind Facilities on Residential Property Values What - - PowerPoint PPT Presentation

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The Impact of Wind Facilities on Residential Property Values What - - PowerPoint PPT Presentation

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The Impact of Wind Facilities on Residential Property Values What We Know And What We Dont Know Ben Hoen & Ryan Wiser Lawrence Berkeley National Laboratory benhoen2@earthlink.net, rhwiser@lbl.gov 10 Area Preliminary Results June 2008

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Energy Markets and Policy Group • Energy Analysis Department

The Impact of Wind Facilities on Residential Property Values

What We Know And What We Don’t Know

Ben Hoen & Ryan Wiser

Lawrence Berkeley National Laboratory benhoen2@earthlink.net, rhwiser@lbl.gov

10 Area Preliminary Results June 2008

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Energy Markets and Policy Group • Energy Analysis Department

The Impact of Wind Facilities on Residential Property Values

  • Subject & LBNL Study Methods

Overview

  • Study Results

–Area Stigma –Scenic Vista Stigma –Nuisance Effects

  • Conclusions
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Energy Markets and Policy Group • Energy Analysis Department

Proximity, Aesthetics & Property Values Are Strongly Linked

This linkage is well studied

↑$ ↓$

Average Home Highway Transmission Lines Green Space Ocean Front

↑$

↓ $

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Energy Markets and Policy Group • Energy Analysis Department

Property Value Concerns For Wind Projects Fall Into Three Possible Categories

  • 1. Area Stigma: Concerns over

“industrialization” of area

  • 2. Scenic Vista Stigma: Concerns
  • ver decrease in quality of scenic

vistas from homes

  • 3. Nuisance Effects: Potential

health/well-being concerns of nearby residents

Each of these effects could impact property values

No one will move here! It will ruin my view! I won’t be able to live in my home!

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Energy Markets and Policy Group • Energy Analysis Department

Relatively Few Wind & Property Studies: A List Of The Most Publicized

Author (Year) Location Method Test Conclusion** Jordal-Jorgensen (1996) Denmark Hedonic Area Stigma ↓ $ ? Sterzinger et. al. (2003) 10 US sites Simple Area Stigma ↑ $ ? Haughton et al. (2004) Cape Cod, MA Survey Area & Scenic Vista Stigma ↓ $ ? Poletti (2005) WI / IL Simple Area Stigma ↓ $ & ↑ $ x Delacy (2005) Washington Paired Sales Area Stigma ↑ $ ? Sims & Dent (2006) UK Hedonic Area Stigma ↓ $ * Hoen (2006) New York Hedonic Area Stigma/ ↓ $ x Scenic Vista Stigma ↑ $ x Poletti (2007) WI / IL Simple Area Stigma ↓ $ & ↑ $ x Crowley (2007) 12 US Counties Survey Area Stigma & Nuisance no change ?

Overview

  • Few tested if results were statistically significant
  • Most tested for just area stigma
  • None of the studies, except Hoen, visited homes
  • None have been published (in journals) and only Hoen has been academically

peer reviewed

  • THIS DOES NOT NECESSARILY MEAN CONCLUSIONS ARE WRONG

**Notes: ↓ $ = decrease in value found, ↑ $ = increase in value found

* statistically significant at 90%, X not significant at 90%, ? statistical significance not reported

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Energy Markets and Policy Group • Energy Analysis Department

LBNL Study Methods Build And Improve On Past Work

  • Multiple U.S. wind project locations
  • Sample sizes of over 450 for each area
  • Valid residential sales values (not assessed values)
  • Field visits to each home
  • Hedonic pricing model
  • Test for all three potential effects
  • Rigorously analyze data & peer review results
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Energy Markets and Policy Group • Energy Analysis Department

Data Collected From 11 Study Areas Surrounding More Than 25 Wind Facilities

3 Adjoining Counties Washington & Oregon 7 Facilities: 557 WTG 790 Sales Riverside Cnty, CA 30+ Facilities: 2000+ WTG 758 Sales

Howard Cnty, TX 46 WTG 790 Sales Custer Cnty, OK 2 Facilities: 98 WTG 1086 Sales Lee Cnty, IL 557 WTG 790 Sales Buena Vista Cnty, IA 5 Facilities: 381 WTG 1023 Sales

Kewaunee Cnty, WI 2 Facilities: 32 WTG 811 Sales

Wayne Cnty, PA 43 WTG 554 Sales Somerset Cnty, PA 3 Facilities: 34 WTG 481 Sales Madison Cnty, NY Area 1: Madison 7 WTG 462 Sales Madison Cnty, NY Area 2: Fenner 20 WTG 695 Sales

Roughly 8500 transactions

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Energy Markets and Policy Group • Energy Analysis Department

The Impact of Wind Facilities on Residential Property Values

  • Subject & LBNL Study Methods

Overview

  • Study Results

–Area Stigma –Scenic Vista Stigma –Nuisance Effects

  • Conclusions
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Energy Markets and Policy Group • Energy Analysis Department

Preliminary Results Based On Data From 10 Of The 11 Areas* and Initial Analysis

NOTE OF CAUTION: The following graphs and findings are preliminary, so conclusions based on these results should be considered preliminary as well

* Data from Riverside County, CA area not included in these results

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Energy Markets and Policy Group • Energy Analysis Department

Area Stigma

There Is No Evidence That Facilities Negatively Affect The Whole Community In Any Period After Announcement

3% 3% 3% 4% 5%

0% 1% 2% 3% 4% 5% 6% Post Anc Pre Cnstr 1st Yr Post Con 2nd Yr Post Con 3rd Yr Post Con 4th Yr Post Con 4+ Yrs Post Con

All Significant At The 90% Level

DV = L N of S alePric e ($96), P re Anc omitted n = 7632, R 2 = 0.77, f = 224

% Change Regional 1996 $

% Change In Price as Compared to Pre Announcement Price Levels After Controlling For Housing Inflation

“Post Anc Pre Cnstr” = After facility announcement yet before construction, “1st Yr Post Con”= the 1st year after facility construction commenced

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Energy Markets and Policy Group • Energy Analysis Department

The Impact of Wind Facilities on Residential Property Values

  • Subject & LBNL Study Methods

Overview

  • Study Results

–Area Stigma –Scenic Vista Stigma –Nuisance Effects

  • Conclusions
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Energy Markets and Policy Group • Energy Analysis Department

To Test For Scenic Vista Stigma,

Scenic Vista Itself Needs To Be Controlled For

They might pull in two directions

↑$

↓$

Without separating out scenic vista, measurements of the effects of the view

  • f wind turbines might be artificially inflated
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Energy Markets and Policy Group • Energy Analysis Department

Five Qualitative Rankings For Scenic Vista Each home was given a scenic vista rating

Poor Average Premium Below Average Above Average

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Energy Markets and Policy Group • Energy Analysis Department

Buyers & Sellers Care About Scenic Vista

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Energy Markets and Policy Group • Energy Analysis Department

Four Qualitative Ratings For Dominance Of View Each home was given a view of turbines dominance rating

Minor Moderate Substantial Extreme

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Energy Markets and Policy Group • Energy Analysis Department

Scenic Vista Stigma

There Is No Statistical Evidence That Views Of Turbines Affect Home Values Using Qualitative Rating Method

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Energy Markets and Policy Group • Energy Analysis Department

The Impact of Wind Facilities on Residential Property Values

  • Subject & LBNL Study Methods

Overview

  • Study Results

–Area Stigma –Scenic Vista Stigma –Nuisance Effects

  • Conclusions
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Energy Markets and Policy Group • Energy Analysis Department

Nuisance Effects:

Even Homes Located Very Near Wind Facilities Are Seemingly Unaffected

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Energy Markets and Policy Group • Energy Analysis Department

Nuisance Effects:

And Maximum Probable Effects Are Fairly Small

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Energy Markets and Policy Group • Energy Analysis Department

The Impact of Wind Facilities on Residential Property Values

  • Subject & LBNL Study Methods

Overview

  • Study Results

–Area Stigma –Scenic Vista Stigma –Nuisance Effects

  • Conclusions
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Energy Markets and Policy Group • Energy Analysis Department

What Conclusions Can Be Drawn From Study Results?

  • Area Stigma: We find no statistical evidence that homes near

wind facilities are stigmatized by those facilities as compared to

  • ther homes in the region
  • Scenic Vista Stigma: We find no statistical evidence that homes

with a view of wind turbines have different values than homes without such views

  • Nuisance: We find no statistical evidence that homes within ¼,

½ and 1 mile of turbines sell for different values than those further away.

Given our sample and preliminary analysis…

Bottom line: Though one cannot rule out isolated cases where property values are negatively impacted, any such impacts within

  • ur sample are not widespread nor statistically identifiable
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Energy Markets and Policy Group • Energy Analysis Department

More Detailed Results Expected In Final Report & Papers Due Out Fall 2008

We hope to investigate the following types of homes for unique effects

  • Homes in the top 25% of market value
  • Secondary (vacation) residences

And further refine our analysis

  • Control for spatial autocorrelation
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Energy Markets and Policy Group • Energy Analysis Department

Thank You

Ben Hoen & Ryan Wiser Lawrence Berkeley National Laboratory benhoen2@earthlink.net & rhwiser@lbl.gov