Property Values? Evidence is that if wind farms do impact them, it’s positively.

Many people concerned with wind turbines have a specific fear: that the equity in their properties will be reduced or eliminated.  How real is this?  What is the actual impact of wind farms on nearby property values?

Ten major and statistically reliable studies covering roughly 1.3 million property transactions by different respected and independent organizations in three different countries spread over fifteen years have found no correlation between operating wind turbines and negative property values (in fact, three found slight but statistically insignificant impacts). Another low reliability study — due to small available sample size — in Australia found no impacts as well.

By comparison, only two moderately reliable studies with some statistical significance found property value impacts, and they are both challenged in different ways. Five other often referenced studies are merely case studies with no statistical significance, done by appraisers who show strong evidence of bias, and in one case showing direct and documented evidence of ignoring the reality of the property they appraise.

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The evidence for property value impacts is very weak in comparison to the evidence for lack of harm.  The studies showing lack of harm are much more robust methodologically and statistically, with much greater rigour which prevents biased selections and comparisons. Property value impacts continue to be assessed at great expense, but every robust study finds that there is no correlation between sales prices and nearby wind farms, and the most recent studies show that there is no impact on rate of sales of properties near wind farms either.

Respect the concern

Whether it is a home or a vacation property, the vast majority of people who buy or own rural property have a variety of deep emotional drivers attached to it. For some older people, it is the unchanging home they have been in for decades, in the midst of an often confusing and rapidly changing world.  For others, it is a rural idyll, the fantasy of a hobby farm or country estate.  For others, it is an escape from the vertical canyons, concrete, steel and noise of the city. For almost all of them, it represents a very large chunk of their money, with all of the attendant concerns that it might turn to dust as happened in the US with the subprime mortgage fiasco in 2008. It is worthwhile to respect the deep emotions involved in this subject. Anti-wind advocacy groups certainly do, and while some are directly motivated by fears of falling properties, many broader groups are using those fears to directly motivate grassroots organizations to form to fight wind turbines.

Property values show no long-term correlation to wind turbine presence

There have been several major reports released in 2013 and 2014 that substantially increase the strength of statistical evidence of no property value impacts from wind farms.

Most recently, the largest and longest duration study was released by the Center for Economics and Business Research (Cebr) in the UK. They were commissioned by RenewableUK, the industry body for wind and marine energy generation, which in many minds will reduce the merit of the study, however, it covers over one million property transactions in counties with wind farms over 18 years, making it the study with by far the largest statistical base and longest perspective. The methodology and statistics are sound. Their findings?

Our analysis of the raw house price data for transactions completed within the vicinity of the wind farms yielded no evidence that prices had been affected by either the announcement, construction or completion of the wind farms for six out of seven sites.

In fact, the analysis shows that on average, house prices near wind farm sites grew faster for the periods between the start of construction and mid-2013 (0.8% annual growth) than at the wider county-level (0.5% annual growth). One site did see a noticeable downturn following the announcement that a wind farm would be built; however once the turbines were erected, local house price growth returned to the county-wide norm.

As can be seen from a key graph, the average house prices within five kilometres of wind farms track the county averages very closely over the eighteen years. What’s also of relevance to the discussion is that house prices dropped in 2008 and have continued downward. Once again, the visibility of wind farms makes them lightning rods for concerns that are actually caused by other things.

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As a side note, Cebr excluded two wind farms from the statistical analysis because they had too few properties within five kilometres of them for statistical validity. This is interesting because the transactions near those wind farms — 470 and 2,384 respectively — are greater than the total transactions in virtually all of the studies finding harm to property values, casting those studies even more deeply into doubt.

The most substantive is the 2013 update of the 2009 Lawrence Berkeley National Laboratory study, described below in detail.[26] Pertinent points are extracted here:

We collected data from more than 50,000 home sales among 27 counties in nine states. These homes were within 10 miles of 67 different wind facilities, and 1,198 sales were within 1 mile of a turbine—many more than previous studies have collected. The data span the periods well before announcement of the wind facilities to well after their construction.

we find no statistical evidence that home values near turbines were affected in the post-construction or post-announcement/pre-construction periods.

Transactions assessed covered geographically varied sites across the USA

Transactions assessed covered geographically varied sites across the USA

This major study controlled for significantly more variables and concerns than previous studies and found no impact on property values from wind farms.

The LBNL also collaborated with the University of Connecticut on an assessment of property value impacts near wind farms in the US state of Massachusetts in 2013, publishing their results in January 2014.[24] They spread the net even wider:

To determine if wind turbines have a negative impact on property values in urban settings, this report analyzed more than 122,000 home sales, between 1998 and 2012, that occurred near the current or future location of 41 turbines in densely- populated Massachusetts communities.

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The results of this study do not support the claim that wind turbines affect nearby home prices. Although the study found the effects from a variety of negative features (such as electricity transmission lines and major roads) and positive features (such as open space and beaches) generally accorded with previous studies, the study found no net effects due to the arrival of turbines in the sample’s communities. Weak evidence suggests that the announcement of the wind facilities had a modest adverse impact on home prices, but those effects were no longer apparent after turbine construction and eventual operation commenced. The analysis also showed no unique impact on the rate of home sales near wind turbines.

Recently, in January of 2014, a Canadian study assessing impacts of the Melancthon wind farms — at one point the largest in Canada — on home and farmland property values over another 7,004 property transactions.[32] The conclusions:

The results of the hedonic models, which are robust to a number of alternate model specifications including a repeat sales analysis, suggest that these wind turbines have not significantly impacted nearby property values. Thus, these results do not corroborate the concerns raised by residents regarding potential negative impacts of turbines on property values.

Also in 2013, the University of Rhode Island performed an assessment specifically of property transactions in that US state.[25] They covered 48,554 property transactions over thirteen years, both near and far from the twelve large and mid-sized wind turbines constructed in ten sites between 2006 and 2013.

Across a wide variety of specifications, the results indicate that wind turbines have no statistically significant impact on house prices. For houses within a half mile of a turbine, the point estimate of price change for properties within 1⁄2 mile relative to properties 3-5 miles away 3 is -0.2%. So our best estimate is wind towers have no virtually effect on prices of nearby properties.

The best study in this field prior to 2013 was funded by the US Office of Energy Efficiency and Renewable Energy. They charged the Ernest Orlando Lawrence Berkeley National Laboratory[7], a government-funded laboratory managed by the University of California to study the concern.  This report was delivered in 2009. [2]

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To ensure that the seriousness of this organization and its devotion to academic excellence and scientific truth is understood, thirteen Nobel Prize winners have been associated with the Lab and thirteen have been awarded the US National Medal of Science, the top US honor for lifetime achievements in science. Dozens more have received other extraordinary levels of recognition.  This is an organization that is not for sale. This is an organization that takes its independence and excellence seriously.
Here’s what they found:

The present research collected data on almost 7,500 sales of single- family homes situated within 10 miles of 24 existing wind facilities in nine different U.S. states. The conclusions of the study are drawn from eight different hedonic pricing models, as well as both repeat sales and sales volume models. The various analyses are strongly consistent in that none of the models uncovers conclusive evidence of the existence of any widespread property value impacts that might be present in communities surrounding wind energy facilities.

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It is worth noting and debunking the arguments used against the study:

  • It doesn’t agree with what is obviously happening around the person observing; statistics have never had much success in convincing someone who believes something and receives sufficient evidence to support their confirmation bias.
  • The Lab is government-funded; the bona fides and independence of the LBNL are top-notch and questioning them indicates the rhetorical or intellectual disposition of the questioner.
  • The study excluded 34 statistical outliers; statistical studies of any size do this to eliminate unrepresentative data and 34 exclusions on a sample size of 7,500 is miniscule. This study is accurate and has not been gamed.

The next study is the 2007 study by the Royal Institute of Chartered Surveyors (RICS) [10] in conjunction with Oxfords Brookes University [11], [12].

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These are serious, respectable and trusted institutes as well; RICS traces its history to chartering in 1792 and is a pre-eminent standards setting body world-wide. The researchers assessed property transactions within five miles (8 kilometers) of three wind farms from 2000 to 2007. This provides geographical, distance and time-frame perspectives.  They eliminated transactions where significant other factors would impact prices:  a large open cast slate mine, very expensive properties, very cheap properties and sea view properties. This was to provide a clear view of specifically wind turbines’ impact on property values. This left them with 919 transactions, which is statistically valid.[5]

Their findings:

Despite initial evidence that there was an effect, when they investigated more closely, there were generally other factors which were more significant than the presence of a wind farm. Insofar as there was any impact on prices, the results seem to show that it is most noticeable for terraced and semi-detached houses, with there being a significant impact on properties located within a mile of a wind farm. The effect seems much less marked – if at all – for detached houses.

Regarding the terraced and semi-detached houses:

The view of the estate agents was that proximity to a wind farm simply was not an issue. What they did say, though, was that the properties close to one of the wind farms – St Eval – were, in fact, ex-Ministry of Defence properties, and so less desirable than similar properties.

To paraphrase, while people blamed wind turbines for property value decreases, other factors were much more significant, and detached homes, the dominant form of real estate near wind farms showed no price impacts.

Unfortunately, RICS has removed this survey from their available publications on their website and appear to not be standing by the results of their research.

The third major study worth assessing is the Renewable Energy Policy Project’s (REPP) 2003 study.

While the oldest, it also assessed the largest pool of data, more than 25,000 property transactions in the USA.  They looked at every home within 5 miles (8 kilometers) of ten large (>10 MW) wind developments that came online between 1998 and 2001.  They gathered sales data for the control regions near the wind turbines but outside of the 5 mile (8 kilometer) boundary to ensure that they could assess differences accurately.  They gathered six years worth of data covering the years leading up to and following the wind farms’ online dates. [22]

It is worth noting that while this is by far the largest study with the least statistical adjustment of data, the creator of the study, REPP, is an organization whose public and stated goal is to accelerate the use of renewable energy. [13] As such, while the study design is arguably very good and sample size the largest, it is the easiest to discount due to the source.

What did they find:

  • For 8 of the 10 of the wind projects, property values increased faster inside the five mile limit than outside of it over the six years.
  • For 9 of the 10 wind projects, property values increased faster within the five mile limit after the wind projects came online than they had before.
  • For 9 of the 10 wind projects, property values increased faster within the five mile limit after the wind projects came online than in the comparable communities.
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Not only did this massive study not find negative impacts on real estate values, it found exactly the opposite: wind turbines have a positive impact on real estate values.

A fourth study is also worthy of inclusion: “Wind Farm Proximity And Property Values: A Pooled Hedonic Regression Analysis Of Property Values In Central Illinois” by Jennifer L. Hinman in partial fulfilment of a Master in Applied Economics with Illinois State University in 2010. Her study evaluated 3,851 residential property transactions from January 1, 2001 through December 1, 2009 from McLean and Ford Counties, Illinois around the 240-turbine, Twin Groves wind farm (Phases I and II) in eastern McLean County, Illinois.

Ms. Hinman’s study found no correlation between a working wind farm and decreased property values, in fact saw more rapid price increases nearer to the wind farm as was observed in the REPP report.  Her study most clearly shows that there is a statistical correlation between fears about a wind farm before it is erected, temporarily depressing property values, and that this temporary dip is rapidly eliminated once the wind farm is in operation.[18]

Ms. Hinman also did a literature review and found the same results: all major statistically valid studies find no negative correlation, but very small studies at or just above the level of the anecdotal do find negative impacts.

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A New Hampshire, USA study published in December 2012 assessed another 4,600 property transactions and found:

While this study does not exclude the possibility of isolated cases of property value impacts attributable to the Lempster Wind Power Project, this study has found no evidence that the Project has had a consistent, statistically‐significant impact on property values within the Lempster region. This is consistent with the near unanimous findings of other studies—based their analysis on arms‐length property sales transactions—that have found no conclusive evidence of wide spread, statistically significant changes in property values resulting from wind power projects.[23]

Two correlation graphs from this study paint a clear picture.

Note that distances are in kilometres.

Basically, there’s no variance on home prices due to distance from wind turbines, and a huge correlation to size of dwellings.

A preliminary Australian study indicates that this is also true south of the equator. While the sample size of sales transactions is low, they found that 40 of 45 sales transactions had no evident reduction in value in close proximity to wind farms and that properties that were in sight of wind farms found no reduction in value. [17]

They also did a literature survey and summarized additional references with similarly devastating results for studies showing negative impacts:

What is the evidence that shows negative impacts?

There is one statistically valid, methodologically sound, peer-reviewed study which contradicts the preponderance of evidence above. Martin Heintzelman and Carrie Tuttle did a study of 11,331 property transactions over 9 years in three counties in Northern New York, 461 of which were within three miles of wind turbines.[19] They found that two of the three counties had significant property value decreases while the third had positive indicators. For context, this study is relatively equivalent in terms of organizational respect and depth to Ms. Hinman’s study from Illinois State University; credible but not from a world-class organization such as the Berkeley Lab or RICS.

A significant failing of the study that makes it difficult to trust compared to other studies is the short time frame of the data for the two counties with negative impacts.  Their wind farms became operational in 2008 and 2009, basically in the last year of the data set.  The county with positive impacts went live in 2006, in the middle of the data set, providing a much richer analysis space. There are several other significant differences between the two counties that showed negative results and the county with positive results as well.

  • The two counties with negative impacts (Franklin and Clinton) had significantly fewer transactions  — 210 between them — than the county with some positive impacts (Lewis) which had 251 transactions.
  • The two counties with negative impacts had significantly higher resales of properties than the county with positive impacts, 75 to 65.
  • The two counties with negative impacts are adjoining to one another with the third county two hours drive away, effectively in another community conversation region and making it possible for other local impacts to be masked; three completely separate or three completely co-located regions would have eliminated this oddity.
  • The two counties with negative impacts had fewer wind turbines on average than the county with positive impacts (221 between them to 194 in Lewis).

This region also has a robust set of anti-wind activist groups.  The 2011 anti-wind documentary, Windfall [20], is from upstate New York, and Lisa Linowes, a long term anti-wind advocate with ties to astroturf-supporters such as the Heartland Institute and the Koch brothers [21] was the sole technical advisor to the movie and has been active in the area.

Despite the largest county with the longest history of wind energy and the most transactions having positive indicators for property values, the authors focused their conclusions dominantly on the negative counties.  The authors state in their preamble that they did not believe it possible that wind turbines didn’t negatively affect property values.  They found the results they expected, ignoring the significant oddities in their results. This study can only be considered of moderate reliability due to the challenges with it.

A German study is worth assessing briefly. It cover 1,405 transactions near a wind farm of nine wind turbines in Germany. It found lower property values near wind farms, regardless of whether the wind turbines could be seen or not. It is weak as it does not have control values from other areas, does not assess other potential causes of hedonic impact and has a limited transaction base. At best it is an interesting outlier from the preponderance of evidence of only moderate reliability.[27]

There are four anecdotal sets of property value appraisals by property value appraisers in Canada and the USA that are often mentioned. They use variously case studies, paired sales analysis and an apparently invented statistical method in one case. They cover a few dozen property transaction with little in the way of methodological rigour or control. They all show strong evidence of pre-existing bias in their statements. Given the tiny sample sizes and poor methodological rigour, they cannot be considered reliable as evidence.[28-30]

One Australian study by a property appraiser, Peter Reardon, follows in the footsteps of weak anecdotal assessments in Canada and the USA, looking at three sales near wind farms and pairing them with properties elsewhere. It has the typical weaknesses of poor methodology and rigour, but a statement from a purchaser of one of the two properties which apparently suffered property value impacts came into my hands via a correspondent. It’s worth looking at what they say about the property that they purchased. Netting it out, it was grossly overpriced for reasons having nothing to do with the nearby wind farm, and everything to do with the property itself.

As you know the property had been on the market since September 2010 at no time did we see it advertised at $320,000

We spoke to the agent when it was priced at $299,000 which we thought was grossly over valued even for a lifestyle block let alone a grazing block, having as you stated not only one but two 330KV lines transversing the block along with the associated easement restrictions (some 50 double sided pages of conditions and and terms), it is divided by the duel carriage Hume Higway and two truck parking bays (north& south), with the associated noise and litter problems, it has no 240V power access on the block (and we know what that costs). That’s the lifestyle detractions of the block.

Now Grazing- the block has over 30% water logging and drainage problems, covering both sides of the highway-in fact many times we saw the agents vehicle parked on the edge of the road- presumably inspections by “foot” The block had poor boundary fencing on the southern side, the carrying capacity of the block is app. 2.5 DSE per Ha.

We therefore came to the value of $205,000 (2500 per Ha.) This was allowing some $8000 for “proximity” to the Highway- having purchased her brother’s property some 12 months before at app. $2400Ha.(carrying capacity of6 DSE per Ha.) (no agent involved in this transaction! )

We had to increase this offer by some $20,000 to secure this deal. I think Real Estate Agents are no different in the country to their city cousins- raising unrealistic expectations of the value of property especially in a difficult market. It would seem that people want sub-division prices for undeveloped land, not allowing for development and approval costs

Having also sold the mentioned 80Ha block on the Collector Rd we know the demands of financing lifestyle blocks in recent years. This block does have 240V power available as per Council Sub-division regulation.

Summary

The examples listed in the question and others [1], [4] represent real people telling the truth as they see it, which is to say, from a limited perspective in both space and time.  What they are observing is accurate but restricted.

  • Some people do not buy homes when they understand that wind turbines might be going up near by
  • Some people do sell or try to sell their homes when they hear that wind turbines are going up
  • Property prices do dip under those conditions:  this is a real occurrence, supported by the Illinois statistical study.

What are the fears that are driving this?

  • Fear of health is one, with the psychogenic Wind Turbine Syndrome and it’s equally fictitious cousin Vibro-Acoustic Disease.  Note that these are not real diseases, but they are promoted by both the originators of the concept and by anti-wind advocacy groups as being real, and they are creating a health hysteria in English-language countries around wind energy.[8], [9], [13]
  • Fear of property value decreases, which this article is assessing.
  • Fear of wind turbines collapsing, throwing blade parts or causing fires.  These are so massively unlikely that no rational analysis would include them, but they are highly evocative. [15]

These are real fears of unreal things. They are strongly promoted by anti-wind advocacy groups. It is strongly arguable that anti-wind advocates drive down property prices in the run up to wind farms becoming operational just as they are creating the psychogenic health hysteria, “Wind Turbine Syndrome.:”

References:

[1] http://friendsofwind.ca/wp-content/uploads/2011/07/USA-2010-Hinman-Wind-Farm-Proximity-and-Property-Values.pdf
[2] The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis
[4] http://www.windturbinesyndrome.com/2012/wind-turbines-constitute-a-taking-of-private-property-value-mass/
[5] http://www.st-andrews.ac.uk/media/estates/kenly-farm/images/RICS%20Property%20report.pdf
[6] http://www.wind-watch.org/documents/do-wind-turbines-affect-property-values/
[7] http://www.lbl.gov/
[8] “Wind turbine syndrome” is more wind than syndrome
[9] Wind farms don’t make people sick, so why the complaints?
[10] http://www.rics.org/
[11] http://www.brookes.ac.uk/
[12] http://en.wikipedia.org/wiki/Oxford_Brookes_University
[13] http://www.repp.org/aboutus.html
[14] Humans evolved with infrasound; is there any truth to health concerns about it?
[15] Wind farms causing fires? All smoke, no flame
[16] http://tobacco.health.usyd.edu.au/assets/pdfs/publications/WindfarmDiseases.docx
[17] Preliminary assessment of the impact of wind farms on surrounding land values in Australia / prepared for NSW Valuer General [by Robert R Dupont and Joshua Etherington], 2009, English, Archived website edition: http://trove.nla.gov.au/work/37246622?q&versionId=48424067

[18] http://friendsofwind.ca/wp-content/uploads/2011/07/USA-2010-Hinman-Wind-Farm-Proximity-and-Property-Values.pdf

[19] http://clarkson.academia.edu/MartinHeintzelman/Papers/1155349/Values_in_the_Wind_A_Hedonic_Analysis_of_Wind_Power_Facilities
[20] http://www.imdb.com/title/tt1581829/
[21] http://checksandbalancesproject.org/2011/08/12/lisa-linowes-and-the-disinformation-of-industrial-wind-action-group/
[22] http://www.repp.org/articles/static/1/binaries/wind_online_final.pdf
[23] Impact􀀃of􀀃the􀀃Lempster􀀃Wind􀀃Power􀀃Project􀀃on􀀃Local􀀃Residential􀀃Property􀀃Values,, Matthew􀀃Magnusson,􀀃MBA􀀃 Ross􀀃Gittell,􀀃James􀀃R􀀃Carter􀀃Professor, Whittemore􀀃School􀀃of􀀃Business􀀃&􀀃Economics, University􀀃of􀀃New􀀃Hampshire, January􀀃2012, http://seneca-wind.com/files/2012/05/14B_lempster_property_value_impacts_final-copy-copy.pdf

[24] Relationship between Wind Turbines and Residential Property Values in Massachusetts, Carol Atkinson-Palombo, Ben Hoen, A Joint Report of University of Connecticut and Lawrence Berkeley National Laboratory January 9, 2014, http://images.masscec.com/uploads/attachments/2014/01/Relationship%20between%20Wind%20Turbines%20and%20Residential%20Property%20Values%20in%20Massachusetts.pdf

[25] Effects of Wind Turbines on Property Values in Rhode Island, Corey Lang and James Opaluch, Environmental and Natural, Resource Economics, University of Rhode Island Final Report, October 18, 2013, Downloadable PDF: Final Property Values Report_Rhode Island

[26] A Spatial Hedonic Analysis of the Effects of Wind Energy Facilities on Surrounding Property Values in the United States, Ben Hoen, Jason P. Brown, Thomas Jackson, Ryan Wiser, Mark Thayer and Peter Cappers, Lawrence Berkeley National Laboratory, Environmental Energy Technologies Division, August 2013, http://emp.lbl.gov/sites/all/files/lbnl-6362e.pdf

[27] The Impact of Wind Farms on Property Values: A Geographically Weighted Hedonic Pricing Model, Yasin Sunak and Reinhard Madlener, FCN Institute for Future Energy, E.ON Energy Research Center, 2013, http://www.eonerc.rwth-aachen.de/global/show_document.asp?id=aaaaaaaaaacplpi

[28] McCann analysis http://nevadajournal.com/assets/uploads/2013/03/tipton-county-bza-mccann-appraisal-presentation.pdf

[29] Gardner analysis https://www.edockets.state.mn.us/EFiling/edockets/searchDocuments.do?method=showPoup&documentId=%7B17C4DC1B-F496-45AF-B731-7533FF5B0187%7D&documentTitle=200912-44662-06

[30] Lansink analysis http://www.lansinkappraisals.com/downloads/CaseStudy_DiminutionInValue_InjuriousAffection_WindTurbines.pdf

[31] Reardon analysis http://m.powerofwind.com/blog/post/whipping-up-fear-about-wind-farms-the-property-value-stigma

[32] The Effects of Wind Turbines on Property Values in Ontario: Does Public Perception Match Empirical Evidence?, Vyn, R. J. and McCullough, R. M. (2014), Canadian Journal of Agricultural Economics/Revue canadienne d’agroeconomie. doi: 10.1111/cjag.12030, http://onlinelibrary.wiley.com/doi/10.1111/cjag.12030/full

12 comments

  1. A wonderful contributions. Well done!

  2. Dear Mr. Barnard,

    Since I live in an area that has been targeted by industrial wind developers, and have many friends whose homes within the massive, sprawling footprints of these industrial wind factories are ‘For Sale’, but not selling – I would like to pose a question to Mr. Hoen:

    Would you buy and move your family into a home within the sprawling footprint of an industrial wind factory with its’ 450-foot-tall industrial towers and their 7-ton blades spinning overhead – only 100s of feet from the foundations of your home?

    This is not the first time I have posed this question to Mr. Hoen, and have yet to receive an answer.

    I attended a meeting in Genesee County, NY several years ago at which Ben Hoen was trying to convince citizens and members of a Town Board here in Western New York of these very same claims – that their property values would NOT be negatively effected by agreeing to turn their entire Town into a sprawling industrial wind factory.

    So, I held up a picture of a number of homes which are now surrounded by industrial wind turbines and asked Mr. Hoen if he would buy, and move HIS FAMILY into one of these homes. Mr. Hoen refused to answer the question, and instead tried to suggest that the photo must have been altered — which it wasn’t.

    Another thing Mr. Hoen forgot to tell people was that they did NOT include the homes that did NOT SELL within two miles of the wind projects in the data of their first study.

    Because we already have 250 industrial wind turbines here in Wyoming County of Western New York State, with another 58 going up this summer throughout another entire Town, I can testify to the fact that many of my friends have had their homes FOR SALE for a long time with no results.

    One guy I know is renting a place elsewhere while he still pays a mortgage on his damaged home that he can NOT sleep in any more due to the infrasound that keeps him awake at night. One guy had the sound measured within his home to be above 70 dbA. Others continue to seek help via the court system to no avail, as they just don’t have enough money to fight Big Corporate’s bottomless pockets.

    One woman I know who did manage to sell her property — because she had enough land that one of the big farmers was interested in the tillable acreage — took over $100,000 less than what she had listed it for. Most people do not have enough land to interest a farmer in buying their place. Most peoples’ most expensive life investment is their homes, and they can NOT afford to take that kind of a loss.

    These peoples’ homes haven’t just been reduced in value — These peoples’ homes have been rendered virtually worthless!

    There is plenty of evidence available on property value losses being experienced where industrial wind turbines are inappropriately being sited too close to peoples’ homes.

    See the recent article:
    “PROPERTY VALUE LOSSES NEAR WIND TURBINES GREATER THAN PREVIOUSLY THOUGHT, APPRAISERS SAY,” at: http://eastcountymagazine.org/node/9182

    And the report that property value losses average 25% – 40%+ by Real Estate Appraiser, Mike McCann at:

    http://nevadajournal.com/assets/uploads/2013/03/tipton-county-bza-mccann-appraisal-presentation.pdf

    Basis for the studies conclusions:

    1.) Independent studies consistently find significant value diminution

    2.) Appraisal studies are superior – Focus on paired sale data, resale studies, “nearby” data

    3.) Wind Industry commissioned studies use only regression analysis

    4.) Data “pooling” assures no statistical significance of any value loss examples

    5.) Non-appraisers (like Hoen) do not comply with USPAP, on several levels

    6.)Industry favored LBNL study found to not be reliable for any public policy purposes

    7.) Clarkson & Sunak studies use regression, but do not pool data

    8.) Value loss conclusions are statistically significant

    9.) Clarkson useful for distances as near as 1/10 mile

    10.) McCann and other studies collectively support conclusion that proximity impacts values -
    (25%) to (40%)

    11.) Nearest homes subject to value loss +/- (40%)

    12.) Loss of aerial spraying option and other issues impair full rights of farm ownership (non-participating)

    1. Thank you for your comments, Ms. Barton.

      I am mildly amused that the citation from East County Magazine is actually by far the most balanced reporting I’ve seen from that online journal. The editor is very strongly opposed to wind farms in her area, and material published on ECM is usually much less balanced.

      The article references Mr. McCann’s appraisal report, which you also include reference to. Thank you for that.

      Mr. McCann’s report is of much lower evidentiary value than the six peer reviewed studies covering almost 100,000 property transactions showing no impacts. It is not peer reviewed. It is not a governmental organization’s published report. It is one person’s professional opinion.

      While Mr. McCann claims not to be biased against wind energy or an anti-wind activist, the shopping list of wind energy disinformation on slide 11 of his presentation belies this. Without context, he claims ice throw — non-existent issue at the setbacks –, noise and low-frequency noise — very reasonably managed by the setbacks stated –, shadow flicker — a few minutes a day for a few days a year at homes at most –, health impacts — rejected by 19 world wide studies –, adverse impacts at greater than 2 miles — extraordinary and without basis — and aerial spraying — which doesn’t occur at wind speeds where wind turbines are operational — as issues of concern. This grab bag of anti-wind rhetoric is not indicative of a balanced point of view, but quite the opposite. It is possible when speaking to this slide that he specifically states that these are the anti-wind talking points which cause blips on transactions prior to wind farms becoming operational — which is what the most recent serious studies show –, but it seems unlikely given the rest of his presentation.

      Mr. McCann picks 53 property transactions in one case and a subset of these transactions in the paired analysis to attempt to counter the peer-reviewed, hedonics methodology — much more robust and used by every major study –, major respected institutions — LBNL with 13 Nobelists and >50 Presidential Fellows, RICS with 100s of years of existence, universities with excellent reputations — studies that show completely the opposite. He claims the Ontario data with exactly the same problems are also evidence.

      He asks us, based on less than 100 transactions in non-peer reviewed presentations by two real estate people, to ignore the serious qualifications, reliability and sheer weight of evidence of six studies in two countries over 15 years.

      The claimed issues with the major studies are illusory. <50 transactions removed as outliers on a sample of 100,000 is nothing.

      My apologies, but your effectively anecdotal arguments do not bear weight compared to the mass of evidence to the contrary presented in very large, peer-reviewed studies by highly reputable organizations.

  3. Dear Mr. Barnard,

    I am “mildly amused” that you consider eye-witness accounts of what is actually going on in rural/residential areas where these sprawling industrial wind factories are being installed to be “anecdotal arguments.”

    [intervening material removed by site moderator as it did not meed Moderation Policy]

    Wishing you and your family the best of health,

    Mary Kay Barton

    1. Mary Kay,

      By definition, eye witness accounts are anecdotal and of significantly lower evidentiary value than statistical analysis. And of course the question of what ‘eye witness’ means in regard to property values is interesting as well.

      Cheers,
      Mike
      (Please review the Moderation Policy again)

  4. Ralph Erskine · · Reply

    You suggest that the 2007 study by the Royal Institute of Chartered Surveyors (RICS) in conjunction with Oxford Brookes University involved ‘three wind farms’. Not quite: the study involved only two wind farms: St Bereock, and Bear’s Down, St Eval. A third, Delabole, was quickly discarded, since it was home to a huge open cast slate mine, which would have skewed the results.

    Note that the study warned that its ‘findings require a degree of caution’ because of the limited data available.

    In May 2012, the RICS therefore wrote to the UK Secretary of State for Energy & Climate Change (see
    http://www.windfarmvictims.org.uk/RICS%20Letter%20to%20SoS%20for%20Energy.pdf and
    http://www.windfarmvictims.org.uk/Tim%20Wainwright%20RICS%20reply.pdf), pointing out that the 2007 study was based on research in a specific geographical area at a particular point in time, that it was not representative of the wider residential property market and that ‘caution should be exercised when applying the 2007 research to the current market’.

    It is easy to see why the RICS is now so cautious about its 2007 study. The St Bereock farm comprised 11 Bonus B37/450 turbines, with a plate rating of only 450 kW. The Bonus B37/450 model used has a hub height of 35m with a blade diameter 37m (height to tip, 53.5m) (see http://www.thewindpower.net/windfarm_en_1399_st-breock.php).The Bear’s Down, St Eval farm had 16 turbines, with a total plate rating of 9.6 MW (say 600 kW each). Many of the turbines currently being installed on wind farms have a plate rating at least five times that amount, and a tip height of at least 125m. To suggest that a study involving relatively small turbines, with low power outputs, can validly be used to assess the effect on house prices of huge modern turbines is very misleading. The RICS certainly does not want to use it in 2013, hence its removal from its website.

    In short, the RICS is now only of historical interest, and should not be used to support claims about the effect of wind farms on the current housing market.

    Apparently the UK Department for Food, Environment and Rural Affairs (Defra) has recently commissioned a consultancy, Frontier Economics, to determine, in particular, ‘whether [energy projects, including wind turbines] have a significant impact on the prices of houses nearby’
    http://www.endsreport.com/40447/defra-investigates-effect-of-wind-and-shale-gas-on-house-prices

    The contract for the study started on 26 July. The report is said to have been due by 4 September (a very short period indeed for an important subject), but appears not to have been published yet. It may be included in a longer term government study into the “impacts of electricity infrastructure on rural areas”.

    There is irrefutable evidence that wind farms can devalue house prices. A scheme exists in Denmark to compensate owners where a property loses more than 1 per cent in value due to the erection of new wind turbines (http://www.ens.dk/node/2021). By November 2012, 551 compensation payments had been made to people living next to wind turbines: the average amount was 57,000 kroner per household (about GBP 6,125 at 12 November 2012). These are low amounts, but the scheme is in its early days.

    The compensation scheme is set out in an Act of the Danish Parliament, see an English translation at-
    http://www.ens.dk/sites/ens.dk/files/supply/renewable-energy/wind-power/onshore-wind-power/Promotion%20of%20Renewable%20Energy%20Act%20-%20extract.pdf

    1. Thanks for the very useful context for the RICS study.

      I disagree that local political efforts to defuse some negativity equal irrefutable evidence.

      The other five studies, I note, covering tens of thousands of property transactions are not addressed by your comment. Care to take a run at them as well?

      1. Ralph Erskine · ·

        In Denmark, the valuations are carried out by a tribunal consisting of a chairman who ‘satisfies the conditions to be appointed a judge’ and an expert in real property values: section 7(2) of the Promotion of Renewable Energy Act 2008. They are completely independent and not subject to political influence, so why do you describe their determinations as ‘local political efforts’?

        The tribunals have decided that a wind turbine has depreciated the value of a neighbouring house in over 550 cases. Most people would regard that number of decisions by such an impartial body as at least strong evidence that wind turbines can damage house values.

        I regret that commenting on the other five studies which you cite (ie excluding that by RICS) is probably above my pay grade.

        I note that Yasin Sunak and Reinhard Madlener, ‘The Impact of Wind Farms on Property Values: A Geographically Weighted Hedonic Pricing Model’. 2012 (revd. March 2013). (athttp://www.eonerc.rwth-aachen.de/global/show_document.asp?id=aaaaaaaaaacplpi)

        found that in North Rhine-Westphalia, Germany, the inverse distance of a bare land plot (without a house on it) to the nearest wind turbine caused ‘significant negative impacts on the surrounding property values’.

        Your comments on that study would be welcome.

    2. Hi Ralph . . .

      I appear to have run into a limit in WordPress comments about how deep a comment thread can extend. As such, I’m responding to your sub-comment related to the Danish legislation and payouts here.

      I’ll address the 2012 study separately, but wanted to address the property valuations point immediately.

      First of all, this is very much a political choice. The statistical evidence shows no discernible impacts, yet this is a relative constant concern around the world understandably. The Danish government chose to address this via a mechanism to address those who complained. That’s a tactical choice, and a reasonable one, but at heart political.

      Second, property valuations are tax accounting and are not market prices. They are much more subject to error than actual sales price data, consisting as they do of simple models and rules-of-thumb. There are property value adjustment mechanisms in most areas of the world, and there is constant work for those bureaucracies dealing with people who believe that their properties are over-valued, and no work at all from people who believe that their properties are undervalued. The major hedonic regression analysis studies I cite are based on pure market transaction data, and are statistically not subject to gaming due to the sample sizes.

      Third, structured as they are, they are dealing with a series of cases presented by people who wish to make money. The claimants will use every mechanism possible to make their property seem desirable and the impacts horrific in order to gain the economic benefit. The assessors will constantly be dealing with skewed evidence. This was undoubtedly understood at the time when the legislation was formed, and considered a reasonable cost of doing business.

      As an example of one similar case from Australia I happen to have details on, a person claimed that their property had lost significant value due to a nearby wind farm. They claimed it had been valued at $330,000 AUD and had lost 33% of its value in final sale. However, it had no home, was bordered by a major road with no access roads, was crossed by power lines, had poor drainage, was only marginally arable and was littered with garbage. The purchaser rightly looked at those conditions and made what they felt was a realistic offer in the $200,000 AUD range.

      In behavioural economics, there is something known as the Ikea Effect (which I’ve been subject to in my property buying and selling, so I’ve personally felt its sting). The effect is simply explained: people who have done any improvements to a property tend to vastly over-rate the economic value of those improvements to others. People believe that their properties are worth a lot more than the market shows that they are. http://www.people.hbs.edu/mnorton/norton%20mochon%20ariely.pdf

      All of this is to say that the people who are using the Danish model for compensation are those who believed that their properties were worth more than they really were due to other factors, they are getting revenue from the wind farm through an alternative mechanism and it’s likely worth it to increase social license for wind energy.

      This is not evidence of real property value changes, but something more sophisticated.

      Thanks for bringing it to my attention. Something else to admire about the Danish experience.

    3. Hi Ralph . . .

      Regarding the German study, I note a few things. I apologize for the length, but ask that you read the entire set of comments and understand that I have applied the same degree of scrutiny to each of the studies pro- and con- that I assess in the main post.

      1. A concern is the sample size of 1,405 property sales over 18 years. This is a relatively trivial sample compared to the almost 100,000 property transactions now covered by studies — many of which are cited by the German paper — which find the opposite. This does not invalidate the findings, but positions their evidentiary strength.

      2. The second is the exclusion of home sales prices, the primary concern expressed by those worried about the impact of wind farms on property values. The German study clearly states that they do not capture home prices due to availability of data and privacy concerns, and that this is different from other studies. Studies that have been performed on property values find that any effects of wind farms are submerged within other factors such as infrastructure on the property, proximity to beaches and other locational value propositions. They accommodate for many of these variables, but the lack of home sales data limits the reliability of their results.

      3. They also agree that all property transactions assessed are very close to the wind farm site compared to other hedonics studies which assess control group transactions for similar areas far from any wind farm site to ensure that regression was accurate. This is very important as it controls for larger trends impacting similar areas, such as flight to cities from rural areas, global economic trends, etc. The lack of any transactions further than 5.5 km from the wind farm weakens the reliability of their results considerably.

      4. I’m concerned about this statement they made: “Besides the inverse distance measure from each property to the wind farm, we also tried to identify local distance effects within five kilometers around the wind farm, using dummy variables containing properties in 0.5 km steps.” This creation of dummy data was not a feature of other studies, and it’s not clear how the authors used this or leveraged it in their final results. Their most significant statement of finding was, they state, based on the dummy data, not on real data: “Further, investigating the distance to the wind farm site through a set of dummy variables, negative wind farm impacts are mostly detectable in the close vicinity within the first 1.5 km around the site. Hence, within the first kilometer around the wind farm, prices decreased by 21.5% to 29.7% according to the estimations.” This was an interesting modelling exercise, but has to be considered hypothetical at best; it should be ignored.

      5. The study avoids a trap that the Heintzelman and Tuttle study fell into, specifically that their sample transactions cover a significant period of time before and after construction of the wind farm. Compared to the first four points, this increases the reliability of the study.

      6. Avoiding the dummy data problem, we find this pure transactional sales regression analysis result: “Thus, properties that were sold after the construction of the wind farm showed price decreases between 10.8% and 11.9%.” This is the clearest statement of negative impact that they make, but it’s strongly weakened in terms of reliability due to Points 1, 2 and 3.

      To sum up, I find this to be an interesting outlier study but not compelling compared to the weight of evidence from other studies. If you find the RICS study to be weak, this is equally challenged although in different ways.

      1. Ralph Erskine · ·

        Thanks for the above analysis.

  5. Len · · Reply

    I actually took the time to review a couple of the studies cited. They are not flawed in deriving conclusions based upon the samplings. It is simply bad science in the sense that by inclusion and exclusion stated within the scope the studies it legitimatizes the results that the “scientist” want. They are really making an argument. So, indeed given the stated scope of the studies, they may include e.g., all turbines in a state, not just large farms but also small single turbines, then they open the geographic area to size which includes properties miles away from turbines and then can succeed in statistically burying the fact that homes in close proximity to large turbines do in fact depreciate. It is a kind of trickery as the number of residences directly impacted by large farms are few. Here in Vermont it is a matter of using common sense. Many folks live in rural areas close to ridge lines because of the natural environment, views and the bucolic life style it affords, only a fool would think that giant wind turbines does not detract from that experience and leads to a depreciate in value of properties in proximity. The real proof of this will become clear over time and towns have already in Vermont reduced property values accordingly.

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