Executive Viewpoint
Investigation: Wind farms have no widespread negative impact on US property values
18 December 2009
WindEnergyUpdate catches up with Lawrence Berkeley National Laboratory scientist, Ryan Wiser, and independent consultant, Ben Hoen, to discuss the (somewhat surprising) findings of the latest research on how wind farms impact real estate prices in the United States.
By Rikki Stancich in Paris
The latest economic analysis of the impact of wind farms on local communities finds that wind farms have limited negative impact on property values.
While wind energy project developers will no doubt welcome the findings, the results do seem counter-intuitive.
WindEnergyUpdate probes the authors of the report to find out just how accurate the results are; whether the results are likely to reassure NIMBYs (not-in-my-backyard-ers); and how useful this new evidence is likely to be for future US wind project planning applications.
WindEnergyUpdate: Were the results of the study in any way surprising; or did they support an existing, proven hypothesis that wind turbines have no negative impact on property values?
Ben Hoen: It is somewhat surprising that no widespread impact for wind facilities is found.
One very plausible explanation, however, is simply that any impact that does exist only occurs for a small number of homes that are located at very close range to wind facilities, for instance inside 1000 feet, and those homes are so infrequent that analyzing them with our techniques is difficult.
Moreover, effects might fade over time, which would further shrink the usable dataset.
Ryan Wiser: The results are only somewhat surprising. Of course, one's intuition is that property values might be somewhat negatively affected as they are for transmission lines, cell phone towers and such.
WindEnergyUpdate: The study finds that there is very limited negative impact on house prices. To what extent does this report respond to NIMBYs' concerns over wind project developments?
Ben Hoen: Aesthetic concerns and property value impacts always rank high on the list of issues that local communities want addressed prior to the approval of a wind development.
This report should provide a solid and reliable starting point to discuss those concerns in local siting and permitting processes.
Of course, local decisions on wind projects are based on a variety of factors and, ultimately, county commissioners, siting boards, and other stakeholders must make considered judgments of the real and perceived benefits and costs of potential wind projects.
The work will hopefully inform those discussions as they relate to property values, which is, of course, one of many issues that must be addressed during the siting/permitting process.
WindEnergyUpdate: Was there any evidence that individuals purchasing properties near to wind farms were pro-renewable energy?
Ryan Wiser: This is not something that was addressed directly by the analysis. The analysis focuses on whether wind facilities impact sales prices, but any information on why these results are what they are involves a measure of speculation at this point.
We do know anecdotally that some home purchasers are quite fond of the nearby turbines (for instance some homeowners had names for them, were aware of repair schedules, and were glad to see them spinning), while others clearly consider the turbines a nuisance.
More work is needed to really understand the motivations and opinions of those selling and purchasing homes near wind facilities.
WindEnergyUpdate: Were any of the residential areas considered to be 'prime real estate'; or does a windy location suggest that property in these areas would not have had a high value anyway?
Ryan Wiser: Wind projects are often (but not always) sited in rather rural areas that are sparsely populated and that have low to moderate home values.
Wind facilities need to have certain setbacks from homes, for example, and therefore cannot be located in densely populated areas. Further, the windiest areas are often not locations that are terribly hospitable to human habitation, such as on ridge-tops or other promitories!
Finally, wind developers have to compete with other potential land uses: if the highest value use of a parcel of land is to convert it into a golf course with luxury homes, a wind developer is unlikely to win the rights to develop.
For all of these reasons, wind development often (but not always) occurs away from what one might consider prime real estate.
All of that said, however, there are some anecdotal counter examples: in Big Spring, Texas, for instance, some of the largest homes in the town have been erected after the facility was constructed in clear view of the turbines.
WindEnergyUpdate: How is a report like this likely to be used by wind developers?
Ben Hoen: Wind developers, of course, are likely to use the report to try to dismiss claims that property values will be impacted in a dramatic way by a proposed development.
After all, based on the extensive analysis contained in the report of sales prices surrounding 24 operating wind projects in the U.S., no widespread and consistent negative property value impacts were found, even when concentrating on homes located within 3000 feet of a turbine, or that sold in the two years following the facilities’ construction.
To be clear though, that does not mean that there has not and will never be individual homes or small groups of homes whose values have been or will be impacted negatively; however, it does mean that, if such homes exist, they are likely few and far between.
Of course, as with any research, there will be detractors, and the debate will continue. Nonetheless, our hope is that this work will give stakeholders and decision makers a useful reference with which to make their own judgments and decisions.
WindEnergyUpdate: The authors note that only a handful of studies have been carried out in this area - all of which have shortcomings. What methodology or strategy did you employ in order to ensure that your findings were more robust?
Ryan Wiser: First, and most important, this work investigated impacts using actual home sales transactions, which is very different from some of the previous literature that has used surveys of experts or homeowners to estimate impacts.
Secondly, these results are derived from a wide variety of statistical models that investigated a sizable dataset of residential transactions surrounding 24 different wind projects; previous work had often used rather small datasets surrounding single wind projects and/or simple analytical techniques that are unable to control for the many differences among homes (such as the number of bathrooms, square feet, or acres), which potentially biased those results.
Finally, each home in the sample was visited in the field, an effort most had previously not undertaken, allowing for the collection of important information such as the quality of scenic vista from the home and the degree to which the nearby wind facility was visible, and thereby improving the reliability of our results.
In sum, we are confident that what was produced is the most data rich, comprehensive, and robust analysis on this topic to date.
