Wind farm “monsters bad for Ontario: Realtors shoot back at property value study

Looks like a great place to live!!
Looks like a great place to live!!

Jennifer Paterson, Canadian Real Estate Wealth, December 18, 2014

A recent study by the University of Guelph, which found wind turbines do not have an impact on nearby property values, might have earned a big sigh of relief from investors – but the study’s results have been strongly criticized by members of the real estate industry.

“I have had several deals fall apart in this area because, in the appraisal report, it has been mentioned that there are windmills visible or adjacent to the property and, once a lender gets wind of that (forgive the pun), they will not fund a mortgage,” said Angela Jenkins, a mortgage agent at Dominion Lending Centres, who lives and works in the Melancthon region, where the study was conducted.

“If a person cannot get financing due to windmills, then how can this be a positive thing?”

The study, which was published this month in the Canadian Journal of Agricultural Economics, analyzed more than 7,000 home and farm sales in the area, and found that at least 1,000 of these were sold more than once, some several times.*

John Leonard Goodwin, who has been a real estate broker for more than 10 years in the Grand Bend, Ont. market, asserted that wind turbines absolutely do affect property values. “Turbines complicate your property enjoyment, period,” he said. “That alone spells depreciated value(s).

“Turbines should be in remote, unpopulated locations. To all the folks who have turbines on their property: Enjoy your $18,000 per turbine per year, because you will be giving most of the lease payments back (in much lower property value) when you sell.

“These monsters are very bad for Ontario,” he continued. “We all pay to subsidize the electricity they produce and they will also cause a significant loss of real estate value.”

Lynn Stein, a sales representative at Hartford and Stein Real Estate, lives and sells real estate in Prince Edward County, where a large-scale wind turbine project is slated to begin.

“The turbines that are proposed here are quite large,” she said. “The majority of the population here very clearly doesn’t want them.

“Put simply, if you were to buy your future home, given the choice, would you buy where you would have noise, shadow flicker, an industrial view, potential health issues caused by the turbines, and the possibility of a very difficult resale, or would you spend your money elsewhere?”

Read the full story and comments here.

*Editor’s note— The writer is incorrect: Vine had a data set of 5,414 residences but very few, 124, were within 5 km of a turbine. Several were as far as 50 km from a turbine. This is a tactic designed to “dilute” any actual effect. Author Richard Vyn himself said that the limitations of this study (sponsored by MPAC, perhaps to buttress their own disastrous study on this issue earlier this year) were significant and should not be overlooked. Toward the end of his paper he admits, “…while the results indicate a general lack of significantly negative effects across properties examined in this study, this does not preclude any negative effects occurring on individual properties.”

The Realtors and financing professionals contacted for this article also did not note that Vyn failed to include expired listings, i.e., properties that were listed for sale, but never sold.

Wind farm property values: the real story is untold

From today’s National Post

Blowing in the wind

Re: Turbines’ Impact On Realty Limited, Dec. 8.

This study’s authors were able to use less than 1% of the sales collected for them by the Municipal Property Assessment Corporation, and based their conclusions on just a few dozen properties. Moreover, information on expired listings — properties listed for sale that never sold — was not incorporated into the study. You can’t measure what didn’t happen.

Several properties within a kilometre of a wind turbine did sell, over and over (as many as four times in the study period), but this interesting fact was also not investigated. So, you have very few sales, some properties that never sell and some properties that change hands multiple times. What was the real story here?

Jane Wilson, president, Wind Concerns Ontario, Ottawa.

Wind farm and property value study should not have been published: Queen’s professor emeritus

Letter to the Editors of Canadian Journal of Agricultural Economics:

The paper by Vyn and McCullough (2014) should not have been published in its current form as the results are being misinterpreted and highly publicized in the press and in radio broadcasts. The core issue is the lack of power in the statistical tests, a problem partially acknowledged by the authors but then dismissed by their focusing attention on tests for the sensitivity of their model specification. The article appears to encourage the misinterpretation of its statistical findings.

Out of the 5414 sales, only 79 post-turbine sales are of properties within a 5 kilometer radius and the rest are within a 50 kilometer radius. The diversity of the houses in the sample is very large as indicated by their price range of ten thousand to two million dollars and by the relatively low R-squares (0.57) in the hedonic regressions. Given the small number of properties that may have been adversely affected and the great diversity of properties in the sample, it is not at all surprising that the regressions yield no ‘statistically significant’ results. The shortage of observations on properties close to the turbines cannot be overcome by extensive sensitivity testing of model form. The problem is with the lack of data not with model form and focusing on the form tends to obfuscate the issue.

The authors do recognize the data problem: “Unfortunately, there are relatively few observations in the post-turbine periods that are in close proximity to turbines” (p 375) and “Hence, these numbers of observations are likely too few to detect significant effects, which represents a major limitation of this analysis” (p 387). But there are three problems that should have been picked up and corrected through the peer review and editorial decision process.

First, the authors conclude:

“The empirical results generated by the hedonic models, using three different measures to account for disamenity effects, suggest that these turbines have not impacted the value of surrounding properties” (p 388). This is wrong for two reasons. First they could not discern an impact which is different from not having an impact. Second, they misuse the term ‘value’. If you have a choice between two identical properties, identical in all respects except that one is close to a turbine while the other is not and if you choose the far one, then the turbine has an effect on the value of the property. This hypothetical example tests the paper’s hypothesis using common sense rather than a statistical measure.

Second, the authors claim:

“The findings of this paper will provide evidence that may help to resolve the controversy that exists in Ontario regarding the impacts of wind turbines on property values” (p 369) and then proceed to do all they can to make a non-finding appear important and repeat the general statement that they found no significant impact. They correctly said in the CBC interview this morning that their study did not find a statistically significant price effect but the public and reporters, not being familiar with statistical terms interpret this as saying that there was no price effect. Not finding a statistically significant impact due to a data shortage does not mean that there was no significant (i.e. important) impact. This distinction was not made clear enough in the paper nor in the follow up interviews and newspaper articles.

Third, the reviewers and finally the editors should have insisted on the power of the statistical tests to be calculated and reported. I understand that editors in the major health science journals insist on this as their readers, doctors and other clinicians, are not always aware of statistical fine-points but they need to be fully aware of the qualifications before using the results to change their practice. Given the potential impact a misinterpretation of the findings could generate, the test of the power should be reported even in the abstract. The reader should be told how big an impact would have to be before it can be detected by a statistical test with this number of observations. Had the price of properties near the turbines been 10 percent lower than they actually were, would the model have yielded a statistically significant finding of a price decrease at say the 0.05 probability level? What about a 20 percent decrease, would it have been ‘statistically significant’? Answers to this type of question would have been easy to produce and far more relevant that sensitivity tests of the model form.

The paper deals with an important issue that can have serious policy implications affecting the wellbeing of many people. The results can affect the location of wind turbine farms and the compensation claims of affected parties. Incorrect information or interpretations can be very hard to correct. In such cases, it is the journal editors’ responsibility to ensure that results are presented in a manner that, at the very least, does not encourage the misinterpretation of the findings.

Sincerely,

Andrejs Skaburskis, Professor Emeritus

North American Editor: Urban Studies,

School of Urban and Regional Planning,

Queen’s University,

Kingston Ontario, Canada

 

___________________________________________________

Richard J. Vyn and Ryan M. McCullough (2014), The Effects of Wind Turbines on Property Values in Ontario: Does Public Perception Match Empirical Evidence? Canadian Journal of Agricultural Economics 62 p. 365–392

New study on property values adds to “fiery debate”

Looks good to us: move right on in!
Looks good to us: move right on in!

Colin Perkel, Canadian Press, December 7, 2014

Wind turbines generally have little effect on the value of nearby properties with possibly isolated exceptions, a recent study of thousands of home and farm sales has found.

The surprising findings, published in the Canadian Journal of Agricultural Economics, come amid an already fiery debate over wind farm impacts and appear to contradict widely-held views among turbine critics.

The study focused on Ontario’s Melancthon township — home to one of the country’s oldest and largest wind farms — and surrounding areas.

“The lack of significant effects of the Melancthon wind farm is somewhat surprising, given the public outcry regarding the construction of these turbines,” according to the authors.

“These results do not corroborate the concerns raised by residents regarding potential negative impacts of turbines on property values.”

The University of Guelph researchers analyzed more than 7,000 home and farm sales that occurred between 2002 and 2010 in Melancthon Township, which saw 133 turbines put up between 2005 and 2008, and 10 surrounding townships. Of those, more than 1,000 homes and farms were sold more than once, some several times.

“These turbines have not impacted the value of surrounding properties,” co-authors Richard Vyn and Ryan McCullough conclude.

“Further, the nature of the results, which indicate a lack of significant effects, is similar across both rural residential properties and farm properties.”

Vyn said he found the results somewhat surprising given the frequent and public criticisms of turbines.

Despite the overall findings, believed to be the first peer reviewed research on this issue in Canada, the study did find some limited support for those who believe wind farms hurt property values.

One appraiser’s report found the values of five properties close to turbines — bought and resold by wind farm developers — plunged by more than half, the researchers note.

In addition, homes or farms that may not have sold because of nearby turbines don’t show up in the sales data.

Several previous studies have also found turbines have little impact, while some others have concluded the opposite.

The debate around wind farms in Ontario is becoming increasingly bitter. Opponents, who argue turbines can make nearby residents ill, are waiting for the courts to rule on their constitutional challenge to the approvals process.

Dave Launchbury, who has been selling real estate in Melancthon 100 km northwest of Toronto for seven years, said there appears to be a growing stigma attached to properties near turbines. Many potential buyers won’t even look at them, he said.

Launchbury estimated properties close to turbines sell for “at least” 10 per cent less.

One recent study found that perception around the impacts of turbines might contribute to lower property values.

“Assumed property degradation from turbines seems to lower both asking and selling prices,” according to the University of Western Ontario study published late last month.

Vyn, a professor with Guelph’s department of food, agricultural and resource economics, said he wanted to extend the research* to other areas of the province and use later data to see if the initial findings hold up — especially given the increasingly vitriolic opposition to turbines.

“As people hear more and more about the concerns, I wonder if that will show up in more recent property sales transactions,” Vyn said in an interview.

Read the full story and comments here.

*Editor’s note:

Early reviews of this paper point out that the number of sales used is so small as to be insignificant and further, the authors themselves admit that the lack of data such as expired sales (houses that went on the market but never sold) or transactions that were not “open market” (when developers purchase houses from property owners, means that “the results of our study cannot refute the claims that the values of some nearby properties have been impacted by wind turbines…”

Richard Vyn told WCO he is indeed doing more detailed research in Ontario, and on the newer wind “farms”–the Melancthon area is a mature project. He pointed out to us a study from Denmark that shows the negative effects of wind “farms” on neighbouring properties. The abstract is here:

The Vindication of Don Quixote: The Impact of Noise and Visual Pollution from Wind Turbines

Abstract: In this article we quantify the marginal external effects of nearby land-based wind turbines on property prices. We succeed in separating the effect of noise and visual pollution from wind turbines. This is achieved by using a dataset consisting of 12,640 traded residential properties located within 2,500 meters of a turbine sold in the period 2000–2011. Our results show that wind turbines have a significant negative impact on the price schedule of neighboring residential properties. Visual pollution reduces the residential sales price by up to about 3%, while noise pollution reduces the price between 3% and 7%. (JEL Q18, Q38)

Ontario seeking bids on offshore wind farm noise study

Toronto Harbour next?
Toronto Harbour next?

Just prior to the 2011 Ontario election, the Dalton McGuinty government announced a “moratorium” on offshore wind development. It was widely thought this move was to stave off any criticism (and lost votes) from Toronto, the Ontario Liberal stronghold, as there was significant opposition to a project proposed off the Scarborough area, where lake views are prized.

Now, it’s 2014, and the Liberals have a majority and four years ahead in power.

Last Friday, a request for proposal for a noise impact study for offshore wind “farms” was posted on MERX here.

Details here:

Technical Evaluation to Predict Offshore Wind Farm Noise Impacts in Ontario

Detailed Description
This Request for Proposals is an invitation to prospective proponents to submit proposals for the Technical Evaluation of Sound Propagation Modelling Methodologies to Predict Offshore Wind Farm Noise Impacts in Ontario.

Scope of Work
The Preferred Proponent will be required to conduct a technical evaluation of sound propagation modelling methodologies to predict Offshore Wind Farm noise impacts in Ontario (the “Study”), and create a report about the Study to the satisfaction of and for approval by the Ministry (the “Study Report”). The scope of work to be performed by the Preferred Proponent includes:

(i) Conducting a literature review and consulting technical and government specialists;

(ii) Preparing and submitting the Study Report based on the literature review and consultation;

(iii) Providing the chapters of the Study Report to the Ministry in draft form for review, comment and approval by the Ministry, and revising the chapters and final Study Report to the satisfaction of the Ministry; and,

(iv) Participating in kick-off meeting/teleconference and periodic teleconferences with Ministry staff as required.

Field measurements, validation testing and/or the purchase of Offshore Models are outside the scope of this study.

Note that this is essentially a literature review; actual noise measurement is “outside the scope.”

It is also likely only related to audible noise: low frequency noise has not been mentioned in the study scope.

Offshore wind power generation projects have been proposed for several areas in Lakes Ontario, Erie and Huron. Concerns about such development range from worries about noise, damage to the lake beds, especially in Erie where the toxic substances have settled, and for property values of adjacent properties.

Wind farm issues hit the country fairs

ListowelFairFloat

Country fair season is beginning and with it, opportunities for rural communities to make known their dissatisfaction with the Green Energy Act in Ontario, and the invasion of wind power developers.

Yesterday, a float at the Listowel Fair demonstrated community concerns about hydro bills, health and property values, as a result of a proposed wind power project in North Perth. The Elma-Mornington Concerned Citizens group also launched a weather balloon* to show fairgoers the actual height of the turbines proposed for their community.

A weather balloon is worth 1,000 words
A weather balloon is worth 1,000 words

*Need a weather balloon for an event? We may be able to help. Email us at windconcerns@gmail.com

 

Wind farm battle won, war continues

Note the role that a property value guarantee played in the developer’s decision to take the path of least resistance (that’s because they CAN’T guarantee a drop in property value).

Wind shifts focus in Tipton County

By Martin Slagter, July 13 2014,  Kokomo Tribune

The wind died considerably in the northwestern portion of Tipton County last week, leaving the perfect break in the weather for remonstrators of wind farm development in the county to celebrate.

Following 11 months of litigation, Colorado-based juwi Wind will no longer pursue plans to develop Prairie Breeze Wind Farm, a project that would have included 94 wind turbines in Prairie and Liberty townships while investing $300 million in the project.

The turbines that countless members of the public have referred to as “offensive” will remain off of farm property and away from those who claim the structures are too loud while reducing property values.

No matter which side of the aisle residents have been on, Tipton County Commissioner Joe VanBibber described juwi’s decision not to build as “a closure to a difficult time in the community.”

Ultimately, the new stipulations put in place by the Tipton County Board of Zoning Appeals proved to be the biggest contributing factor in juwi’s project not coming to fruition.

Juwi’s lawsuit alleged the BZA had exceeded its authority by increasing the distance wind turbines had to be from property lines and requiring a property value guarantee plan to protect non-participating property owners in the project area.

While some have questioned whether local officials have had the best intentions of the public and landowners as wind energy has become the hot button issue in recent years, there can be little argument that the stipulations played a huge role in preventing the wind turbines from going up. juwi said the stipulations “effectively rendered the project impossible to build.”

VanBibber said he believed juwi “no longer wants to do business in that environment.”

So what type of development is appropriate for the county moving forward?

With one wind farm backing out in the county, attention will no doubt shift back to E.ON’s Wildcat Wind Farm, which still has plans to build a second phase of turbines in center of the county. …

Read the full story here.

Port Ryerse resident to Environment Minister Murray: please stop wind farms

Somehow this got missed in the report
Somehow this got missed in the report

Dear Mr. Murray, new Minister of the Environment,

I would like to congratulate you in your re-election and as the new Minister of the Environment. I was impressed to see your experience as Minister of Transportation and as a former mayor. At the same time I understand what challenges you will be facing in this new position dealing with the incompetence you are inheriting within that department, handed down through the entire inappropriate process created in the Green Energy Act.

This Act took away municipal powers and sidelined 21 other Acts of protection for the environment, human and wildlife habitat for the sake of wind energy development as first priority. This is also why the Liberals are facing a rebellion in rural Ontario by residents who have been ignored and bullied with no consideration as citizens in this province. I would like to suggest that you now have the opportunity to start the change of perception of your political party by doing the right thing.

First of all, you need to give back municipal powers.

Secondly, you need to cancel projects such as the Port Ryerse Windfarm that are suspect to violating any of the environmental or heritage protections within the Green Energy Act or perceived to have possible health problems for people in the area.

Thirdly, you need to change the setbacks to a minimal 2 km. from any residence.

This will be a start. I would also suggest that you back away from wind energy altogether because of the associated problems. I live in Port Ryerse, Norfolk County where we have had wind turbines since 2003 in the west part of the County. We saw the problems of IWT’s as the early experiments with wind energy were being made. We know firsthand about their inefficiency as an energy source, the way many people got sick and had to leave their homes or couldn’t sell them and sometimes sold at a huge loss as well as the inappropriate setbacks for these monstrosities. We now have another project on the eastern part of the County with 13 turbines right around a new development for retirement living, with a golf course to come and a beautiful spa and restaurant. Very sad for the people who bought there or those already living there when it comes time to sell their homes as they have already lost 25-40% of their value which is now common anywhere these things have been built. From the pier in Port Ryerse looking over the water landscape one can actually count 36 of these ugly blights on the landscape over Port Dover including the ones in Haldimand County.

Now we are in the process where you get to approve or cancel a project smack dab in the middle of the County’s lakefront to destroy entirely the landscape of Norfolk County right within the inner Bay of Long Point across from a World Heritage Biosphere Reserve and a cultural heritage landscape which was delineated in a report done for our County back in 2006 called the Untermann-McPhail report or now renamed the Lakeshore report.

Again this information has been sidelined because of the Green Energy Act and taking away municipal powers. In Norfolk County, as with many other areas of rural Ontario, we have many rivers and old dams in need of repair. We also have a local company called Green Bug out of Delhi, Norfolk County putting in hydroelectrical facilities with the Archimedes Screw around the world. They presently have a F.I.T. contract and are awaiting approval from the M.O.E. Our Council and our Heritage Committee I sit on have approved this project we deem to be safe, viable and not interfering in wildlife or human habitat. This is the kind of project we favour for our municipality and we have many other dams in need of repair this could be adapted to.

We do not want to be bullied into any more wind energy which will destroy our lakeshore landscapes and tourism as well as kill our eagles and songbirds and harm our residents and their property values. We also have 3 solar farms which already provide plenty of energy on the grid and have not posed the scale of problems like wind. The municipalities need their powers back to site appropriate electrical facilities according to their own resources and long-term plans.

Attached are some of the reports sent in to the environmental assessment group Stantec and to the M.O.E. to provide information that was not found in any reports of the wind company, UDI Renewables or Boralex. The application was flawed from the beginning when UDI made his application for the F.I.T. contract stating that this project was ”purely surrounded by agricultural land with no significant waterways, heritage or wildlife”. How can anyone miss Lake Erie? At the first public meeting with the company I asked, “What about that eroding cliff?” The answer I got from Uwe Sandner of UDI was, “What cliff?” Our cliff has been dangerously eroding over the last 100 years and especially in the 70’s and 80’s with the high waters of Lake Erie. It is a bluff of 50 feet deep which is seen from Port Dover’s pier by many tourists and locals as an iconic landscape which gave the town its name based on the “White cliffs of Dover”.

I would really like to see an end to the battle between the GTA Liberals and the rest of the province. It is time to end the war against rural Ontario. You have this opportunity. Will you side with the people or the bully money-hungry wind companies with more tribunals and lawsuits? It is time to give back municipal powers, respect those that have declared themselves “Not a Willing Host”, and save Historic Port Ryerse and rural Ontario from more devastation and energy poverty.

We will await the decision from the M.O.E. with the hope that finally there will be a change within the newly elected provincial government to start listening to and respecting its citizens and that this project and others will be CANCELLED utilizing your powers to do the right thing.

Sincerely, Shana Greatrix

Port Ryerse

MPAC study critiqued

When the Municipal Property Assessment Corporation, (an Ontario Crown corporation reporting to the Minister of Finance) released its report on the effect of wind turbines on property assessments (again, we caution readers that this is assessment, not appraisal), Wind Concerns Ontario released a statement to the effect that the report had a number of deficiencies, or  at least unusual parameters to the study, and that it was a “self-serving exercise.”

You may review our statement again here.

What we didn’t say was that there were aspects of the report that were unprofessional.

Just as the report on health effects by Colby et al in 2010 bizarrely claimed that not only was there no evidence of health problems from turbine noise there was so little evidence that no further research was warranted, the MPAC study spent considerable time trying to lay waste to the work done by Ontario real estate appraiser Ben Lansink. Mr Lansink, an AACI (accredited appraiser Canadian Institute), has appeared before numerous tribunals and in court as an expert witness on “injurious affection”; he studied several areas of Ontario where wind power projects operate, and documented the effect on property value.

Reviewers Michael McCann and Wayne Gulden have now done formal critiques of the MPAC study, and while criticizing its methodology and results,  also claim that the action of an Ontario Crown corporation to discredit a professional real estate appraiser were uncalled for.

See the critique here: MPAC v Lansink; McCann and Gulden Reviews, June 2014

The interesting thing is that the chief appraiser at MPAC is himself an AACI, i.e., not just an assessor, so there is a case to be made about the work done under his supervision, with regard to a fellow member of the Appraisal Institute of Canada. They have rules about such things. Those interested should contact the Institute’s Professional Practice section.