A new study confirms the loss of property value near industrial-scale or utility-scale wind power projects, but flaws in the methodology don’t show just how bad the situation really is
November 28, 2018
University of Guelph associate professor Richard Vyn sent along his recent paper on wind turbines and property values, published in the current issue of Land Economics.
The paper, titled “Property Value Impacts of Wind Turbines and the Influence of Attitudes toward Wind Energy,” concludes with this paragraph:
“The results of this study provide strong evidence that wind turbines in Ontario have negatively impacted surrounding property values. The results also demonstrate that these impacts increase with the number of turbines in close proximity. Hence, this study adds to the evidence contributed by more recent empirical studies that wind facilities can impact property values.”
Mr. Vyn structured his study around the notion of comparing property values between willing communities and “unwilling host” communities as a way of examining the effect of “different attitudes toward wind energy.”
His supposition was that the “nature of turbine impacts … may be influenced by attitudes…” In fact, he writes, he investigates whether the “increase in concerns expressed publicly and through the media have contributed to a greater impact on property values.”
For property values in the “opposed municipalities,” Vyn estimates property value loss is 5.61% to 9.10% during the announcement period for a wind power project, and 7.93% to 9.42% in the post-construction period.
Citizen opposition a factor
The author blames citizen opposition and media attention to negative attitudes. Media attention due to active opposition by “grassroots organizations such as Wind Concerns Ontario,” he says, so impacts on health and property values have been covered in the media with the result that “This media attention, which has increased substantially in recent years, may have influenced attitudes toward wind energy and perceptions of turbine impacts.”
So, which is the chicken and which is the egg? The thousands of official government records of reports of noise emissions from wind turbines, adverse health effects, disturbed or failed water wells, and shadow flicker or strobe effect have nothing whatever to do with property value, it may just be down to citizen groups expressing opposition?
The word “noise” is not mentioned in the paper. Neither is the fact that leaseholders must acknowledge the negative impacts of wind turbines and sign a non-disclosure agreement. And, the study area was of “mature” wind power projects in which it must be acknowledged that people experiencing the worst effects have probably already left?
Expired sales omitted
We asked an accredited professional in real estate valuation to review the paper. His findings are summarized here.
Willing vs. unwilling: The bifurcation between willing and unopposed communities is artificial, and supposes that there will be minimal effects on value in willing communities. The fact is, almost every wind power project in Ontario—including those in the unorganized communities in Ontario’s North—was opposed to the extent that citizens took steps to appeal the projects and in many cases, also proceeded to court.
Flawed supporting studies: Among others, the author cites the Heintzelmann, Vyn and Guth study of properties on Wolfe Island, which was based on MPAC data, but “ignores key information from MLS sources which clearly demonstrate an active market on the east of the island where there are no turbines, and stagnant market conditions typified by expired listings and no sales on the west end among the turbines. Had the researchers looked at the geographic location of the sales data they used in relation to the wind turbines, it would have been immediately clear that the turbines were stifling the market on the west half of the island. Instead, they took it as a data set and did ‘hedonic magic’ to reach a conclusion that was clearly at odds with reality.”
Treatment of turbine impact: A “weakness in the study is found in the pooling of sales by wind farm leading to aggregation of impacts. Usually this results in an average and, given that there are fewer sales in close proximity to wind turbines—for obvious reasons—the average [property value loss] would tend to be lower, given the larger number of sales at greater distance from the turbines. The admission of a weak market close to the turbines says a lot … but the obvious conclusion is ignored by the author.”
The story is in the sales: “It is clear from the study that proximity to wind turbines dampens market activity and lowers property value but there is no support for the blame the victim aspect of their conclusions. As a result of pooling data, it is likely that the magnitude of property value loss is seriously understated.”
No credentials: Finally, our analyst comments that the author has no credentials in real estate or in the professional practice of valuation. “As a result, the analysis of the real estate market is without weight.”
For our part, while we are happy to see research into the negative economic impacts of industrial-scale or utility-scale wind power projects, this study didn’t go far enough, or use methodology that would really address the issues.
Once again, the fundamental belief seems to be that there is something wrong with the idea of people objecting to the presence of industrial-scale wind turbines. Again, the word “noise” is not mentioned. The Ontario Real Estate Association Seller Information sheet has a question pertaining to the existence of any plans near a property to be sold for quarries, garbage dumps, or wind turbines. So, the “disamenity” or reason why people would value the property less is noise and construction activity for quarries, and smell and again noise and truck traffic for a garbage dump. But for wind turbines, the author alleges the only possible reason could be how the turbines look and the possible negative influence of information from citizen groups in opposition.
In other words, the author doesn’t believe there could be any rationale for an objection to living near 500-foot noisy industrial structures.
Giant pro-wind PR machine
We are sorry to say that this paper appears to be yet another volley in what environment writer Jude Clemente said in Forbes magazine said is “a heavily funded public relations machine to make Americans think that wind power doesn’t impact property values, and it’s every bit as influential as the ‘Big Oil’ the anti-fossil fuel movement purports to be so against.”
“Many members of the Real Estate and Appraisal businesses, however, have been clear that wind power DOES impact property values,” Clemente concludes. “It would seem to me that these groups have no vested interest in supporting wind power or not supporting it…. Wind’s impact on local property values can no longer be ignored.”
So, while Mr Vyn acknowledges property value loss and impact on Ontario communities from being forced to “host” wind power projects, he does so in such a way as to diminish the effect, while apparently dismissing the valid concerns of residents for the impacts on health, the environment, and the economy.