WIND CONCERNS ONTARIO
STATEMENT ON MPAC 2012 ASSESSMENT BASE YEAR STUDY: “IMPACT OF INDUSTRIAL WIND TURBINES ON RESIDENTIAL PROPERTY ASSESSMENT IN ONTARIO”
April 25, 2014
The Municipal Property Assessment Corporation or MPAC, the independent property assessment body which reports to the Ontario Ministry of Finance, released its long awaited report on the effect of industrial wind turbines on property assessment in Ontario in mid-April.
Anyone waiting for this report, which was more than a year late in coming, was disappointed: despite studies done by real estate appraisers in Ontario showing significant loss in value for properties near wind turbines, MPAC said it “cannot conclude any loss in price” due to proximity to a wind turbine.
Wind Concerns Ontario consulted with several individuals including real estate appraisers and finance professionals about the MPAC report.
“It’s just a self-serving, bureaucratic exercise in mathematics done by MPAC for their government masters,” said Wind Concerns Ontario president Jane Wilson. “The study was done by assessors, not appraisers—this was not a real-world study using on-the-ground valuation techniques such as direct comparison to property sales.”
In fact, Wilson said WCO’s advisors point out that the MPAC study actually does show a property value loss of 25%. “They claim there is no value loss, but then they present a chart that shows there is, and the effect extends out as far as five kilometers,” Wilson said.
What they left out
What MPAC left out of the study is more interesting than what’s in it, says Wind Concerns Ontario.
Here’s a summary:
-MPAC studied areas near turbines 1.5 megawatts or larger in capacity—this excludes areas with older, less powerful but still large-scale turbines; these are areas where studies by independent real estate professionals have indicated significant property value loss.
-MPAC used only sales after 2008, which means for areas like Kincardine and Ripley, the damage was already done, and is reflected in the data they are using for comparison
-MPAC chose not to include properties that are now vacant, such as those that have been purchased by wind power developers as they have become uninhabitable
-MPAC left out the sales that would have been most informative, i.e., those that sold for significantly less than their assessed values and surely demanded some further investigation before being dismissed.
-MPAC as assessors study sales data only—there is no data on houses listed for sale that do not sell, or which are on the market for extended periods of time
U.S.-based real estate appraiser Mike McCann examined the study and concluded that the assessors went against their own professional standards for assessment methodology: “the IAAO (International Association of Assessing Officers) standards discourage regression analysis and instead recommend the use of paired sales methodology, with direct, detailed comparisons of individual sales data, near and far from the environmental disamenity in question,” he said. MPAC’s regression studies actually show a loss of property value, he explains, when the raw data is sorted by distance, yet the authors somehow concluded there was no impact on value.
The real meaning of MPAC’s report
Prior to the Green Energy Act being passed in 2009, countless municipalities asked the Ontario government for economic analysis of the impact of wind power projects on their communities. “They never got that,” says Jane Wilson. “And the Auditor General in his 2011 annual report said Ontario never did a cost-benefit analysis for the impact of wind power generation projects on Ontario’s economy—we never got that either.
“This government doesn’t want the public to know the true impact of its decision to rush into large-scale industrial wind power on Ontario’s small towns and rural communities—property value loss would be one metric of just how badly this decision has harmed our economy.”
Instead, Wilson says, “ MPAC obliged its government masters by coming up with this flawed and self-serving study that was designed to produce a specific result, which will doubtless now be used by the government and its wind power industry partner to put a ‘chill’ on requests for re-assessment, and on legal actions based on lost property value.”
Jane Wilson WCO.firstname.lastname@example.org
MPAC study available here.
MPAC sales chart showing loss of value: http://www.mpac.ca/pdf/AppendixD2.pdf