What impact do wind turbines have on property value?

Wind turbines and their proximity to residential real estate has long been a matter of turbulent debate, but a new study has found that these turbines actually have very little impact on the value of nearby properties.

The results of the study, which was published in the Canadian Journal of Agricultural Economics, surprised its co-author Richard Vy. “You hear a lot of concern and resistance about the development of the wind energy industry,” he said.

“Given the level of concern that has been expressed, I thought we would find some evidence of negative impact. It surprised me that there was no significant impact on property values.”

The study focused on Ontario’s Melancthon township, which saw 133 turbines put up between 2005 and 2008. The researchers from the University of Guelph 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.

“This issue caught my attention because I had done some property value research,” added Vy. “I had some sales data for the Melanchton area, so I wanted to use that to see what impact there may be from the wind turbines, to see whether the sales data supported the concerns that had been expressed.”

In Ontario, the law doesn’t set a minimum lot size for housing a wind turbine, but every municipality has its own regulations. In Melanchton, a property has to be at least 50 acres, and the owners of the property are provided with a stipend.

Dave Launchbury, a local sales representative at iPro Realty, said the impact will be on the smaller, two-acre property that is adjacent to a larger lot with a wind turbine. “One guy is getting paid and the other guy is not getting paid,” he added. “A property with a turbine on it has more value. I know people here who were against wind turbines unless they could get them on their property.”

The results of the University of Guelph study are consistent with previously published studies, particularly in the U.S., which have used the same method to assess the issue, said Vy.

“The majority of studies that use this method, based on property sales, don’t seem to be picking up any significant impacts on property values,” he added.

But this methodology estimates an average impact across all affected properties, rather than estimating an impact on individual properties.  “Just because the results indicate no significant impact, that doesn’t mean there aren’t individual properties that have been impacted,” Vy explained. “All it means is, in general, the negative impacts aren’t occurring across all properties in close proximity to wind turbines.

“You certainly hear the concerns that are expressed and the stories about how people have to take a much lower price, but I just want to clarify that the results are not saying these scenarios are wrong, it just means there are a whole bunch of other properties in close proximity that aren’t experiencing the same drop in value.”
 

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COMMENTS

  • by Lynn Stein 2014-12-12 7:00:33 PM

    I live in an area and sell real estate in the same area, that is threatened by wind turbines. Put simply, if you were to buy your future home, given the choice, and you always are, 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? My experience over the last 7 years when turbines have been threatened in the South portion of Prince Edward County is that I have had 2 clients who said they did not care (out of hundreds) and neither actually put their money where their mouth was. All bought in areas of The County that were not threatened. Would you spend the same for a home beside an industrial plant that you would beside a gorgeous field? I have seen many studies... They don't count the ones that never sell. They don't count the ones the turbine proponent bought to make way for their business and investment. They don't mention the gag order included in the turbine contacts that you can't complain. You need to tell the whole story intelligently without this unsubstantiated and fabricated nonsense. I live it.

  • by 2014-12-14 10:39:11 AM

    Hi Jennifer. Sorry but your article is not correct. Wind turbines will/are/do affect property values. I have been a Real Estate Broker for over 10 years. At present it is consumer confidence which is the issue but once the health issues are understood all bets are off. I market many properties in the Grand Bend area and we are seeing more and more folks from the Toronto a
    Market. They hate them!! Turbines complicate your property enjoyment, period. That alone spells depreciated value(s). Now let's discuss how the super large blades make the human body feel. Woozy, sick. . . The Human Body (I do not know the affect on livestock/pets) detects a very low/strong vibration/noise (not to our ears) and this is in fact causing serious health issues. Turbines cause shadowing, kill birds and bats, throw large chunks of ice and only last 20 years? Turbines should be in remote, unpopulated locations. To all the folks that have turbines on their property, enjoy your $18,000 /- per turbine/year because you will be giving most of the lease payments back (in much lower property value) when you sell. FYI there is s 'Gag Order' written in turbine leases which states leaseholders are not allowed to discuss health issues concerning turbines or else no more lease payments (plus payback what you have received) for the 15 years. $265,000 $$. These monsters are very bad for Ontario. We all pay to subsidize the electricity they produce and they WILL also cause a significant LOSS of real estate $$ value.

    John Leonard Goodwin
    Broker
    Century 21 First Canadian Corp
    London-Grand Bend

  • by Jennifer 2014-12-15 9:16:51 AM

    Thank you, Lynn and John, for your comments above. Always great to receive feedback from those of you in the industry with first-hand experience of issues like this one. If I write a follow-up piece, I will certainly be in touch.

    But I just wanted to point out ... I was reporting the results of a study, conducted by professors at the University of Guelph, which found that, in one targeted area, wind turbines did not have an impact on property values.

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