What impact do wind turbines have on property value?

by Jennifer Paterson on 11 Dec 2014
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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