Orell Anderson

From Hither to There (Part II): Transmission Lines and Property Values

Orell Anderson, MAI, FRICS, ASA

Orell Anderson, MAI, FRICS, ASA

Real Estate Litigation Consultant, Forensic Appraiser, Expert Witness, Grade Action, Environmental, Eminent Domain, and Construction Defects

Published February 16, 2016

THE TRANSMISSION Challenge

In my concluding post I talked most the importance of loftier-voltage overhead transmission lines in the new renewable energy mural. Transmission is 1 of the greatest challenges facing wind and solar power in the United States and Europe. Getting newly generated free energy to the end consumer requires updating existing lines and developing new transmission line projects, but siting new projects tin can be a long and difficult procedure. Studies also evidence that people support renewable energy generation in theory, only do not desire transmission corridors nearly their homes. States notice themselves committed to renewable energy generation goals and capable of generating plenty of renewable energy, nevertheless free energy companies face local opposition in transmitting this free energy to consumers. A common concern expressed by property owners is that visible transmission lines may have a negative impact on property value. In this mail I'd like to present some of the scholarly literature since 2010 that addresses this question.

THE LITERATURE BEFORE 2010

The enquiry on powerline impacts on property values has been around since the 1960s. It generally breaks down into 3 categories—large-scale statistical price studies, survey-based inquiry, and more traditional appraisal methods, such every bit paired sales and resale analyses. Statistical studies of property value diminution due to power lines are generally hedonic price models that endeavour to isolate the effects of powerlines from the furnishings of other property characteristics. Survey studies primarily consist of contingent valuation experiments in which subjects are asked to choose alternative scenarios to arm-twist their preferences for environmental amenities and other non-market place goods.  In 2010, Thomas O. Jackson and Jennifer Pitts reviewed the literature and observed that price furnishings, if whatever were observed, ranged from 2% to 9% and that these effects decreased with distance and fourth dimension. Any price effects were found to be primarily attributable to the visual impact of the lines and supporting steel pylons.

THE LITERATURE Afterwards 2010

So what has been happened since Jackson and Pitt'southward 2010 review in the survey-based inquiry, statistical research, and more than traditional appraisal methods? The brusque respond is that not much has happened in the past five years—or twenty-five years for that matter. The long reply is that there have been some minor shifts in methodology and focus, simply the conclusions have more often than not remained consequent with the pre-2010 literature.

STATISTICAL STUDIES

Though researchers continue to produce hedonic studies, their methodology and conclusions accept remained more or less the same. Since 2010, there have been several studies outside the U.S. and Canada, specifically in the UK, Australia, and New Zealand. This is of import because transmission corridors differ from one country to the adjacent, so that applying results of a U.S. toll study to a location outside the U.S. may exist misleading. In New Zealand, for case, pylons may be placed straight on a individual lot. Since 2010, the studies that distinguished between the pylons and the lines themselves in their hedonic models found that if any bear on was observed it was largely due to the pylons, not the lines themselves. One 2013 paper by Steven Bottemiller and Marvin Wolverton, published in the Appraisal Journal, found that when the distinction between high-cease and mid-priced homes was considered in a study of Seattle homes abutting transmission lines, whatsoever negative effects were far greater for luxury homes. Though researchers have for decades institute that any effects are usually attributable to the visual impact of powerlines, most statistical studies continue measuring the price impacts of powerlines based solely on a proximity variable rather than whatever view variables. It is of course much easier to calculate altitude, since views are affected by vegetation and topography. However, in the hedonic literature specific to the price bear on of dumb viewsheds, there have been some interesting developments recently. Researchers take been using 3D GIS datasets that allow them to calculate the viewsheds of each and every property in a dataset. Hopefully we start seeing more of this sophisticated methodology in the transmission line literature. The conclusions of the literature since 2010 testify that powerlines have modest or negligible impacts on nearby property values. Any impacts that are observed are largely attributable to the supporting pylons, not the lines themselves, and these impacts are generally due to the visual impact of the pylons. Some studies find positive price impacts considering of the increased privacy—one fewer neighbor—and recreational value afforded by transmission line corridors.

SURVEY-BASED RESEARCH

If not much has happened in the statistical literature, there has been even less activity in the survey-based literature specific to transmission lines. Several studies have measured the benefits of removing or undergrounding manual lines, and conclusions here accept also remained consequent. People express a full general approval of dark-green energy generation, merely do not like seeing transmission lines in their backyards. They often express a strong preference for undergrounding, but when willingness-to-pay is measured, few are willing to pay the college costs of undergrounding transmission lines.

APPRAISAL METHODS

Few scholars accept turned to traditional appraisal methods equally an alternative to hedonic studies or contingent valuation experiments. The trend in the literature is to either improve the existing hedonic models or to go abroad from transactional data altogether and rely on survey-based contingent valuation. If their appraisal methods are used, they are more often than not combined with a hedonic regression model. However, hedonic regressions require big and rich datasets, and then they are near suited for densely populated areas. In a 2012 study published in the Appraisal Journal, Chalmers conducted a case written report assay of rural backdrop in Montana. The study found that strictly recreational properties and agricultural properties showed piffling to no cost effects. The larger a holding, the smaller the effect. The more unique a property, the smaller the event.

OTHER OBSERVATIONS

A broad review of the literature shows that much of the activity has been going on in "softer" sociological studies on the public perception of powerlines. These papers accept generally been concerned with examining how locals view powerlines, why they feel that way, and how policymakers and energy companies can work with or improve the local perception of powerline projects. Much of this literature emphasizes the importance of new powerline projects in the shift to renewable energy generation. Enquiry consistently finds that green energy generation is perceived positively past the public, while its concrete manifestations—peculiarly turbines and transmission lines—are frequently viewed negatively. If more than people run across high-voltage transmission lines as a necessary function of a green energy future, peradventure their perception of them would change. A review of property value diminution and disamenity literature in general reveals that much of the enquiry activity has shifted to studies of air current power and the touch on of current of air farms on belongings values. Yet, every bit already mentioned, some of the most interesting statistical studies in the past v years have come out of the enquiry on views and their impact on belongings values.

Last THOUGHTS

It e'er takes fourth dimension for the research to catch up. Hopefully, the renewed interest in transmission lines as "green energy superhighways" volition breathe new life into the literature on the furnishings of powerlines on property values. Equally somebody who has appraised many properties located adjacent to powerlines, my prediction is that the basic conclusions volition not change. Withal, it would be beneficial to all those in the field to see studies with more than rigorous and subtle handling of view effects and studies specifically measuring the effects of hugger-mugger transmission lines (rather than distribution lines) on holding values.

What would yous like to see? What is your view of the literature so far?

Others likewise viewed

  • Hedonics, Litigation, and Property Value Diminution

    Orell Anderson, MAI, FRICS, ASA 5y

  • Peek-a-Boo! The Value of a View

    Orell Anderson, MAI, FRICS, ASA 6y

  • Was Blind, But Now I See: The Million Dollar View

    Orell Anderson, MAI, FRICS, ASA 6y

  • A Defense Mechanism Chosen Regression

    Orell Anderson, MAI, FRICS, ASA 7y