The Impact of Wind Turbines on Property Values
The siting of new wind energy facilities is very controversial. Wind turbines are often perceived to have substantial negative impacts on local residents, and new research by Clarkson School of Business Assistant Professor Martin Heintzelman and Environmental Sciences and Engineering Ph.D. candidate Carrie Tuttle shows that, in some communities, these impacts translate into declines in property values.
In a study recently accepted for publication in the journal Land Economics, Heintzelman and Tuttle find that property values declined following the development of new wind facilities in Clinton and Franklin Counties in Northern New York, but that, in Lewis County, property values were unaffected, and possibly increased.
The study used a large dataset of more than 11,000 real estate transactions in a hedonic analysis. Hedonic analysis is a type of regression analysis that uses transaction details, including the price as well as the characteristics of the transacted properties to estimate how individual parcel characteristics, like the distance to wind turbines, affect the transaction price.
One implication, according to Heintzelman, is that existing schemes to compensate residents local to wind project may be inadequate. “Communities facing the prospect of a wind development should be careful to ensure that all affected residents are being compensated for any harms that are caused, including reductions in property values.”
In the recent past, Heintzelman has used similar analyses to measure the impact of the mix of local land-uses on property values and to look at specific policies which encourage local preservation of open space, as well as fund historic preservation projects. This work has been published in the journals Land Economics and The B.E. Journal of Economic Analysis & Policy.
In on-going work with Ms. Tuttle, he is looking at how environmental amenities, including lake water quality and ecological integrity, as well as land-use restrictions, are valued in the Adirondack Park. Preliminary analysis suggests that property owners do value environmental quality and that certain indicators, like the presence of the Common Loon on a nearby lake, have a substantial impact on property values.
Heintzelman is assistant professor, Economics and Financial Studies, and the Fredric C. Menz Scholar of Environmental Economics. He is also director of the Clarkson University Center for Canadian Studies
Professor Martin Heintzelman and Environmental Sciences and Engineering Ph.D. candidate Carrie Tuttle.