Do High-Voltage Lines Zap Property Values?
The verdict is delivered as if it's a clear-cut conclusion: Being near a high-voltage electric power line does not affect home values. But reading beyond the headline in the current issue of The Appraisal Journal reveals a different story.
Their "no effect" message is a surprise. Electric lines have to go somewhere, of course, but few people relish the idea of living next to big metal towers that carry high-voltage current. It's logical to think there might be at least some downward tug on home values. And plenty of people may be happy to buy a nice house at a bit of a discount because it's next to power lines. Markets tend to sort such things out.
But a closer read of the actual report on which the story is based, High-Voltage Transmission Lines: Proximity, Visibility, and Encumbrance Effects, reveals that this is hardly a trustworthy research paper. If appraisers in the field rely on this article, they could produce skewed valuations.
First clue: The study was paid for by Northeast Utilities, in anticipation of expansion of high-voltage transmission grid in New England. Second clue: The authors, James A. Chalmers and Frank A. Voorvaart, are consultants in the fields of real estate damages and real estate litigation. You might see them in court if you were to, say, sue a utility company that wants to run a high-power line near your home.
In fact, their report notes that their attempt to determine if there's more of a hit to property values during a weak real estate market vs. a booming one was hampered by the small sample of homes that were in declining markets during between 2005 and 2007, when they looked at that question. (The bulk of the study covers 1,200 sales between 1998 and 2007.)
In other parts of the report they also cite shortcomings in the research samples before concluding there was "no evidence" to support the theory that property values are hurt by being near power lines. I'm no Perry Mason, but "no evidence" does not necessarily mean "no effect." The study does note a small decline in property values is attributable to having an easement (or right-of-way) next to a property.
What do you think? Do you expect a lower price if you can see high-voltage lines next to a home? Is it more of an issue in the suburbs than in rural areas? Would you buy a home next to power lines? Do you happily live there now?
August 4, 2009; 8:42 AM ET
Categories: Neighborhoods , Outdoors , Selling , Statistics
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