Property Valuation Impacts
How much would a 150-foot-tall high-voltage transmission corridor impact property values in rural Maine?
“In an interview with New Hampshire Public Radio (NHPR), the Applicants’ property valuation consultant, James Chalmers, concurred in the possibility of such a loss, stating that:
If it is basically a view-lot and your view is down the valley and you string transmission lines across that valley right in the middle of the viewshed and that becomes kind of the dominant feature of the view, I can easily imagine your $200,000 second home might only be a $75,000 second home or a $100,000 second home – something like that.
We have anecdotal evidence, such as the couple who spoke with me at town meeting. Their house in Palermo is under contract to be sold, and they have a house in another state under contract on contingency. Their buyer is now waffling, because of the proposed transmission corridor.
That’s one data point.
But anecdote isn’t scientific. (right? Except that data is made of hundreds or thousands of anecdotes turned into fact.)
[Note: my husband says this article is very dry and boring. But, there is a discussion of stray voltage, dairy cows, and court awards to farmers at the bottom, so keep reading!]
These are some studies and other documents relevant to this discussion, presented in the order in which I read them. They are not sorted by preference to our cause:
The first study I reviewed was “The Pricing of Power Lines: A Geospatial Approach to Measuring Residential Property Values” by David Wyman & Chris Mothorpe, 2018. I paid for access to the full article because it appeared to be a large dataset, and not funded by a utility.
Summary: this study looked at vacant land lot sales across 17 years in a single county in South Carolina. This was a rural county that, since the 1960s, had significant transmission line coverage due to a nuclear power plant. The study only looked at vacant lots in order to avoid the complicating factor of structure value. The dataset was ultimately 5455 vacant lot sales within the noted time period. As indicated by the title, this was a GIS-focused study which analyzed pricing variance using four different GIS models. The outcome of the study was: lots adjacent to power lines sold for 44.9% less, and lots within 1000 feet sold for 17.9% less. Lots within viewshed of a tower had pricing diminution of 22.1%.
Why does this study, which is so large, offer such a significant estimation of pricing impact from proximity to transmission corridors, when earlier studies suggested there was little price impact? The authors present two reasons: earlier studies threw out outlier data – a standard of statistical methodology, but outlier data is very important to accurately estimate price impacts in this sort of situation.
The second reason is that utility companies have financed many of the existing transmission line price impact studies, and meta-analyses or overviews of study data thus incorporate necessarily biased data. In an example given by the authors, “utility companies financed 22 out of 27 power line studies reviewed by Kroll and Priestley (1992)” (page 126.)
The next study is called “High-Voltage Transmission lines and Residential Property Values in New England: What Has Been Learned” by James A. Chalmers, PhD.
Chalmers is known for having written multiple studies on this topic across the country. This article compared three studies in New England. All three studies were paid for by utility companies.
2008 Massachusetts and Connecticut Study, paid for by Northeast Utilities, now known as Eversource. Looked at 1200 home sales from 1998-2007, published in 2009 under the name “High Voltage Transmission Lines: Proximity, Visibility, and Encumbrance Effects”
New Hampshire Research Study, paid for by Northern Pass Transmission LLC, Public Service Company of New Hampshire, and National Grid. Looked at 78 case study sales of residential properties that were encumbered by or adjacent to a high-voltage ROW. This study was published in 2015 as “High Voltage Transmission Lines and Real Estate Markets in New Hampshire: A Research Report.”
2018 Massachusetts and Connecticut Study, paid for Eversource. A statistical study of 1800 residential property sales and a case study analysis of 42 residential property sales. Published in 2018 as “High Voltage Transmission Lines and Real Estate Markets in Massachusetts and Connecticut: A Research Report.”
This study by Chalmers also criticizes the study by Wyman and Mothorpe, because: the selected county is too diverse; the lots selected are not controlled for zoning, highest and best use, or amenity improvements; the lots are residential, commercial, and industrial; encumbrance of ROW was not measured as a variable.
I disagree with Chalmers’ critique, primarily because, as described by the Wyman and Morthorpe study, most of the pricing impact should be estimated based on the land value without the added complexity of structures. It is a cleaner way to estimate the impact.
However, even this work by Chalmers finds an adverse price effect:
“For encumbered properties with homes within 100 feet of an existing HVTL ROW boundary and clear or partial structure visibility, the probability of a sale price effect, should they be sold, is indicated by the research to be in the range of 46% to 59%, depending on structure visibility.” (page 275)
The structures in the ROWs addressed in Chalmers’ New England studies are between 55 feet and 95 feet in height: all substantially shorter than the structures we are hearing about (140-150 feet).
A good row of white pines will block visibility of a 55-95 foot structure. It is not possible to hide a proximate 140-150 foot structure with the natural landscape of this region.
Prepared for the State of New Hampshire Office of the Attorney General Counsel for the Public. SEC Docket No. 2015-06
Frankly, this document should just be read in its entirety by everyone who cares about this project, as it is closely comparable to our situation. The biggest difference? The Northern Pass project proposed only 32 miles of new ROW. It was canceled, in part due to significant landowner outcry. Property Valuation commentary starts on page 17 and is a direct refutation of the biased Chalmers New England studies paid for by utilities.
“there is potentially more than $1.1 billion in residential property that could be affected by the presence of the line. While some properties with high scenic view amenities could be severely affected and others will have minimal or no negative impacts, the loss in wealth to current property owners within this viewshed could be as much as $15 to $30 million.” (page 2) Now multiply that by the variance in new ROW length of 32 miles compared to 109 miles….
“Even a reduction of 15 one- hundredth of one percent (0.15%) in regional visitation in the affected tourism regions could result in reductions in direct spending losses of $8 million per year and the loss of nearly 200 jobs per year.” (page 3)
“Even a 1% reduction in residential property values within the viewshed of the proposed Project represents more than $11 million in potential wealth loss to current property owners, lower rental income and a reduction in the property tax base when these losses are ultimately realized in lower-priced property sales.” (page 17 – and remember, only 32 miles of new ROW)
“we believe Chalmers entirely ignores the part of the market that may be most severely affected: land with high view amenity value, with and without structures.” (page 18)
And the pièce de résistance! Chalmers, in an interview, stated,
“If it is basically a view-lot and your view is down the valley and you string transmission lines across that valley right in the middle of the viewshed and that becomes kind of the dominant feature of the view, I can easily imagine your $200,000 second home might only be a $75,000 second home or a $100,000 second home – something like that.” (page 59)
House Hearing 112 Congress
I’m including this not because it is a good corollary for the issues of a rural New England project, but because it demonstrates a city-wide negative property influence attached to a transmission corridor.
This project is a 3.5 mile, 500kv, 200 foot tall overhead line run through a tight urban/suburban pre-existing but unused corridor in Chino Hills, CA. The city saw a 17% drop in property values across the city in the ten months after the project began.
The testimony closes with the recurring question about burying the lines: “Is it possible that our friends in Europe or in Russia or in China are anticipating that maybe it is worth the tradeoff given what we don't know about electromagnetic fields and the consequences of that in the future?” (Edward Royce, House Committee on Financial Services, April 14th, 2012 testimony)
A Summary of Published Research on Property Value Impacts from High Voltage Transmission Lines
This was a very boring study prepared for a Montana 500kv line; and primarily re-hashing the Chalmers “Montana Study”, which was composed of 49 case studies of properties in proximity of an existing corridor, and a statistical analysis a residential subdivision. The Chalmers Montana study, like all the Chalmers work mentioned here, was paid for by a utility, in this case, Northwestern Energy. This work was well refuted by the Northern Pass study listed above.
“Criticisms of the comparison sales approach have to do with the influence of an author’s expert judgment in locating and refining a set of comparable sales for analytical purposes. The implication is not so much that another appraisal would come to different conclusions, but rather that the choice and manipulation of comparables could influence the finding of price impact.” (page 4)
“The property in question is a 350-acre parcel in central Broadwater County with Missouri River frontage sold without improvements in 2006. The Colstrip-BPA 500 kV line travels through the middle of property and is visible from most areas of the property. ….The seller reported showing the property an estimated 25 to 30 times, stated that the transmission lines were always an issue with prospective buyers, and estimated the loss from the transmission line in terms of potential sale price in the absence of transmission line at 25 percent.” (page 9)
“A separate statistical analysis was performed on lot sales in Aspen Valley Ranches, a rural subdivision with 156 separate 20-acre (+/-) lots and bisected by the Colstrip-BPA 500 kV line. In all, 183 sales of unimproved lots between 1986 and 2010 were included in the analysis, which involved rigorous testing of factors such as lot size for their influence on sales price. The statistical analysis indicates an average discount of 15 percent in the sale price of the lots within 1,000 feet of the center line of the 500kV line.” (page 10)
“Realtors associated with the panel held by the MSTI Review Project as well as others active in southwestern Montana have attested to a marked impact of the proposed project on real estate sales activity over the past four years.25 One concern is that “top tier” buyers won’t consider recreational properties affected (or potentially affected) by a transmission line.” (page 11)
“Footnote 25: Kevin Pearce, a broker-owner with New Frontier Ranches in Twin Bridges, said the study only addressed an existing line and didn't consider the effects during construction of a power line. He said the presence of a power line can completely shut out some buyers.
"A top-tier buyer is not going to be interested, period," he said. "Then you're going to be left with a second-tier buyer and a reduced price." “ (page 17)
The Effects of Electric Transmission Lines on Property Values: A Literature Review
by Thomas O. Jackson and Jennifer Pitts. June 2020
This study is an example of a literature review which purports to be unbiased, but picks and chooses sources without revealing funding. As might be expected, the authors find no significant effects of property value diminution. A brief review of Thomas O. Jackson’s expert witness work, which he publishes on his website, shows that he specializes in providing expert testimony in favor large corporations being accused of pollution or other environmental contamination. Listed are cases involving alleged: contamination from jet manufacturing, airborne contamination from a refinery, groundwater contamination, another refinery case, TCE contamination of groundwater, and a superfund landfill site.
Jackson and Pitts’ “meta-study” leaves out Document 1 in this post - The Pricing of Powerlines: A Geospatial Approach, which is the single academic study I have found that announces itself as free of funding by utility companies. Of course, the NH Economic Impact Analysis and the House Hearing 112 Congress document are also free of such funding, but don’t qualify as studies.
So, we can conclude that at least in part, Thomas O. Jackson receives funding by providing expert witness testimony against small property owners, and in favor of big polluters. Funding, obviously, presents a conflict of interest.
Valuation Guidelines for Properties with Electric Transmission Lines
by Kurt C. Kielisch, ASA, IFAS, SR/WA, R/W-AC
This is a document written by an appraiser!
This is also a literature study, as is Document 6 above. An interesting line from the introduction: “Stray voltage was also included in this research due to the concern dairy farmers have relating to its presence from high voltage power lines”. (page 2)
2006 studies of rural agricultural and recreation land with 60 ft wood H-poles found 23% diminution in sale price. When the line bisected a large property, the loss was as large as 34%. (page 3)
1993 study showed homes adjoining transmission lines in the Houston area took 6 times longer to sell and experienced a 10%-30% loss in value. (page 4)
2007 Tucson AZ study: when looking at land-only impacts found a 40% loss in property values. (page 4)
Several individual appraisal examples where homes sold for 27% less, 29% less, and 42% less (page 5)
Stray Voltage: “Courts have compensated farmers for their losses due to stray voltage when all other factors are eliminated. In 1999 a jury awarded Peterson Bros. Dairy $700,000 after deciding that stray voltage from an automated feeding system from Maddalena’s Dairy Equipment of Petaluma, California slashed the herd’s milk output and increased the cow’s death rate.” (page 8)
In a 2004 lawsuit with Wisconsin Electric Power Co, a jury awarded a dairy farm $850,000 in damages. In one year, they lost 15-18 cows and calves to unknown sources, which was ultimately attributed to stray voltage. (page 9)
In 2002, a jury awarded a dairy farmer $700,000 in damages due to stray voltage from defendant Interstate Power Co.
High-end home pricing is very sensitive to proximity of high-voltage transmission lines; low-end homes are much less so. (page 12)
Utility funding bias alert: a 2007 study by Jennifer Pitts and Thomas Jackson (mentioned in Document 6!) was funded by a utility. It was rebutted by two California appraisers who disagreed with methodology and information omissions. (page 13)
Utility funding bias alert: the New England study by Chalmer-Vooraart, who are also both expert witnesses for utilities. (page 14)
Problems with farm equipment navigating around poles, stray voltage, and compacted soil from construction of HVTLs in fields – 3-5 years to restore to farming use (page 15)
The report goes on for pages about impacts to farming; which I will summarize in future posts. This post is about property values, though they are related. If the HVTL causes farming problems, it impacts the resale value.
In 2009 it was reported in the Montana Standard that property owners in Montana would be exempted from paying property taxes on land within 600 feet of either side of an HVTL right-of-way. (page 20). So the land is deemed worthless by the state?
 https://www.nhpr.org/north-country/2012-11-01/appraisal-triggers-latest-dispute-over-northern-pass#stream/0 Economic Impact Analysis and Review of the Proposed Northern Pass Transmission Project. Prepared for the State of New Hampshire Office of the Attorney General Counsel for the Public SEC Docket No. 2015-06. Page 59.