Economic theory suggests that the value of environmental amenities, such as open space and public land preservation, will be captured in the price of land. Any observed changes in these amenities will ultimately change the local property values. For example, if local government decides to purchase land for open space, the value of nearby homes would increase. If, on the other hand, a project is perceived to reduce the natural beauty of a region, such as Cape Cod, property values are likely to fall. That’s the essence of a presentation delivered by David G. Tuerck, Executive Director, BHI to the International Right of Way Assocation (IRWA) in Philadelphia in June.

More than 200 people attended the discussion seeking to learn how economics applies to the many professions that fall under the umbrella of the IRWA. A professional organization, IRWA draws its members from a variety of disciplines that negotiate and appraise right of way issues with local governments and utilities among other entities. BHI was invited to attend the conference based on its widely recognized work on wind energy.

In the panel discussion titled “Wind Farm Valuation,” Tuerck highlighted the results of a BHI study on a proposed wind farm for Nantucket Sound. In the summer of 2003, BHI commissioned a survey of 501 homeowners in the six communities most likely to be affected by the windmill project. Two thirds of home owners said that the project would worsen the view of Nantucket Sound “slightly” or “a lot.” On average, they expect the project to reduce property values by 4.0%. Households with waterfront property believe that their property will lose 10.9% of its value. These numbers are consistent with the findings of a separate survey of 45 realtors, who estimated that property values would fall by an average of 4.6%. The final report was sent to the U.S. Army Corps of Engineers this past spring.

Format revised on 30-Aug-2004 3:21 PM