Power Lines and Property Values

An article in the Wall Street Journal (Aug. 15, 2018) points to a recent study in the Journal of Real Estate Research:
1. Vacant lots adjacent to high-voltage transmission lines sell for 45% less than equivalent lots not located near transmission lines.
2. Non-adjacent lots still located within 1,000 feet of transmission lines sell at a discount of 18%.
3. Assuming a market where land represents 20% of a home’s overall value, the 45% decrease translates to a drop in total property value of around 9%.
These results were obtained from a recent study in the Journal of Real Estate Research by College of Charleston assistant professors Chris Mothorpe and David Wyman.
According to Prof. Mothorpe the three main factors that influence the lower price :
1. Health concerns associated with proximity to high-voltage lines (though, as the authors note, researchers have not established solid links between proximity to power lines and health issues)
2. The unattractive views

3. The humming sound they produce ( for properties very close to the lines)

Link to the article:

https://www.wsj.com/articles/the-electrifying-factor-affecting-your-propertys-value-1534343506

Study published in the Journal of Real Estate Research:

The Pricing of Power Lines: A Geospatial Approach to Measuring Residential Property Values

The valuation of power lines is a complex phenomenon. Using a sample of 5,455 vacant lots sold in Pickens County, South Carolina, we uncover substantive pricing discounts of 44.9% for properties adjacent to power lines, and a pricing discount of 17.9% for non-adjacent vacant properties up to 1,000 feet away from the power lines. Applying four different geospatial approaches—buffer zones, straight line distance, viewshed analysis, and tower visibility—we find that high-voltage transmission line (HVTL) pricing models should account for both proximity and visibility to reflect location-specific variations in pricing.http://aresjournals.org/doi/abs/10.5555/0896-5803.40.1.121?code=ares-site

© 2018 The American Real Estate Society

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