Wind energy development and perceived real estate values in Ontario, Canada

ABSTRACT

This paper focuses on public concerns about real estate value loss in communities in the vicinity of wind turbines. There are some conflicting results in recent academic and non-academic literatures on the issue of property values in general—yet little has been studied about how residents near turbines view the value of their own properties. Using both face-to-face interviews (n = 26) and community survey results (n = 152) from two adjacent communities, this exploratory mixed-method study contextualizes perceived property value loss. Interview results suggest a potential connection between perceived property value loss and actual property value loss, whereby assumed property degradation from turbines seem to lower both asking and selling prices. This idea is reinforced by regression results which suggest that felt property value loss is predicted by health concerns, visual annoyances and community-based variables. Overall, the findings point to the need for greater attention to micro-level local, and interconnected impacts of wind energy development.

Discussion and Conclusion

The goal of this research was to understand the determinants and contingencies of perceived property value loss due to wind turbines in two Ontario, Canada communities. In part because most (quantitative) studies have led to inconclusive or contradictory results that are limited for understanding the nuances of home sale decisions, we demonstrate that combining interview and survey-based research is beneficial for studying the complexities of wind energy impacts. 

Our focus on two distinct yet socio-economically similar communities suggests that differentiated results in terms of perceptions of real estate values and their predictors are at least partly from social processes of amplification (higher perceived loss) and attenuation (lower perceived loss). This idea is embedded within the risk perception literature which suggests that local impacts are intimately shaped by the social and cultural contexts in which they are experienced [45,81]. This explains why concerns relating to community and health impacts [16,33] appear as more important than phenomena we might normally expect like housing characteristics [12].

As expected, the effect of turbines being visually unappealing is statistically significant and this reaffirms that this variable should continue to be used in more traditional property value studies that use hedonic price modeling.

A major finding from this research is that turbine-related real estate loss is perceived to already have occurred for some residents in both communities. While only 9% of residents believe their property in Port Burwell has lost value, this number was more than 34% in Clear Creek. Even if turbines do not cause property value loss for the majority, this perception by local residents that they do is relevant in terms of asking and selling prices and overall mitigation of negative impacts. First, that people seem to be selling at a loss is corroborated by a small study conducted on the sale of seven properties in Clear Creek by Lansink [42]. Second, though most valuation studies find no effect, as Thomas and Thomas [85] explain a simple fact of human action, “if men define a situation as real, it is real in its consequences”. What is more, the defining of “real” is not necessarily confined to the minds of the victims of property value loss. Our community-based differences suggest that social and other processes are at work to contribute to these perceptions. This may particularly be the case in the study of real estate prices in general—an area where local externalities make localized valuation very complex [86].

Despite different community experiences, a total of 32% agree with the statement that turbines do lower values—with 25% and 42% making up the subsamples of Port Burwell and Clear Creek respectively. While it is difficult to tease out whether turbines do or do not cause real estate value loss for individuals our results do share similarities with select existing work based on localized valuation in the Ontario context. The reports in the province and elsewhere that suggest turbines are affecting among other things, rural property values of particular homes [13,42,41] is entirely consonant with the aggregate level findings that suggest on average turbines do not lower property values [12,26,28,29,]. Though some of the better hedonic studies do provide distance measures as fine as ½ mile, negative impacts may simply be happening in certain communities [11] or at different scales. This may be as much socially defined as it is spatially defined in close proximity to turbines. 

Suggesting that turbines categorically do not cause property value losses is as problematic as blaming the victim. Indeed though Vyn and McCullough [26] find no significant effect at an aggregate level in their study of 7000 home sales in Melanchthon, ON, they admit “this does not preclude any negative effects from occurring on individual properties” and that their large standard errors suggests this may be the case. Next, the interplay between local and wider contexts in which turbines are built provides important clues. This would explain for example, why health effects remain significant in our final model of perceived property value loss in a province where such impacts hold sway in environmental assessment and property value loss does not. In fact, in the Ontario context, health effects are one of only two ‘viable’ reasons for objection to wind projects—the other being serious and irreversible environmental harms [16]. This is consistent with those who suggest that policy and implementation can shape public responses to potentially hazardous development [45,87,88].