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Photo: David Chanatry.  The Maple Ride Wind Farm in Lewis County has had a positive effect on property values, unlike projects in other counties.
Photo: David Chanatry. The Maple Ride Wind Farm in Lewis County has had a positive effect on property values, unlike projects in other counties.

Study shows wind turbines have mixed affect on property values

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Wind power projects have been controversial in the North Country ever since the Maple Ridge Wind Farm started turning in Lewis County more than five years ago. One of the big questions remains: how do wind turbines affect the local economy?

Now a team of researchers at Clarkson University has some answers. Assistant professor Martin Heintzelman and PhD student Carrie Tuttle found that wind projects can depress property values by as much as 17-percent. But, they can also have a positive effect on real estate.

The researchers collected information about 10,000 property sales in three counties, including Lewis, between the years 2001 and 2009. They mapped the sales of these properties. They mapped all the wind turbines. And they considered every factor they could think of that might be a variable in the sales price: the size of the property, the house, whether it's in a village, what was happening with the general real estate market. Professor Heintzelman spoke with Julie Grant about what they found.

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Julie Grant
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Heintzelman said his study looked at how property values have been impacted by the relatively recent construction of wind turbines in Clinton, Franklin and Lewis counties.

"We found that in two of the three counties, in Clinton and Franklin, property values seemed to decline because of wind turbines. In Lewis county there was little effect," Heintzelman said. "If there was any effect at all, it was a positive effect.

"I think it's likely to be some combination of the way the turbines are situated in the landscape and local preferences amongst land owners" that determines the different impacts, Heintzelman said. 

"It clearly depends on your proximity to the turbines. So one thing I can point to in Clinton and Franklin counties, if you go from having turbine nowhere nearby to having a turbine within about a mile of your home, you are looking at 12 or 13 percent decline in property values. That number's going to depend on exactly how close you are to the turbines.

"So we have a range of results. Basically in Clinton and Franklin counties, around that 10 to 20 percent decline. In Lewis county most of our results show no effect and occasionally we do see a positive impact in some regions.

"So one possibility is that the setbacks might be such or the way that the turbines are situated might be such that they aren't impacting as many people or not impacting the people in the same way. It is also possible that socially, demographically or preference-wise the people in Lewis county might - and this is obviously a broad generality - it may be that they don't mind the turbines as much as people in other places. Or it may be that the way the compensation schemes are working in Lewis county, it may be working in a way that is compensating everyone, in which case you may see property values go down.

"It's a hard issue. For me personally, I've always found wind turbines sort of graceful on the horizon. I'm an environmental economist for a reason. I care about the environment and so I've used my default position that I like wind turbines. I like wind energy. It's a positive step. However, I live in Potsdam and there's new turbines being proposed for the Parishville/Hopkinton region and I have some friends who have not yet been approached to have a turbine on their land but some of their neighbors have. And so whether they like it or not they could potentially have turbines very close to them and it hits home at that point. That yes, there are impacts.

"What our analysis seems to suggest is that existing compensation schemes may not be sufficient. So right now you basically get compensated in two ways. If you are a land owner with a wind turbine on your land, you are getting paid directly, you are getting paid lease payments. And those payments, presumably are negotiated. So presumably, if I'm a landowner and I sign off on that, I think it's a good deal for me.

"Another mechanism is a pilot payment, payment in lieau of taxes that's made to the local communuties. The idea of that is to compensate the local communities for any impacts of the turbines. And so what may not be happening is that those payments may not be being transferred in a way that's compensating those people who don't have turbines on their land but are very close to people who do have turbines on their land. Those are the people who are most likely to be hurt and the existing compensation schemes may not be enough to compensate them. So we should think about ways to compensate those people who are being harmed."

Martin Heintzelman is an economics professor at Clarkson University. His study on wind turbines will be published in the peer reviewed Land Economics.

Heintzelman said more research needs to be done to help understand why wind projects affect property values differently in different communities.

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