Whipping up fear about wind farms: The property value stigma

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New report claiming wind farms damage property prices uses limited research and inscrutable evidence to ensure fear and uncertainty linger unchallenged.

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You have three apples on your kitchen counter, nestled amongst various other fruit. Two are red, and one is green. Can we safely conclude that 66% of all apples are red? If you answered yes, then you’ll relish this article in the Australian Financial Review:

“Rural landholders across Australia may face a disappearing pool of buyers and plummeting values of up to 60 per cent because of neighbouring wind farms, a new, independent report has established.”

The article references a mysterious report, which seems impossible to find anywhere online. I asked the author of the article where the report is published, but haven’t had a response. Reports that claim to demonstrate a reduction in property values from wind farms crop up a few times a year, and they invariably feature strong conclusions drawn from extremely weak evidence.

The last report was referenced in a Daily Telegraph article in February this year – published by the clandestine ‘Wind Burst Publishing’. A quick check on the PDF properties of that report showed that it was created by Susan Richmond, secretary to Peter Mitchell, once head of the Landscape Guardians and now chairman of the pointedly anti-wind ‘Waubra Foundation’.

This new report, commissioned by farmer Paul Vallely (on the Community Consultative Committee for the Golspie Wind Farm development) and published by registered valuer Peter Reardon purports to show two properties that suffered value losses of 30% and 60%, and a third property that showed no change in value. The author attributes the losses on these two properties directly to the presence of the Cullerin Range and Capital* wind farms, based on comparisons to ‘four or five’ equivalent properties, bringing the total sample to between 13 and 15 (presumably). There is no information on how these properties were chosen, or discussion of other factors that might have impacted the variation in price for the two properties that saw a reduction in sale value.

Screen Shot 2013-10-15 at 12.31.13 PM
By shifting the weight of discourse towards emotion rather than analysis, the capacity to detect the flaws in weak evidence is diminished. Websites devoted to invoking an emotional response facilitate this. Source: windturbinepropertyloss.org

The only other information I found was from a media release from the ‘Australian Industrial Wind Turbine Awareness Network’, a group that seems comprised solely of a wind farm opponent near Flyer’s Creek. The author seems to imply Reardon believes wind turbines are some sort of disease: “In the report, Mr. Reardon says a plague of more than 3,000 turbines are either in  operation or proposed for construction across country New South Wales”.

The AFR article does mention a report published by the NSW valuer general in 2009, by the firm Preston Rowe Paterson (PRP), which could find no evidence of a link between the presence of wind farms and a decrease in property values. Looking at eight wind farms and 45 sales, the firm found 40 of these showed no reduction in value (It’s worth noting the report states their findings are limited).

In a 2013 presentation for the Coopers Gap Wind Farm Community Consultative Committee, PRP also highlighted some new research that has emerged regarding wind farms and property values – Hoen and Wise examined 7,500 sales, Hinman studied 3,581 transactions over nine years, and Carter studied 1,298 sales over 13 years. None of these found any statistically significant effect on property values. Additionally, Magnusson and Gittell found in 2012, after looking at 2,065 residential transactions, that wind farms have no discernible impact on property values.

These studies seem tiny in comparison to a recent report published by the Lawrence Berkeley National Laboratory in August this year, which examined 51,276 sales – a sample of transactions 3,400 times bigger than the sample instanced in the AFR article. The researchers performed spatial hedonic analysis on properties surrounding wind farms in the US, and found that “Regardless of model specification, we find no statistical evidence that home values near turbines were affected in the post-construction or post-announcement/pre-construction periods”.

Sample size is important, yet it seems to have been poorly considered in the AFR’s story. To illustrate this further, here’s a graphical representation of the different samples used in the studies cited:

The larger our sample, the greater ability we have to separate the signal from the noise. When our sample is tiny, and there is no information provided on whether that sample is randomised or specifically selected, it’s safe to say the evidence is nowhere near as strong as evidence that utilises a large sample, controls for variables, and importantly, is available publicly to be scrutinised.

Weighing evidence is an important component in understanding how wind farms impact property values

Understanding the importance of scientific analysis comes into stark relief when we consider the impact of fear and uncertainty on wind farm developments, and the communities that surround them. Mentioned often in the research covering this issue is a phenomenon known as ‘Anticipation Stigma’. Hinman writes in her 2010 study:

“Wind farm anticipation stigma theory is a concern surrounding a proposed or approved wind farm project that is primarily due to factors stemming from a fear of the unknown: a general uncertainty surrounding a wind farm  project regarding the aesthetic impacts on the landscape, the actual noise impacts from the wind turbines, and just how disruptive the wind farm will actually be.”

The level of public support for wind energy can sometimes drop during the planning process, but quickly rebounds once the wind farm begins operation. Source: Berkeley Lab Presentation

If one wanted to reliably catalyse the stigmatisation of wind energy during the development process, spreading fear and uncertainty around the impact of wind farms on property values would be a good place to start. Basing this on small sample sizes and secretive, inscrutable reports ensures that fear and uncertainty will linger in the air, unchallenged. The farmer who commissioned the inscrutable report states that “Word should get out that they do have a detriment on value”.

Making an assertion about the impact of wind farms on property values requires careful consideration, strong evidence and robust review. If the need to carefully correct for error and bias in research is neglected, those pushing to ‘get the word out’ on wind farms risk causing the very problems they seek to avoid.

Ketan Joshi is a Research and Communications Officer at Infigen Energy, interested in scientific, technical and community issues surrounding renewable energy development. The views expressed above are his own, and not those of his employer.

*Capital Wind Farm is owned and operated by Infigen Energy

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19 Comments
  1. Sean 5 years ago

    “Rural landholders across Australia may…”
    may…
    May be considered idiots if they blindly accept information from Landscape Guardians.

    The whole prospect seems silly. People don’t buy large farms for their aesthetic appeal, and you wont see a bank accepting it as collateral. Prices are based on what the land can produce. Finding another way to increase production without detrimental effects to other income streams is a good thing.

    The only logical reason for a property to reduce in value when a wind farm moves in next door is from potential reduction in wind that could be harvested from the neighbouring property.

  2. Keith 5 years ago

    Where other than in the nutty world of demonising wind turbines could a study on a sample of 15 (giving the desired result) be taken seriously in comparison with studies involving a sample size of 65,765 which showed no effect?

    Shame on the AFR.

  3. Mike Barnard 5 years ago

    Wind farms don’t harm property values: six major studies in the US and UK of almost 100,000 property transactions confirm this. As with health complaints, anti-wind campaigners whipping up fears are responsible for minor lulls before wind farms become operational, with properties often accruing value faster near operational wind farms. This makes sense: more jobs and more tax-revenue funded services make wind farm regions more attractive to people. http://barnardonwind.com/2013/02/19/property-values-evidence-is-that-if-wind-farms-do-impact-them-its-positively/

    • George Papadopoulos 5 years ago

      “with properties often accruing value faster near operational wind farms”
      Yes of course Mike. There is a new religious fashion that dictates that its followers must buy properties around wind farms in order to protect them from the “anti-wind, coal miner infidels”…
      Now any offers for my property? There is plenty of low frequency noise 35km away from the local wind farm, and if one real desires a view, just chop down the native woody weeds, 20m tall, that profane the sacred view of the spinning monstrosities…

  4. Ketan Joshi 5 years ago

    Just a quick update via an article in the Fifth Estate:
    http://www.thefifthestate.com.au/archives/55916/

    “Mr Reardon told The Fifth Estate that the two properties where there was a decrease in value of 33 per cent and 60 per cent (compared with comparative land sales) were small “lifestyle properties” with no houses built on them.”

    It’s interesting to note that the two properties that were claimed to have seen lost value do not have residences on them, considering that the claim of lost value is often related to noise or health complaints residing in proximity to wind farms, rather than visual impact.

    You may notice in the comments of that link Paul Vallely claiming that all other research is regarded ‘invalid’ as it is commissioned by wind farm proponents. Of the studies I cite above, only one is commissioned by a wind energy company (Magnusson & Gittell). All the others are completely independent of the wind industry and vested interests.

  5. Chris Fraser 5 years ago

    I’d love a farm next to a turbine (i still need a convenient open field where i can charge my phone)

  6. Sarah D 5 years ago

    The ‘no brainer’ referred to in that AFR article must surely be that Reardon’s comments and conclusions are just baseless assumptions. So much fallaciousness in such a small column space! Little wonder if there appears to be a reluctance by Reardon to show any of the evidence that his ‘dossier’ is purportedly based on.

  7. George Papadopoulos 5 years ago

    Wow, some very defensive comments to this article.
    But did anyone notice that the “credible” studies cited by Ketan didn’t look at specific subsets of property values? I mean those properties in the immediate surrounds of wind farms that aren’t earning an income for hosting wind turbines?

    • Sarah D 5 years ago

      No, George, you appear to be missing the point (or maybe you’re simply hoping to divert people’s attention from the basic truths here). Without sharing the contents of his apparently secret dossier, and without knowing what data Reardon has drawn from to produce that dossier, I myself can accept his conclusions as nothing more than just opinions. Others have highlighted the sample size as invalid or insignificant but you’re anyway choosing to ignore that too.

      George, I’m over in the UK at present, and find that one of my former abodes here now has stunning views of the London Array wind farm, and properties are selling for $1m plus, well above similar nearby properties without the view. But you’d be quick to tell me that it’s not the wind farm that’s increased the property values of where I once lived, wouldn’t you……..because on the basis of the information I’m providing you with, it really amounts to nothing more than my own opinion.

      • George Papadopoulos 5 years ago

        Sarah my comment was on the article whereas your comment appears more a distraction. So let’s get “distracted”…
        If I understand your story correctly, unlike Australia, Britain must be home to some very interesting people. Now how far away is this London Array wind farm? 20km away? or 1km away?
        And by the way the Reardon report is looking at case studies. What is so secretive about his data?

        • Sarah D 5 years ago

          My apologies, George – I was attempting to simplify things for you by giving an easy-to-comprehend illustration; it’s merely an example of one reason why Reardon’s conclusions can’t be considered as anything more than just an opinion.

          Have you tracked down this elusive Reardon report, George? Happy to review my position on this if something of substance can be found.

          • George Papadopoulos 5 years ago

            Sarah, I don’ feel confounded at all. Rather I am surprised that you would think that studies that look at 16km radius have any relevance to property values 1-2km or so from wind turbines…

            Now do you have any answers to my question above:

            “If I understand your story correctly, unlike Australia, Britain must be home to some very interesting people. Now how far away is this London Array wind farm? 20km away? or 1km away?”

            And for the “secretive” nature of the report here is a comment from the Conversation website http://www.thefifthestate.com.au/archives/55916/comment-page-1/#comment-9064:

            “Paul VallelyOctober 14th, 2013 at 11:21 pm 6 I am the ‘farmer’ who commissioned the report. Until the report was completed, I was indifferent to wind farm projects. While only three properties were suitable for value comparisons at this stage, two of the three showed significant devaluations. We are not suggesting this is the norm, however, it does show that property prices can be devalued due to windfarm projects. I might add that previous reports were regarded as invalid as they were commissioned by wind farm proponents or others with a vested commercial interest. The VG’s report was too broad scoping, however, did acknowledge the possibility of price devaluations. We have asked that property prices continue to be monitored. I am happy to provide a copy of the report to anyone by emailing me (no charge).”
            I have a copy of the document myself if you could politely provide me with your e-mail address…

          • Sarah D 5 years ago

            George, are you just being a card…..or are you genuinely quite missing the point? You’re (perhaps unwittingly) actually reinforcing the very case I was making.

            A clue was in the sentence, where I said “on the basis of the information I’m providing you with, it really amounts to nothing more than my own opinion.” My illustrative point was that there is no study re the London Array, there is no evidence re property prices there, and my advice to you was that you – or anyone else – would be unwise to take my comment as anything other than an unsubstantiated opinion. In a similar vein, Reardon’s comments, without the necessary strength of evidence, remain just opinion.

            It follows then that the studies you ask me for details of are purely an invention of your own imagination. Maybe we’re speaking two different languages here, but most others will recognise that your question has been addressed. A dog chasing its tail can be a tiresome exercise to watch.

            I must continue with my holiday now but yes, if anyone would like to provide me with an email address to which I can politely provide mine then I would be interested to read the report on my return to AU.

          • George Papadopoulos 5 years ago

            Sarah, I understand, given your divertive response, that you have no intention to answer my question: “Now how far away is this London Array wind farm? 20km away? or 1km away?”
            If you wish to get my e-mail address, ask Simon Chapman – he has it – I prefer not to post my e-mail on websites. Though given that Chapman seems to be running a good intelligence gathering operation for the wind industry, it is highly likely he may have already have a copy of the not so secretive Reardon report.

  8. JA R 5 years ago

    Firstly let
    me remind people that Ketan Joshi on journalisnet.net wrote in December 2012 the
    ‘Senate Committee looking into the health issues surrounding wind farms found,
    again “there is no evidence to suggest that inaudible infrasound, either from
    wind turbines or other sources, is creating health problems”.’ However, he
    failed to mention the list of Recommendations emanating from the committee’s
    findings for research into the health issues and acoustics of wind turbines.

    Again
    misinforming us, in a response to a comment of this current paper he states
    only one cited paper was commissioned by a wind farm company, if looking only at
    company involvement then he could be right, but what about the Heon, Wiser
    paper which was funded by the Office of Energy Efficiency & Renewable
    Energy, could there not be a perceived bias.

    Also the
    final comment in the Hinman paper cited says ‘Currently, the severe lack of
    statistical rigor, unbiasedness, and reliable methodologies across the wind
    farm proximity and property value studies cannot allow any general conclusions
    to be made—only site-specific findings.’ Surely an indication that caution
    needs to be taken when considering assessment of possible effects.

    While he is
    criticising the Peter Reardon work, he fails to acknowledge there are
    differences in the type of research being undertaken, there are differences
    between uses of land, size of the land, location to turbines and cities. Reardon also acknowledges that when he was
    first commissioned to undertake this work for a number of landholders in the
    district his findings were inconclusive. However, when changes began to occur
    he was asked to again look at it, and his current report is the result.

    Rather than
    looking at one or two properties, he researched broadly taking into account
    Real Estate Agents concerns and records, he noted impact of the GFC, he noted
    how the demography was changing as large land areas are being subdivided into
    rural lifestyle properties of varying size to accommodate people wanting to
    live further out of Canberra and Sydney.
    These and other considerations such as how Industrial Wind Energy companies
    are now recognising the problem of reduced land values and are offering
    compensation to close neighbours to turbines, and in one district there is a
    court order for the company to purchase small residential and grazing properties
    with 1km of turbines, at market value plus compensation. He also reports that this company is
    intending to re-sell the properties once the turbines are operating, and notes
    that the re-sale of these properties may be an indication of changes to the
    value of them.

    But more
    than anything he is trying to diminish the importance of value of a farmers
    land, the asset which is used by Banks to provide loans, the asset which allows
    them to provide for their family, and ours, the asset value of for some is a
    family home and business that has stood the test of time.

    He also
    diminishes the asset value of a home that someone has chosen as a place of refuge,
    a place where they can live their life in peace away from the hustle and bustle
    of the city in an environment of their choice.

    Mr Joshi’s
    condemnation of this report here is his usual nit-picking of the work of another
    person’s simply to try and discredit it, thus helping his employer Infigen and
    the rest of the industry and its supporters.

  9. Grant Winberg 5 years ago

    No-one wants to advertise the fact that THEIR property has fallen in value. Ketan Joshi refers to the Valuer-General saying there is no link between prospective wind farms and land values (unimproved capital value – not houses, sheds dams, cash flows, etc). Well, I wrote to the Valuer-General asking for a detailed response as to valuation procedures, etc including whether wind farm proximity had a bearing. The written response was full but generic and, in response to the wind farm component, they included a copy of the newspaper article regarding the court cases in Australia where wind farm proximity had been included in the court’s decision involving land value (supporting the Reardon findings). Ketan Joshi will know all of this. Further, our small holding was V-G UCV valued in 2010 at $302,000. In 2012 it was valued at $287,000. We have a boundary 1.8kms from nearest proposed Crookwell 3 (Union Fenosa, not Infigen) wind turbine. Not a large fall. Perhaps the NSW Govt. can lean on the V-G to increase our valuation as soon as the Crookwell 3 proposal is approved by the Planning Commission. In fact Ketan Joshi might feel inclined to brief a consultant to prepare V-G valuation trendlines over the last five for all properties neighbouring all existing, approved and proposed wind farms. AND publish the detailed results.
    This comment has avoided property sale values and difficulty in selling – leaving this for others more expert in that area.

    • Ketan Joshi 5 years ago

      Hi Grant,

      The study commissioned by the Valuer-General, and performed by PRP, could find no evidence of a link, but did not state equivocally that there was no link. As I mentioned in the piece, the firm went to great lengths in their report, linked above, to make it clear their conclusions were limited by the small sample of sales they could analyse.

      The studies in the US use a much larger sample, and consequently can make much strong conclusions.

      I understand property value changes are complex, and many different factors affect changes in value. That’s why we ought to be careful when we say that two sales are enough to ‘prove’ that wind farms cause ‘60%’ reductions in value.

  10. Gary 5 years ago

    I found a copy of the report:

    http://www.windaction.org/posts/38792-the-impact-of-wind-turbine-developments-on-surrounding-rural-land-values-in-the-southern-tablelands-n-s-w#.UmSaTxO4bIU

    You can see from the graphs on pages 21, 24 that the property values he compared vary very widely between the non-wind farm properties – so it is obvious there are many other factors at play.

    • Sarah D 5 years ago

      Thanks for providing the link, Gary. At a first read-through, it looks like Ketan’s article has ably captured the shortcomings of this report, and others of that ilk.

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