property stigma - just the latest fashion wind ... -...
TRANSCRIPT
Dep
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Property Stigma - Just the Latest FashionWind Farms & House Prices in the UK
Sally Sims and Peter Dent Sep 2007
Research Funded By
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ComplaintsComplaintsDamaging countryside (AONB)
Visually intrusive
NoisyFlicker from blades
UnreliableWind speed has to be 20mph+ to generate electricityResults in a 25-30% efficiency level
Uneconomical Costly to produceCampaigning groups claims -Up to 30yrs to pay for itself + annual maintenance. intermittant
Reduce property values
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Study 1Study 1
Aim:- To determine the likely impact on house value
Hypothetical valuation
Analysis of transaction data
Planning permission objections
Estate Agents experience of marketing property in case study location =Visual impact
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Perceived impact on house pricesRICS Members Hypothetical Valuation
Property 1: Unencumbered Value £595,000Perceived Impact of a Wind Farm on Houes Values
0
2
4
6
8
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18
20
0% 1-5% 6-10% 11-15% 16-20% 21-25% 26-30% 31-35%
%
Num
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Cornwall (South West UK)Cornwall (South West UK)
Wind farm
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Tot al
£0
£100,000
£200,000
£300,000
£400,000
£500,000
£600,000
£700,000
£800,000
£900,000
Tot al
Type DET Tenure F
Average of Adj Pr ice
Post code
Drop Series Fields Here
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Real impact on Value: Real impact on Value: Transaction Data AnalysisTransaction Data Analysis
Regression Analysis.Variables = £ transaction price
• House type• Distance from wind farm • Geographical location
Significant reduction in value.Relationship not linear
Mean value = (case v control)Terraced house within 1mile = 54% lower Semi detached house within 1mile = 35% lowerNo Detached homes within 1mile - overall no impact observed
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Reason for DiminutionReason for Diminution
Planning objectionsBears Down
• 16 letters from residents in the location of wind farm• 115 rest of Cornwall• 160 rest of England• 33 Scotland• 12 Wales
Estate Agent interviewsreduction in value due to specific market conditions- not wind farms
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Initial ConclusionsInitial ConclusionsReal v Perceived = impact appear similar- but…
Marketing Agents do not attribute diminution to wind farms
Wind farm sites carefully chosen?
Possible impact on a few houses?
More detailed data needed
More research
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Focused study Focused study -------------- St St EvalEval CornwallCornwall
Wind farm
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AnalysisAnalysis326 houses on estate
Data on 201 transactions• Semi-detached = 132 • Terraced = 69
Wind farm turbine height = 60m
Scenic Vista• houses, • playing field, • countryside, • countryside and sea.
Residents stated ‘No aural impacts’
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Regression AnalysisRegression Analysis
R2 .470
Unstandardized
Coefficients t Sig.
B (Constant)
30674.401 3.600 .000
semi 7355.794 2.089 .038
Number of beds 36409.670 9.205 .000
Front view of countryside -22261.528 -2.942 .004
Rear view of countrside 20109.055 2.515 .013
Rear view of countryside and sea in distance
-26600.369 -4.734 .000
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FindingsFindingsNo statistical relationship between value and wind farm.
No aural impact.
Possible Reasons?Agents
• Buyers not concerned• Only 1 example of concerned buyer - not in study area
Surveyors • Demand for property in Cornwall very high• wind farm has no impact on demand or value
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WindfarmWindfarm ResearchResearch
Author (Year) Location Method Test Results
Jordal-Jorgensen (1996) Denmark Hedonic Area Stigma $
Sterzinger et al (2003) 10 US cities Simple Area Stigma S
Poletti (2005) Wisconsin Simple Area Stigma nc
Delacy (2005) Washington Paired Sales Area Stigma nc
Sims & Dent (2006) U.K. Hedonic Area Stigma $ / nc
Hoen (2006) New York Hedonic Area Stigma / Scenic Vista Stigma nc
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Poor Average Premium
Below Average
Above Average
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Minor Moderate Extreme
Substantial
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Issues around Issues around WindfarmWindfarm ProposalsProposals
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LBNL StudyLBNL Study
1. Area Stigma: Concerns over ‘industrialisation’ of area leading to decreases in tourism and second home desirability
No one will move here!
2. Scenic Vista Stigma: Concerns for decreases in quality of scenic vistas from homes
It will ruin my view!
3. Nuisance & Health Effects:Potential health/well being concerns of nearby residents
I won’t be able to live in my home!
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Opposition ThemesOpposition Themes
Sacrifice and disempowerment – loss of place-based local valuesLack of trust in government, regulatory bodies and windfarm developers – creating artificial commercial environment for quick profitsLanguage of war, conflict and defence – ‘us’ and ‘them’Foreignness – ‘matter out of place’Industrialisation of the environment – destroying areas of beauty.
Ellis, Barry, Robinson 2006
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Measurement ProblemMeasurement Problem
‘…the magnitude of size of windfarm elements, and the distance between them and the viewer, are basic physical measures that affect visibility, but the real issue is human perception of visual effects, and that is not simply a function of size or distance.’
University of Newcastle 2002
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Market ContradictionsMarket Contradictions
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Penlan Fach, Mydroilyn
Asking Price: £ 390,000
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Community BenefitsCommunity Benefits
Scoraig Primary School
Cost
• Total Installation: £ 46,000
• SCHRI Grant: £13,088
Key Points
• Estimated fuel savings £770 per year;
• Estimated annual CO2savings: Approx. 5 tons
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Cost
• Total cost of the hall including heating system and turbine: £ 280,000
• HICEC/SCHRI Grant: £26,371
Key Points
• Further reducing the annual electricity bill by 4.5p/kWh
Leac A Li – Bays of Harris Community Centre Wind
Turbine
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Confrontational or Complementary?Confrontational or Complementary?
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SummarySummary
There is no clear evidence that values are affected in the long term by wind turbines.Closeness and visual impact are the critical variables.Wind farm proposals can effectively blight an area in the short term.Market demand will often decline but not necessarily price.Price impact will be dependent on significant price determinants.Community benefits can play an important part in any proposal.
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Further Research Further Research
Influence of visibility and noiseAssessment of visibility and noiseVisual and aural impact assessmentEffects of distanceReceptor sensitivityMagnitude and significance