Power Lines and Property Values - One Doesn't Affect the Other

David Deem
714-997-3486

When it comes to searching for the right property, prospective homebuyers have a list of 'wants' and 'don't wants' of items they can't live without, and those they would rather not see in our around their home. Power lines are one feature that rarely appear on an owner's want list, as many people believe they will affect the value of the property. However, a recent article published in The Appraisal Journal's summer issue reports that a property's value is not affected when the home is located close to high-voltage transmission lines, or when those power lines are visible from the home.

"High-Voltage Transmission Lines: Proximity, Visibility, and Encumbrance Effects," by James A. Chalmers, PhD, and Frank A. Voorvaart, PhD, cites a study of 1,200 home sales in Massachusetts and Connecticut from 1998 to 2007. The study also found that a transmission line easement adjoining a home's property had only a small negative effect on the sale price.

"In the four study areas examined here, there is no evidence of systematic effects of either proximity or visibility of 345-kV (kilovolt) transmission lines on residential real estate values," the article states. "Encumbrance of the transmission line easement on adjoining properties does appear to have a consistent negative effect on value, although the statistical significance with which it is measured varies."

The authors note that researchers and appraisers may mistakenly attribute a negative price impact to proximity, while the true impact is associated with the transmission line easement.

"The professional literature cited, combined with the results reported here, support the position that a presumption of material negative effects of HVTLs (high-voltage transmission lines) on property values is not warranted," the article concludes.

For more information, visit www.appraisalinstitute.org.

DRE #01266522

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