Power lines vs. property values

About a mile from my house sits the local elementary school, and across the street on the south side of the campus is a long, straight block of homes with more than the usual number of for-sale signs.

The only thing that distinguishes this block from all other blocks around the school -- where there are few homes up for sale -- is that the backyards of these homes run up against a power-line corridor, and, oddly, in one place where the power line shifts direction, there is an empty lot next to the home where a tower stands.

When last I looked, this home was vacated and for sale, but the previous owners, who had lived there many years, figured why let that land around the tower go to waste and built a gazebo there, using the tower property as an extension of their own yard.

With the home vacant, the gazebo looked sad and unattended.

Anyway, it got me thinking about power lines and home values. In particular, does the former affect the latter?

I called Dr. Frank Voorvaart to get that answer. Voorvaart, who now works in the Dallas office of the Analysis Group, recently co-authored an article in The Appraisal Journal on exactly that subject.

His responses to my questions were a little surprising because he focused almost entirely on power-line visibility and property encumbrance. I was thinking most people wouldn't want to live near power lines because there was some health effect from the electric and magnetic fields, or EMF, that surround any electrical device -- especially something as imposing as a power line.

This has been a much-researched subject, and the National Research Council and National Institutes of Health report no strong evidence that EMF exposure poses a health risk. This isn't to say there are no doubters, and other studies have surfaced showing an association between household EMF and an increased risk of childhood leukemia.

Household EMF? That has to be weaker than power-line EMF, right?

Once again, I turn to the experts. The Connecticut Department of Public Health reports high-voltage lines can have EMF levels of 30 to 90 milligauss, or mG, underneath the wire. However, EMF levels decrease rapidly with distance from lines -- at 300 feet, EMF is essentially at standard, background levels.

In most cases, power lines running through or near residential areas have easements. The power line that runs through neighborhoods near where I live in Mesa, Ariz., is separated from the homes by a corridor, which for the most part look like park areas, although some of the ground is simply left in a natural state.

I'm assuming then that around this corridor and with others like it elsewhere around the country, EMF is, as they say, just at background levels and not much of a health concern. ...CONTINUED

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That brings us back to Dr. Voorvaart and the study, "High-Voltage Transmission Lines: Proximity, Visibility and Encumbrance Effects," which looked at 12,000 New England residences between 1998 and 2007.

The results of that study show a transmission-line easement adjoining a home's property had only a small, negative effect on the sale price, and there was no evidence of an overall, automatic decline in real estate values due to either proximity or visibility of transmission lines.

The official summation of the report is this: "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. 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."

Huh?

Truthfully, I'm not even sure what the paragraph means. I had to ask Voorvaart for an interpretation.

"People have this presumption that everywhere there are power lines it will affect property values," says Voorvaart. "That is not a true statement. Our main conclusion is that you have to look at each situation individually -- in some instances there is impact, in others not."

OK then, where was there an impact?

Of the four study areas scrutinized by Voorvaart and his partner for the report, one neighborhood where home prices were impacted by transmission lines was located in a hilly area and the homes here had a more pronounced view of the lines.

In other words, there wasn't a lot of natural screening. Apparently, the more glaring the view, the more likely it would be that the power lines would, indeed, affect home values.

Other than visibility, one other condition where power lines were likely to affect home values negatively related to the issue of encumbrance, or where the power-line easement usurped private property.

Oddly, Voorvaart once lived in Arizona and knew the power-line corridor through Mesa. Homes bordering the corridor, especially where it looked like parkland, didn't show lower home prices. For the homes near the elementary school, the backyards not only bumped into the power-line corridor but a utility relay station was constructed on the land beyond the corridor.

Here, a definite weakness on home prices occurred -- which could also be blamed on so many of the homes being on the market, which, in turn, could be blamed on the power lines. Whew!

The real issue for homebuyers, says Voorvaart, is where the presence of power lines stacks up in regard to all other factors concerning a home purchase. If the home is in a good neighborhood with good schools and the price is right, power-line location might be too far down on the list to make it a purchase-price factor.

Steve Bergsman is a freelance writer in Arizona and author of several books, including "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."

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