Property Valuation

Would You Buy A House Inside A Factory?

Property Values May Fall By 50% Or More


A Wind Factory as currently proposed in Monroe County, IL by Joe Koppeis’ Southern Illinois Wind LLC, and his partner NorthRenew Energy will no doubt have impacts on the local economy. These impacts will take many forms: loss in neighboring property valuations, short term increases in tax revenues to the state and county, short term increases to local school funding, short term construction jobs, and long term damages to the landscape, wildlife and possible damage to the health of our neighbors.

Large-scale industrial wind factory projects hurt property values. Studies in both the United States and abroad have shown that proximity to wind turbines lowers property values on residential properties and lots intended for development.

Carl Phillips, in his PhD dissertation at Harvard’s School of Public Policy explains. The value of a piece of real estate is what someone is willing to pay for it. More specifically it is what the person (or family or entity) who values it second-most would pay for it. The person who values it most would have to pay one dollar more than that to purchase it. Anything that causes the person in the second position to value the property less, therefore, lowers the value. For many the audible noise or visual impact lowers the value somewhat. If the second-most person falls in either category, the value will be lower. There is no reason to believe that anyone prefers to be near an Industrial Wind Turbine, so there is no chance that person would like the property more.

Many people are aware of potential health effects of Industrial-Scale Wind Turbines and thus will value a property far less if it is near an installation. Moreover, even someone not concerned about their own health risks or unmoved by aesthetic impact knows that other people are. Thus, he will know that the potential resale value is lower, and since that directly contributes to the value, this will tend to push down the value even for a potential buyer willing to live within or near an industrial-scale turbine installation.

There is simply no question that industrial scale wind turbines lower the value of nearby property. The only legitimate question is “how much” not “does it occur.”


A study by Clarkson University, New York (2011), found that value losses as high as 40% one-tenth of a mile from turbines to 20% up to 3 miles from turbines occurred.

Michael McCann, CRA, of Chicago-based McCann Appraisal LLC, conducted an appraisal in Michigan prior to the approval of Lake Winds Project in Mason County. In an appraisal done in June 2011, all comparable sales were considered, and the subject property was appraised at $190,000. Market increases of an average of 9% gave a sale value appraisal of $207,000 in June 2012. With a typical Sale List-Price ratio of 95%, the list price should have been $217,000 to allow for negotiations to bring actual sale price to be $207,000. However, in the interim, industrial-scale wind turbines were installed within ¼ mile of the property. Local realtors listed the price at $169,000 and it was sold at $159,000, a 23% loss of value. Further research by McCann yielded information that led to his statement, “Residential properties within up to two miles have a range of 25%-40% value loss.”

Lansink Appraisals and Consulting, Ontario, Canada studied the change in value of five dwelling properties after the installation of wind turbines nearby:

ID 15797 -48.27%

ID 15798 -58.50%

ID 15799 -23.24%

ID 15800 -26.66%

ID 16339 -37.30%

Median Loss 37.30%

Average Loss 38.81%

In 2013 the Ontario Superior Court determined that landowners near wind farms do suffer from lower values. The court accepted a 22%-55% reduction range.

References:

Clemente, Jude. 2015 Do Wind Turbines Lower Property Values? Forbes, Sept. 23, 2011.

Illinois State Board of Education: Evidence-Based Funding.

Kraft, J.M., 2015. Boone County Votes for Increased Wind Turbine Setbacks Based on Property Lines. Edgar County Watchdogs, November 18 2015.

Pierpont, Nina. Wind Turbine Syndrome, Executive Summary.

What About Tax Income For Our County?

According to Carl Wuertz, our Monroe County Assessor, the 2017 property tax rate on each turbine annually would be approximately $37,000. The tax assessment is set by state law and is based on the manufacturer’s stamped output of the turbine. Mr. Koppeis has proposed 4.2 Mw turbines.

These taxes must be paid whether or not the turbines are producing energy. Illinois law mandates a 4% per year depreciation for the turbines, thus lowering the property tax income by roughly half in 12 years. The county assessor also stated that if, for any reason, the company stops paying those taxes, the lessor-landowner will bear responsibility for payment, as it is a structure on that person’s property.

The additional property tax revenues from wind turbines for our local school districts is a complex and complicated issue. State education cost planning tries to see that schools receive a certain amount of funding per student. In general local real estate taxes provide about 67% of the specified funding level and the state tries to fund the remainder. If local taxes provide another 10%, the state would then lower its share. School districts where turbines are located would see an initial increase in local funding for the first year. According to current state law, after the first year, the State might lower its contribution to those school districts. The impact of the depreciation rate on each wind turbine will also have to be considered in causing a loss in expected distributions to the local schools. Impacted local School Boards have not yet studied the effects the installation of a wind factory would have on their school districts or the loss of neighboring property values and those effects on school funding. Another item that would need to be evaluated is if the state would then change their Tier Status. Tier level is dictated by the State and this determines a district need for additional funding. Additional local tax revenue may cause a loss in the amount the state of Illinois contributes based on Evidence-Based Funding. Evidence Based Funding was passed in the state of Illinois to provide extra resources (money) to School districts with Illinois’ most under-resourced students.

County Commissioner Jane Harper of Tipton County, Indiana, made this statement regarding wind turbines in her county: “Property values within a mile of the turbines will decrease. It may not show in assessed value, but the stark reality is that the pool of people interested in a home close to turbines is far less than in homes far away.” The county revised its setback ordinance to 2640 feet in response. And regarding jobs she stated, “No one in our county was qualified for the permanent jobs, and the temporary jobs were given to union workers fifty miles away.” The above, along with her comments on noise and shadow flicker in homes, was part of her apology to the people of the county for her supporting and encouraging the wind farm in question.

Act Now & Contact Us

Send us a message and let your voice be heard.