Kokomo Tribune; Kokomo, Indiana

Local News

March 17, 2013

Wind farm property impact hard to define

Expert says buyers may be harder to come by

— When the residents of DeKalb County, Ill., approved 115 wind turbines in 2009, they insisted on a property value guarantee from the developers, FPL Energy Illinois Wind, LLC.

In the event property owners there can’t sell their homes for the appraised value, the wind energy company will provide the difference between the sale price and the appraised value at closing.

The guarantee is almost unique among wind farm projects, and nothing of the sort has been seriously considered as part of Tipton County’s negotiations over the Prairie Breeze Wind Farm.

But opponents at Wednesday’s upcoming Tipton County Board of Zoning Appeals meeting are sure to bring up the subject.

That’s because when it comes to the effect of wind farms on property values, there are few definitive answers.

In Tipton County, developers juwi Wind Energy say there’s no data to support the contention that wind farms affect property values.

But even the authors of the only comprehensive U.S. study on the subject, a 2009 U.S. Department of Energy-funded look at more than 7,000 properties near wind farms, weren’t willing to go that far.

Meanwhile, opponents tend to rely on smaller studies of specific housing markets, which wind energy proponents have rejected as anecdotal and not representative.

DeKalb County’s planning, zoning and building director, Paul R. Miller, is familiar both with the study and the various criticisms of the study, and said neither side has made a persuasive case.

“[Between the two sides] I think what you’ll find is that it’s a wash,” Miller said.

“But I think what is not a wash — and which can be asserted as unequivocally true — is that the number of potential buyers will be reduced by a wind farm. It’s perhaps a subtle, but important distinction,” he added.

When it comes to Tipton County, the residential property value question becomes paramount, as do concerns that potential buyers might be driven away.

Part of it is the potential impact on individual families, but the other part of the problem is the Tri-Central Community Schools, where enrollment has dropped from 1,004 students four years ago to 878 students last year.

Opponents suggest that without young families willing to move to the district, the schools can’t survive.

Since 2006, dropping enrollment has cut the school’s general fund from $6.2 million annually to $5.1 million. The school’s interim superintendent, Bob Boyd, said the district has been running a deficit for the past three years.

Unless it results in an influx of new residents, the wind farm won’t fix that problem.

What the wind farm will do is provide the schools money which can be used for buildings and technology.

Between 2016 and 2026, the schools would receive a total of about $906,000 — or an extra $163,000 a year — for the capital projects fund. That extra funding would continue to go to the schools throughout the life span of the wind farm.

Michael Rucker, juwi’s CEO, said the funding can help Tri-Central compete with other schools, including schools investing in technology.

“Money recycled into the community creates opportunities for the community,” Rucker said. “The wind farm creates a vibrant climate that will support young families in the area. The impact of the wind farm is not going to drive kids away.”

Chad Thompson, juwi’s spokesman, said that the nearby Taylor district may be about to buy iPads for its students in kindergarten.

“We’re part of the solution,” Thompson said. “Tri-Central will now have money to compete against Taylor.”

The fact people are leaving “has nothing to do with wind turbines,” Thompson said. “People are leaving because there is the perception the school needs help. We will have a dedicated revenue stream to the school for the next 25 years.”

The irony is that backers of the Prairie Breeze project, including the farm families standing to benefit from turbine lease payments, say the wind farm will preserve the agricultural use of Tipton County’s land.

And preserving Tipton County’s farm land requires keeping out residential development — the very kind of development which could rescue Tri-Central.

Rucker argues that the economic impact of a $300 million wind farm is the kind of economic development which will revitalize the community and make young people want to stay.

“Look at the root causes of why people aren’t staying here,” Rucker said. “It’s because of economic opportunity and quality of services, such as schools. Economic opportunity brings jobs to the community for young people.”

Back to the subject of property values, the Department of Energy study did sales prices of homes within 1 mile of a wind turbine fell about 15 percent in the period after a wind farm was announced but prior to construction.

After construction, the study showed prices rebounded somewhat, and if the property was more than 1 mile from a turbine, didn’t fluctuate much at all. Long term, the outlook is more cloudy for properties close to turbines, according to the study, with possible declines over time compared to properties further away.

Critics of the study came out immediately after its 2009 publication, and suggested that the study lumped too many housing variables — age of home, housing market, building characteristics and so on — into one giant basket.

“Creating an average sales price representing houses from nine states and at least 20 different markets — as the report did — is a gross oversimplification,” suggests a critique posted on the National Association of Realtors website.

Miller said the property value guarantee was put in place “as much to address the psychological effects of the wind farm as much as the reality.”

But that’s not to say the psychological effects are insignificant, he added.

“It boils down to this for the decision makers: Whether or not the concern rises to the level where it warrants adding something like the property value guarantee,” Miller said.

In a 2011 report to the Australian House of Commons, Anne Schafer, the owner of a ranch near a wind farm project in Victoria state, expressed a concern sure to be echoed in different forms Wednesday.

“It is hard to prove this ... but common sense in itself says that if you are living on a lifestyle property next to 100 turbines surrounding you on three sides, for goodness sake, it is worth nothing,” Schafer said. “You are out there for the ambiance, for the lifestyle, and you have an industrial complex next to you.”

Scott Smith can be reached at 765-454-8569 or at scott.smith@kokomotribune.com.

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