Power lines near Thompsons, TX. Image courtesy of Houston Public Media.

The Journal of Real Estate Research recently published a study by Chris Mothorpe and David Wyman, assistant professors at the College of Charleston, concluding that a property’s vicinity to high-voltage power lines can negatively impact its value. Unlike prior investigations that had similar conclusions, Mothorpe and Wyman focused solely on vacant lots of land, as opposed to lots with constructed homes, to ensure a pure translation of the damages to the tract of land.

The study found that vacant parcels adjacent to high-voltage powerlines sold for 45% less than similar lots that weren’t located near powerlines. Parcels that were non-adjacent, but within 1,000 feet of a powerline sold at an 18% discount to comparable parcels located further away. In order to make the numbers meaningful to actual homeowners, the study combined the numbers regarding vacant land with data describing the proportion of a property’s value made up by the land alone. To do this, the researchers assumed a market where land accounted for 20% of a home’s overall value. Therefore, a 45% decrease in the land value alone, due to its being adjacent to a high-voltage powerline, would yield a 9% drop in overall property value.

Mothorpe and Wyman created a data set from sales of 5,455 vacant parcels sold between 2000 and 2016 in Pickens County, S.C. The lots were located around a network of high-voltage powerlines transmitting power from the Oconee Nuclear Station. Three primary factors are cited as causing the discount. First, buyers are concerned by the perception of adverse health affects associated with nearness to high-voltage powerlines. Second, buyers tend to find the powerlines visually unappealing. Finally, high-voltage lines produce an audible humming noise easily perceived by those residing nearby. Of the three, researchers believe that the visual factor is the most problematic for potential homebuyers.

Studies like these are important to the landowner for at least two reasons. First, they provide an empirical foundation for the overwhelming landowner preference against the presence of high voltage lines. These studies can help support appraisals which assert property damages based on proximity to an incoming powerline. Second, these studies should put landowners on notice that powerlines being built in the vicinity of their home can have a very real, and negative, impact on property value.

Written by Graham Taylor and Christopher Chan