Effects of Wind Turbines on Property Values in Rhode Island

Executive Summary This study assesses of the effect that onshore wind turbines have on nearby property values in Rhode Island. The state of Rhode Island established the RIWINDS program in 2006 to promote the development of wind energy in the state, with the goal of meeting 15% of the state's electrical consumption with wind energy. Yet progress towards that goal has been slow. Wind energy proposals commonly meet with strong opposition despite widespread public support for wind energy in the abstract, and a major source of opposition that is commonly articulated is a concern that wind turbines may adversely affect property values. As a consequence, it is important to assess the extent to which wind turbines affect transaction prices of nearby properties. Methodology The study estimates the effect of wind towers on property prices using the Hedonic Price technique. The Hedonic method is a statistical approach that uses extensive data on property transactions to identify the extent to which transaction prices are affected by various characteristics of the properties and their surroundings. Characteristics of the property include such factors as the size of the house, size of the lot, number of bedrooms, number of bathrooms, among other characteristics of the property. Neighborhood characteristics might include factors such as ocean views, crime rates, nearby industrial developments, among others. The key factor for purposes of this study is the effect, if any, that nearby wind turbines have on property prices. This study uses data from 48,554 single-family, owner-occupied housing transactions within five miles of turbine sites in Rhode Island over the time Of these transactions, 3,254 are for properties that are within one mile of the wind turbine, and it is these observations that are critical for estimating the impacts. If wind turbines have an adverse impact on property transaction prices, then we should find that transactions for properties that are located closer to the wind turbine (e.g., within ½ mile) should sell for systematically lower prices than those located further from the wind turbine (e.g., 3 to 5 miles), after controlling for other characteristics of the various properties and their surroundings. 3 In addition to distance to the wind tower, we also consider other factors related to the wind turbine that could influence effects on property values. First, one might expect a larger wind turbine to have a greater effect on values of nearby properties than would a smaller wind tower, …