{"id":27410,"date":"2013-09-16T19:47:46","date_gmt":"2013-09-16T23:47:46","guid":{"rendered":"https:\/\/www.windturbinesyndrome.com\/static\/static\/?p=27410"},"modified":"2013-09-16T21:54:24","modified_gmt":"2013-09-17T01:54:24","slug":"garbage-in-garbage-out-new-berkeley-property-analysis","status":"publish","type":"post","link":"https:\/\/www.windturbinesyndrome.com\/static\/2013\/garbage-in-garbage-out-new-berkeley-property-analysis\/","title":{"rendered":"Garbage in, garbage out: New “Berkeley” property analysis"},"content":{"rendered":"

\"Garbage<\/p>\n

Editor’s note<\/em>: \u00a0The Lawrence Berkeley National Laboratory (LBNL) has released a new version of its property value analysis, assessing whether wind turbines degrade property value. \u00a0Like their previous study, the authors conclude there is no appreciable loss in value. \u00a0 Click here<\/a> to read the report.<\/p>\n

It’s horseshit—just like the earlier attempt by Ben Hoen at al. to paper over huge property devaluation. \u00a0Mike McCann, a Chicago-based property appraiser with sterling credentials, explains why it’s, well, horseshit. \u00a0What the LBNL data really demonstrate is the following (in McCann’s words);<\/p>\n

1,198 sales within 1 mile of turbines demonstrate a 28% lower value, and the data provides a compelling basis to determine there is a causal relationship between distance and impact.”<\/p><\/blockquote>\n

.<\/span>
\n—Michael S. McCann
\nMcCann Appraisal, LLC
\nChicago, IL<\/p>\n

.
\n<\/b><\/span>The new LBNL value report has been placed with many media outlets, as part of the follow up public relations campaign to dismiss value impacts as a mere \u201cconcern\u201d, while doing little to address the very real problem. I have received many requests for comment on the latest LBNL effort. \u00a0A thoughtful review of the claims stated therein is warranted, and my preliminary remarks follow.<\/p>\n

First, the August 2013 LBNL report conclusions should not be relied on for any purpose other than showing that statistics can be used to support any biased position they choose, but it is far from being an empirical value study.\u00a0 There was certainly enough data to perform a study that incorporated the accepted methodology of paired sales and\/or resale analysis, with careful analysis of marketing times and other value influencing factors. But LBNL once again ignored the primary data source for residential values; the Multiple Listing Service (MLS) active in any given study area. (Marketing times do not show in Assessor da<\/i>ta)<\/p>\n

Once you bother to read through all the scientific sounding discussion and internally supported citations (Hoen citing Hoen, for example), I recommend that you refer to the\u00a0last sentence of paragraph 2 on report page # 5<\/span>, wherein the authors disclose an apparent bias as follows:\u00a0\u201cTherefore for the purposes of this research we will assume 3-4% is a maximum possible effect.\u201d<\/i><\/b><\/p>\n

Review of Table 7 arrays the data and reveals impact on a factual basis.\u00a0 The empirical evidence is presented on Table 7before<\/span>\u00a0the sale price data was \u201ccrunched\u201d to obtain the stated results.\u00a0 On a side note, the focus is on claims of statistical significance; not upon value impact.<\/p>\n

Regardless of terminology or focus, the fact is that the raw data shows a post construction negative\u00a0impact of 28%<\/b>\u00a0for homes < 1 mile from turbines vs. homes in the 3-10 mile range, as follows:<\/p>\n

\"McCann2\"<\/p>\n

Second, the methodology utilized in the LBNL analysis is not an accepted, proven regression model.\u00a0 It pools data from 67 different projects in 27 counties in 9 states, and simply cannot be deemed reliable because of the wide value variations that exist between these local markets.\u00a0 To the contrary, it insures\u00a0 that the variables have such wide variation that any impact measured after running the data through their hedonic \u201cmodel\u201d will not be able to identify any impact at the level needed to establish statistical significance\u00a0(see Al Wilson, Rubber Rulers<\/a>)<\/i><\/p>\n

In contrast, however, the raw data is\u00a0substantively significant<\/i><\/b>, as it shows the real market reaction, without any assumptions, alteration or adjustment of the numbers, and no built in bias (i.e., 3% to 4% max impact). \u00a0(Click here<\/a>.)<\/p>\n

Further, given that the Table 7 data includes 1,198 sales located within 1 mile of turbines, and also that it covers 67 different projects, it seems quite clear that there is a high level of\u00a0casual significance<\/i><\/b>\u00a0to establish there is a direct relationship between distance and value impact, and these market reactions are commonly repeated throughout the USA.<\/p>\n

The attached\u00a0Rubber Rulers<\/i><\/a>\u00a0paper by Al Wilson addresses the numerous problems with the 2009 LBNL analysis, and it appears that the majority if not all of these problems are replicated in the 2013 LBNL report.\u00a0(Note: see Wilson bio<\/a>.\u00a0 This professional appraiser literally wrote the book on environmental impact on property values and other value impairment research, statistical standards studies, etc.)<\/i><\/p>\n

What non-appraisers (i.e. LBNL authors) refer to as \u201canecdotal\u201d evidence, in their attempts to dismiss actual examples of value loss, is what appraisers refer to as Comparable Sales and other market evidence.\u00a0 From an appraisal perspective, the 1,198 sales within 1 mile that find a 28% loss of value is meaningful, but actual local examples are potentially a higher level of proof.<\/p>\n

Realtors such as Annie Cool (Falmouth, MA) are in the trenches on this issue, and consistently find that buyers will not pay prices that are at \u201cno turbine proximity\u201d value rates, and that most buyers simply will not even make an offer on homes near turbines.\u00a0 Homes that sit on the market for extensive periods of time have downward pressure on list price, and while some owners elect to pull the property off the market rather than accept a large (or total ) loss of equity, others end up selling for whatever the \u201cmarket\u201d will pay.\u00a0 The 1,198 sales represent a sample of the latter group, and again, show a 28% lower value, on average.<\/p>\n

These types of marketing facts are completely ignored in the LBNL studies, which is a major failing of the academic approach to addressing this issue.\u00a0 My own recent study of 13 paired sales in Illinois found marketing times within 1 mile to be exactly 1 year longer than competing homes (paired sales<\/i>) located an average of 10+ miles away from the turbine projects.\u00a0(All 2012 sales near turbines were paired with one or two sale further away, but which would otherwise be considered competing homes while on the market)<\/i><\/p>\n

\"McCann1\"<\/p>\n

As an appraiser, I would prefer to have 5 good \u201ccomps\u201d than 50,000 meaningless data points.\u00a0 In fact, many billions of dollars in mortgage loans are made across the country on the basis of 3 to 5 good \u201ccomps\u201d.\u00a0 But no mortgages or sales will be based on the LBNL report\u2026it is irrelevant for real world purposes.<\/p>\n

Third, Assessed values may or may not be accurate.\u00a0 My experience dictates that AV data is not reliable for purposes of establishing value of a given property.\u00a0 It is merely a method of spreading the taxes levied on a supposedly uniform and\u00a0ad valorem<\/i>\u00a0basis across the properties in a given jurisdiction.\u00a0 AV\u2019s may have decreased in some locations while increasing in others, but it seems pretty consistent that Assessor\u2019s Offices are not being compelled to seriously address local impacts from turbines.\u00a0 I have been told by one Assessor that \u201csince none of the properties nearby sold, there is no basis for reducing the values\u201d.<\/i>\u00a0 This statement was despite the fact that several of the properties in question had been extensively marketed and could not elicit even a single offer at ANY price.<\/p>\n

Remember, Assessors have a different job than independent appraisers; Assessors are required to assess properties\u00a0uniformly<\/b>, whereas appraisers are required to value each property individually and with attention to all relevant factors that affect value.\u00a0 Stocks are a far more \u201cliquid\u201d asset than is real estate typically, as it can be sold in minutes, or days at most.\u00a0 Real estate marketing times are an important component in setting values, and when the asset loses all or virtually all of its liquidity, that is indeed a significant value impact.\u00a0 One might look to foreclosure sale data to support the discount that is needed to attract a buyer of a \u201cproblem\u201d property, in a time frame that preserves reasonable liquidity.<\/p>\n

Finally, the LBNL study is completely inappropriate as \u201cevidence\u201d for developers to submit to zoning boards, when considering turbine SU permit applications.\u00a0 Typical Zoning Bylaw standards for approval require a finding that the \u201cproject\u201d will not have any adverse impact on neighboring property values (as well as the public health, safety & welfare<\/i>).<\/p>\n

The LBNL report does not address this standard(s) of approval, but instead attempts to recast the question as whether turbines have a far reaching, uniform and statistically significant impact.\u00a0 Home sales that are not in the neighborhood of turbines are irrelevant, as is whether the impact is widespread or uniform. Zoning regulations require denial of applications when there will be ANY significant adverse impact on neighboring values, and do not provide the right for any development to diminish the value of neighboring property.\u00a0 The regulations also do not typically require a neighboring or abutting property owner to be \u201cpooled\u201d with the level of impact for an entire Town or State.\u00a0 Zoning regulations are intended to preserve values (etc.), but not to create sacrifice zones to accommodate wind energy development.<\/p>\n

I trust this will help save a little time in addressing the recycled claims of no value impact from turbines.\u00a0 But if you choose, ignore all opinion and just go to the facts: \u00a01,198 sales within 1 mile of turbines demonstrate a 28% lower value, and the data provides a compelling basis to determine there is a causal relationship between distance and impact.<\/p>\n

.<\/span><\/em><\/p>\n

Contact<\/span>\u00a0mikesmccann@comcast.net<\/a><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Editor’s note: \u00a0The Lawrence Berkeley National Laboratory (LBNL) has released a new version of its property value analysis, assessing whether wind turbines degrade property value. \u00a0Like their previous study, the authors conclude there is no appreciable loss in value. \u00a0 Click here to read the report. It’s horseshit—just like the earlier attempt by Ben Hoen at al. to paper over huge property devaluation. \u00a0Mike McCann, a Chicago-based property appraiser with sterling credentials, explains why it’s, well, horseshit. \u00a0What the LBNL data really demonstrate is the following (in McCann’s words); 1,198 sales within 1 mile of turbines demonstrate a 28% lower value, and the data provides a compelling basis to determine there is a causal relationship between distance and impact.” . —Michael S. McCann McCann Appraisal, LLC Chicago, IL . The new LBNL value report has been placed with many media outlets, as part of the follow up public relations campaign to dismiss value impacts as a mere \u201cconcern\u201d, while doing little to address the very real problem. I have received many requests for comment on the latest LBNL effort. \u00a0A thoughtful review of the claims stated therein is warranted, and my preliminary remarks follow. First, the August 2013 LBNL report conclusions should not be relied on for any purpose other than showing that statistics can be used to support any biased position they choose, but it is far from being an empirical value study.\u00a0 There was certainly enough data to perform a study that incorporated the accepted methodology of paired sales and\/or resale analysis, with careful analysis of marketing times and other value influencing factors. But LBNL once again ignored the primary data source for residential values; the Multiple Listing Service (MLS) active in any given study area. (Marketing times do not show in Assessor data) Once you bother toRead More…<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[157,168,16],"tags":[],"_links":{"self":[{"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/posts\/27410"}],"collection":[{"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/comments?post=27410"}],"version-history":[{"count":0,"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/posts\/27410\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/media?parent=27410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/categories?post=27410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.windturbinesyndrome.com\/static\/wp-json\/wp\/v2\/tags?post=27410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}