How Utility Lines May Effect Property Values

I negotiate many power line easements on behalf of property owners each year. Generally, the utility company wants to pay for only the easement itself and refuses to acknowledge that the presence of the power line could have an effect on the overall value of the property. In part, that is because there is very little data out there on the effect of power lines on property values.

A recent study in the Journal of Real Estate Research makes some inroads on that lack of data. The study was conducted by David Wyman and Chris Mothorpe of the College of Charleston in Charleston, South Carolina. They used a sample of 5455 vacant lots in Pickens County, South Carolina that were sold between 2000 and 2016 and determined that properties adjacent to high voltage power lines experienced discounts of 44.9% of their value because of the power line. They also determined that there was a discount of 17.9% for vacant properties that were up 1,000 feet away from the power line.

The study used only vacant lots so as to eliminate the effect on value due to varying types of improvements on the land. Professors Mothorpe and Wyman suggest that there are three factors that may influence the amount of the discount. One is the perception of health impacts associated with proximity to high-voltage lines. The unattractive view of a high voltage line on or near property is another factor. Finally, as anyone who has lived near a high-voltage line can attest, the lines produce a humming sound that can be extremely irritating.

So far, there really has not been any substantive evidence of negative health effects due to the proximity to high voltage lines. See for example this review of some of the recent studies. Even though the concern with possible health effects is widespread, it is usually not possible to get any compensation from power companies for health issues.

Valuation of property is a complex area, which is why we often call on appraisal experts to assist us when negotiating this kind of easement. Studies like this one by Professors Wyman and Mothorpe may help lawyers and appraisers get increased compensation for their clients.