Two routes recently released by Dominion Virginia Power (DVP) as potential route alignments for the Haymarket Project – the Carver Road and Madison alternatives – could destroy residential property values in effected communities such as Somerville Crossing, Hopewell’s Landing, and Carver Road anywhere from $3.3 million to $6.0 million. These value are in line with analysis conducted on other routes by the Coalition to Protect Prince William County. These estimates are conservative and omit businesses, apartments, and unimproved property.
Background on Model and House of Delegates Testimony
The Coalition economic team uses two models to assess likely residential property value impairment. A 2013 peer-reviewed article from The Appraisal Journal found home values in Seattle faced impairments ranging from 3-12%, with high-value homes suffering the most (we call this the Value Trigger Model). A series of published studies and testimony from 1993-2010 found home value impairments ranging from 5% up to 36%, with a likely range of 10-20%, driven primarily by how far the structure stood from the high-voltage line (we call this the Proximity Model). We assumed properties with homes 200 feet from DVP’s proposed line would be at the high end of this range, while properties with homes 200-500 feet from the line would be at the low end. In most cases, results will vary. As real estate expert and small business owner Kim Bradley told the House of Delegates when presenting this study in February of 2015, “The only way to truly assess the impact of high-voltage transmission lines on a property is to complete a full appraisal.”
Our findings in February were disturbing. Besides property directly seized for right-of-way or easements, DVP’s proposed overhead power lines will impair residential home values by as much as $7 million to $10 million, depending on the route.
Updating the Analysis for New Route Alternatives
Since February, DVP has published new overhead route alternatives. Two of these – the Carver Road and Madison alternatives – pose the greatest threat to residential properties.
Coalition team members studied over 1,000 individual properties within 2,000 feet of DVP’s proposed Carver Road and Madison alternatives (these lines follow the same path for part of their route, and so were studied together though individual properties would in some cases experience different impacts under different route scenarios). We then eliminated unimproved properties, a large church property, and businesses. We finally assessed property locations for distance from the proposed lines and obtained assessed tax values to serve as a starting point for value impairment. Our findings were similarly devastating.
|Route||In-Range Residences||Value Loss, by Model|
|Narrow (500 ft.)||Broad (2000 ft.)||Value Trigger||Proximity|
Individual homeowners could face significant losses, depending on the concentration of impairment. In the Proximity Model, the most concentrated, the average property owner on or near the Carver Road alternative would lose over $36,000 in value to impairment. On the Madison alternative, the same model projects the average homeowner would face over $40,000 in lost value.
As noted above, some published real estate studies show a 36% value impairment caused by high-voltage transmission lines crossing or approaching residential property. For the average property owner in the broad sample considered, this extreme loss would amount to over $140,000 in lost value.
Limits to the Model
These numbers are conservative, as they omit potentially millions of dollars in property impaired directly via right-of-way seizure; omit townhouses or apartments; omit houses of worship (some with over $2M in property near one or both of the proposed route alternatives); use Prince William County assessed tax values, which undershoot market value and lag sales and/or construction completion; omit a few hard-to-spot properties with obscured structures (we did not hand check every property); exclude undeveloped property (include a $9M parcel belonging to the University of Virginia Foundation) and exclude direct or indirect impact to businesses (well over $10M in property at risk).
Generalized Or Otherwise Hard to Establish Impacts
This model also omit dynamic effects, such as the impact directly impaired properties may have on those which serve as comparables or support overall market values. All county property owners depend on comparables and general market conditions to help preserve home values, which for most individuals is the largest single investment they will ever make. The hundreds of properties directly impaired or thousands bearing some impact will have follow-on effects on ten thousand or more when it comes time to sell, to refinance, or to seek a home equity loan.
High-voltage overhead transmission lines may also have downside impacts on properties which depend on aesthetic appeal for part of their value, including residential communities. One quite illustrative example is the in-progress development of The Villages of Piedmont at Leopold’s Preserve, which sits just west of Route 15 / James Madison Highway. While none of the development’s current home are within 200 or even 1000 feet of a proposed transmission line, DVP’s Madison alternative would place a high-voltage transmission line directly across the entrance of this development, which has set aside 380 of its 500 acres as a permanent conservation easement. Ironically, the “Leopold” in the development’s title refers to Aldo Leopold, a famous American environmentalist, wildlife management pioneer, and founder of the Wilderness Society.