Wind Turbines Do Not Adversely Affect Residential Property Values

The mandate of the Municipal Property Assessment Corporation (MPAC) is to provide property assessments to municipalities as well property owners, tenants and other stakeholders across Ontario, using a property assessment system based on current values.

Growth in the renewable energy sector in Ontario in recent years has drawn considerable attention to questions regarding the impact of Industrial Wind Turbines (IWTs) on the value of residential properties. These issues were initially explored in a 2008 report, which concluded that the presence of IWTs that are either abutting or in proximity to a residential property do not have an impact on that property’s value assessment. The MPAC has now published a new study, using updated, 2012 property assessment data, which reaches the same conclusion.

The 2012 study (the “Study”) examined two questions:

(1)    whether residential properties in close proximity to IWTs are assessed equitably when compared to residential properties located at a greater distance; and

(2)    whether the presence of IWTs in close proximity to a residential property affects that property’s sale price.

For the purposes of both questions, MPAC defined an “IWT” as a turbine with a capacity of at least 1.5 megawatts (MW). The Study examined 1,157 IWTs located on 834 properties across Ontario and analyzed their impact on the sale prices of properties located within 5 km of those IWTs, looking at open market sales in the areas surrounding IWTs in the period between January 2009 and December 2012. The following is a brief summary of the Study’s findings:

  1. The Study showed that the ratio of assessed value to adjusted sale price for residential properties located close to IWTs is within 4.2 to 4.5% of the same ratio for properties located 1 to 2 km, 2 to 5 km and over 5 km from IWTs.
  2. These findings confirm the 2008 study’s conclusions by showing that residential properties located in proximity to IWTs (including ones with a full or partial view of an IWT) are assessed equitably in relation to residential properties located at a further distance.
  3. MPAC considered sales of residential properties across 15 market areas and statistically analyzed the variation of sale prices for properties located within 1 km, between 2 and 5 km and over 5 km from an IWT.
  4. The Study clearly showed that being located in proximity to an IWT has no statistically significant impact on the sale price of a residential property. In some market areas, being located within 1 km of an IWT actually translated into an increased sale price.

In sum, the Study’s findings confirm the fact that IWTs do not have a negative impact on property values and sale prices for residential properties located near them. The conclusions reached are in line with MPAC’s own 2008 study on the subject as well as a 2013 study in the United States conducted by the Berkeley National Laboratory for the United States Department of Energy.

For more information, you can visit MPAC’s website. You can also read the full 2012 Study report here.

Sven Walker is a Partner at Dale & Lessmann LLP, a Toronto, Ontario, Canada-based full service law firm specializing in renewable energy law and in particular solar, wind, hydro and biogas energy law. Sven is a legal counsel to a number of industry equipment and technology manufacturers, suppliers and installers, as well as investors, developers, purchasers, contractors, consultants and financing entities. To speak with Sven, please call 416-369-7848 or email him at swalker@dalelessmann.com.

Prepared with the assistance of Nedko Petkov, student-at-law at Dale & Lessmann LLP.