Today's date: Thursday October 23, 2014 Vol 47 Issue 42
   
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U.S. wrestling with property values and setbacks for its wind turbines

by David Meyer

While residents in Wellington County are struggling to stave off a number of wind farm pro­jects in their communities, their counterparts in the United States are facing the same battles and arguing with the same tools.

 

The difference is that here the provincial govern­ment has taken away the rights of county and municipal governments to have a say in the process, where­as in the United States, counties still have authority and control over wind farms.

An example of that is Adams County in Illinois, which recently received a re­port from a real estate appraiser  for Adams County. Michael McCann submitted an 82 page report of 21,098 words to county council outlining the difficulties setting setbacks, as well as the loss of property values and possibility of illness that have been associated with wind farms. His report was sworn under oath.

He wrote the county is considering a 1,000 foot resi­dential setback requirement for wind turbines, and certain com­mittee members are contem­plating increasing that 1,500 feet.  He said wind farms are are intensive, large-scale pro­jects with a decidedly industrial character, and most projects are proposed to “over­lay” ex­isting mixed-use residential and agricultural areas in Adams County.

He wrote, “These large scale projects affect thousands of acres, and are far different than ‘typical’ zoning variation or land use approval requests, such as a drive-through lane at a restaurant or bank, or a re­quest to construct a gas station with a car wash. When the prudence of reviewing requests for smaller-scale, single uses is required to insure the new de­velopment does not adversely affect neighboring people or land uses, the immense scale and intensity of wind energy project development and opera­tions demands even greater scrutiny and expert evaluation, which is often not financially feasible for smaller, rural counties.”

He said three potential contaminations can have on property are: cost effects, use effects, and risk (stigma) ef­fects - and all three are recog­nized as being present with wind energy pro­jects.

Cost effects can include neighbouring owner costs to attempt to mitigate against sound intrusion, shadow flick­er, medical costs to deal with sleep deprivation related con­ditions, as well as, in some in­stances, the cost to rent sub­stitute housing and potential legal costs incurred to protect individual owner’s property rights. For agricultural prop­erty, there can be increased costs due to the loss of ability to retain aerial spraying services, which can result in increased cost for ground spraying methods or decreased crop yields.

Use effects include the loss of peaceful use and enjoyment of homesteads for many turbine neighbours, and there is evi­dence that livestock has been adversely impacted by the noise from turbines, ranging from death (goats in Taiwan) to reproductive disorders (in Wis­consin) and behavioral changes and irritability of horses and cattle. Those may also repre­sent cost effects, in some cases, or other forms of financial impact.

Stigma effects can range from loss of aesthetics, dim­in­ished views and character of neighbourhoods, to fear of health issues and noise dis­turbance, etc. This effect is often manifest in the lack of marketability of homes in the “foot­print” and nearby prop­er­ties most impacted by active tur­bines, and to varying de­grees the known and unknown cost and use effects are also contributing factors to stigma effects.

McCann wrote, “I have also reviewed studies conducted by other appraisers, which yield similar indications of property value impacts. In the Adams County matter, my evaluation of the proposed wind turbine setbacks is conducted from a real estate valuation per­spective with a land use impact focus, since every land use has some impact upon neighboring land uses and residents. The im­pact can be substantially positive, negative, or so mini­mal as to be immeasurable in terms of property values. As I understand it, governmental policies and land use decisions are intended to prevent “signi­ficant” negative impacts on property values and the peace­ful use and enjoyment of exis­t­ing property by area residents.

In his summary, McCann wrote: 

- Residential property val­ues are adversely and meas­urably impacted by close prox­i­mity of industrial-scale wind energy turbine projects to the residential properties, with value losses measured up to two-miles from the nearest turbine(s), in some instances.

- Impacts are most pro­nounced within “footprint” of such projects, and many ground-zero homes have been completely unmarketable, thus depriving many homeowners of reasonable market-based liquidity or pre-existing home equity.

- Noise and sleep disturb­ance issues are mostly affecting people within two miles of the nearest turbines and one-mile distances are commonplace, with many variables and fluc­tu­ating range of results occurring on a household by household basis.

- Real estate sale data typi­cally reveals a range of 25% to approximately 40% of value loss, with some instances of total loss as measured by aban­donment and demolition of homes, some bought out by wind energy developers and others exhibiting nearly com­plete loss of marketability.

 - Serious impact to the “use and enjoyment” of many hom­es is an on-going occurrence, and many people are on record as confirming they have rented other dwellings, either indivi­dual families or as a home­owner group-funded mitigation response for use on nights when noise levels are increased well above ambient back­ground noise and render their existing homes untenable.

- Reports often cited by industry in support of claims that there is no property value, noise or health impacts are often mischaracterized, mis­quot­ed, or are unreliable. The two most recent reports touted by wind developers and com­pleted in December 2009 con­tain executive summaries that are so thoroughly cross-contin­gent that they are better described as “disclaimers” of the studies rather than solid, sci­entifically supported conclu­sions. Both reports ignore or fail to study very relevant and observable issues and trends.

- If Adams County approves a setback of 1,000 feet, 1,500 feet, or any distance less than two miles, these types of property use and property value impacts are likely to occur to the detriment of Adams County residences and citizens for which the nearest turbines are proposed to be located.

- The approval of wind energy projects within close proximity to occupied homes is tantamount to an inverse con­demnation, or regulatory taking of private property rights, as the noise and impacts are in some respects a physical inva­sion, an easement in gross over neighbouring properties, and the direct impacts reduce prop­erty values and the rights of nearby neighbors.

- A market value reduction of $6.5-million is projected for the residential property located in the footprint and within two miles of the pending Prairie Mills project located in east Adams County.

McCann wrote, “If the county board should choose to adopt the industry requested minimal setbacks, or some other setback of less than two miles from residential uses or occupied dwellings or struc­tures such as schools, churches, and nursing homes, I have developed a series of recom­mendations that would at least partially mitigate the widely ex­perienced impacts prevalent with industrial scale wind turbines developments, as fol­lows:

- A property value guarantee (PVG) should be required of the developers;

- A county controlled fund or developer bond should be required to guarantee no undue delay in PVG payment(s) to legitimately affected home­owners, and/or to buy out home­owners located within two miles of any turbines if they elect to relocate away from the turbine project(s) and cannot sell for the pre-project market value of their prop­er­ties. Such a guarantee is nomi­nal in cost, relative to total pro­ject costs, and are used to con­dition high impact land use ap­provals such as landfills and even limestone quarries, as well as other wind energy de­velopments.

- An alternative to the bonding element of recom­mendation one would be to require that the developer(s) obtain a specialized insurance policy from a high risk in­surance carrier or legitimate insurer, such as Lloyds of London, if they will even in­sure against such impacts. If Lloyds was unwilling to pro­vide such insurance, however, that should be compelling to the county that professional risk-management actuaries find such projects too risky for even them to insure. Under those possible circumstances the bur­den of risk is fairly placed with the developer, rather than the residential occupants who are being surrounded or otherwise directly impacted by close proximity of the projects.

- If Adams County decides to permit projects, the limited evidence of impacts beyond a two mile setback would miti­gate against the need for a PVG as cited in recom­men­dation one.

- If Adams County decides to permit projects, the county should require developer fund­ing and a plan to constantly monitor not only sound levels in decibels, but also in low frequency noise emissions from the turbines utilizing the best available technology, or at least homeowner reports and logs. There is significant evi­dence and personal accounts confirming that low frequency sound/noise is “felt” by nearby occupants, and, as I understand it, cannot be measured by decibels as audible noise is typically measured. Disclosure of the owner’s actual experi­ence to prospective buyers is necessary from both an ethical perspective and, I believe potentially under the Illinois Real Property Disclosure Act, as a “known” defect or detri­men­tal condition. Thus, docu­men­tation should be created at the cost of the developer(s), to insure that appropriate disclos­ur­es can be made to any pros­pective buyer(s) of homes within the two-mile zone.

- Appropriate devices should be installed at the de­velopers expense at all occu­pied dwellings and property lines within a two-mile dis­tance of any turbines, and the County should retain the ability to immediately enforce the shut-down of any turbines ex­ceeding a level of 10 decibels or more above ambient background noise levels from any property/home experi­en­cing that exceeded noise level. The proximity of constant or frequent noise sources is an adverse impact to the use and enjoyment of a residential property, and indicates a basis for loss of property value.

- An alternative to that re­com­mendation would be to place a limit on hours of op­eration, requiring turbines with­in two miles of any occu­pied (non-participating) dwell­ing be shut off during normal sleeping hours (10pm to 7 am).

- If the county finds that the wind energy projects are de­sirable from a economic de­velopment goal or perspective, or for the “public good”, the recommendation is that “footprint” and 2-mile distant neighboring homeowners (mea­sur­ed to lot line from the furthest span of turbine blades) be afforded the opportunity to sell to either the developer or the county, with possible use of eminent domain powers em­ployed by the county, on behalf of and at the expense of the developer(s).

- The financial assurance for decommissioning and re­clamation of wind turbine pad sites such as a bonding require­ment, is also recommended as a county condition. To demon­strate solvency companies should pay the bond re­quire­ments before starting con­struc­tion. It’s basically insurance in case the company goes bank­rupt or otherwise abandons the wind project without taking  down the turbines and re­claiming the land. Coal mines, quarries, landfills, and drilling companies have similar bond or financial assurance require­ments.

- An aesthetic landscaping requirement for wind project developers to plant mature trees or groves to shield the view between residential prop­erties and turbines. Evergreens planted along property lines or other types of trees strate­gically planted between resi­dential windows and turbines would partially alleviate aes­thetic impacts from turbines.

Finally, McCann suggested, the county should consider a moratorium on wind energy project development until such time as:

- A thorough and complete Wind Energy Ordinance is developed and adopted by the County, which incorporates all the protection and authority of zoning, building and health codes.

- Appropriate conditional or special use standards are de­veloped and adopted, to insure wind developers carry the burden of their for-profit pro­jects rather than the hosting jurisdiction(s) and/or neigh­bouring property owners.

- The actual experiences of numerous existing turbine neigh­bours is documented thor­oughly by an impartial group of professionals with appropriate qualifications in the various relevant fields of expertise, such as acoustic engineers, medical sciences, valuation professionals.

He added that those recom­mendations are not intended to be all inclusive or to address all wind energy project issues and impacts. They are intended to address issues that affect the public health, safety and wel­fare of area residents, as well as their property values.

 

 

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