Development on Property Values Lucija Muehlenbachs Resources for - PowerPoint PPT Presentation

Measuring the Impact of Shale Gas Development on Property Values Lucija Muehlenbachs Resources for the Future Beia Spiller Christopher Timmins Environmental Defense Fund Duke University M ANAGING THE R ISKS OF S HALE G AS D EVELOPMENT Resources for the Future, June 27, 2013

[Insert intro text here] • [Insert bullet text here] Hopewell Township, Pennsylvania. Photo: Scott Goldsmith, National Geographic. 2

Groundwater concerns [Insert intro text here] • [Insert bullet text here] [Insert new paragraph here] gasland Photo: Rick Kintzel Photo: Pittsburgh Student Environmental Coalition 3

Introduction Can impact property values: • (+) from economic growth/royalties • (-) from environmental risks/noise/landscape Impacts may differ by: • Proximity • Drinking water source (groundwater vs. piped) 4

Objective Estimate the effect on property values: 1. Proximity to a drilled well 2. Proximity to a permitted well  Identify the effect groundwater contamination concerns have on property values. 5

Strategy -Determine distance at which a well has an effect on property values -Measure difference in property values before and after a well is drilled -Compare the difference between piped- water homes and groundwater dependent homes 6

Study Area: Washington County, PA 7

All Properties Sold 2004-2009 8

Finding Similar Properties 9

Identifying Extent of Impact 10

Findings from Washington County Properties closer than 2km (1.2 mi) to a well pad: • 10% increase • Unless the property depends on groundwater: 16% decrease  Groundwater concerns cost 26% of property value No effect from permitted, not drilled, wells 11

Caveat Our identification strategy compares houses inside and outside 2 km of a well: • Impact is relative to overall changes in the county • Houses outside 2 km still exposed to shale gas 12

Future Work  Overall impact on housing markets  Data provided by CoreLogic:  Marcellus and non-Marcellus Counties in PA and bordering NY  1994-2012 13

Property Sales in PA and NY, 1994-2012

Public Water Service Areas

Summary  Use a combination of quasi-experimental techniques and detailed geographic information to recover the impacts of proximity to shale gas wells.  Significant positive impacts on piped-water households.  Significant negative impacts of shale gas development on groundwater dependent households.

Thank you! muehlenbachs@rff.org