Friday, November 9, 2012

Hydro Quebec Towers: A "Significant Chilling Effect" on Property's Value

The NH Board of Tax and Land Appeals ruled that the first HVDC power line in New Hampshire had a "significant chilling effect" on a property's value and granted a tax abatement of 50%. 

In a November 4th Union Leader article, "Northern Pass scares buyers, lowers values," Northern Pass spokesman Michael Skelton dismissed as biased opinion, not fact, the statements of two respected owner/broker realtors that the proposed project has already diminished property values along the intended route by as much as 50%. Skelton shifted the focus by asking whether people stopped
"visiting New Hampshire after the existing high-voltage transmission line from Quebec was built 20 years ago."

The relevant question that Skelton should have asked was: did that high voltage transmission line from Quebec reduce property values 20 years ago?

The answer is: yes, according to a property tax abatement order issued by the New Hampshire Board of Tax and Land Appeals (BTLA)* in 1992.

Before the BTLA issued that order, however, the developer of the high voltage direct current line from Quebec, the New England Hydro Transmission Company, Inc., had hired a local appraiser, Stewart Lamprey of Meredith, to assess "what economic impact, if any, transmission lines have upon adjacent property values."

Mr. Lamprey concluded that "the proximity to overhead high voltage transmission lines has no measurable effect on property values. This appears to be true whether a property is abutting, traversed, or visually affected by a power easement" (n.p., Land Utilization Study Along the Proposed Phase 2 Transmission Line in the State of New Hampshire, Jan. 18, 1986).

In 1986, the NH Site Evaluation Committee approved the Quebec line in part because "no contradictory evidence was introduced to rebut Mr. Lamprey's testimony" (p.15) that the project would have negligible effect upon property values."

But in 1992, two landowners along the Quebec line whose request for a property tax abatement had been turned down by their municipality, Wentworth, successfully appealed the decision with the BTLA,  which agreed that the new power line had a "significant chilling effect" on property values. We have no count at this time of how many abatement requests were granted by towns, obviating the need for appeals to the BTLA, nor how many appeals may have been filed in Superior Court rather than with the BTLA. Given the BTLA's response to these two appellants, however, it is likely that there were more than a few. 

 In 1987, the appellants purchased land and buildings in Wentworth for $135, 000. They were unaware that New England Hydro was about to construct Hydro-Quebec transmission towers on the right of way on the property. In 1989 and 1990, the town assessed the property at $133,800. The landowners appealed the assessment to the BTLA. Their appeal included the following arguments:

(2) since the date of purchase [the developer, New England Hydro] has erected Hydro-Quebec transmission towers in the right-of-way;
(3) a 350 ft. by 1400 ft. power line easement results in less than 1/2 acre of usable land;
(4) the Property is "unmarketable at any price";
(5) they paid too much for the Property because they weren't aware of the major "imminent expansion" by [the developer]. (
p. 1

BTLA found the arguments compelling, citing both the visual impact and stigma associated with EMF radiation from high voltage lines:

(1) the fact that through ignorance of the Hydro-Quebec expansion the Taxpayers paid too much for the property should not go unadjusted;
(2) the knowledge of the impending construction of the Hydro-Quebec line would have a significant chilling effect on the value dwelling (and in general the property) in such close proximity due to both its visual effect and the uncertainty of the health concerns raised by electromagnetic radiation [emphasis added];
(3) owing to the close proximity (within 50 ft. according to the Taxpayers) of the house to the edge of the the very shadow of the tower, the Board applies a 50% reduction to the total value and leaves the allocation of value between land and building to the Town. (
p. 2)

BTLA reduced the town of Wentworth's assessment of $133,800 to $66,900, a 50% decline in valuation.  

Towns and landowners along the intended path of the proposed new Hydro Quebec line would do well to learn from history -- before it is too late. As did the developer of the first Hydro Quebec line, Northern Pass is already asserting that power lines have  little to no effect on property values.

As for Northern Pass, will it also dismiss the New Hampshire Board of Tax and Land Appeal's 50% reduction of the value of a property impacted by Hydro Quebec towers as a biased opinion by people who opposed power lines -- or file an ethics complaint?
*Appointed by the supreme court of New Hampshire, the three full-time members of the BTLA are "learned and experienced in questions of taxation or of real estate valuation and appraisal."  Board members "do not engage in any other employment during their terms that is in conflict with their duties as members of the board."

Hydro-Quebec HVDC tower, Wentworth NH


Friday, November 2, 2012

Property Values, Appraisals, and Northern Pass: A Timeline to November 1, 2012

Transmission developers in New Hampshire have never experienced challenges to their claim that power lines have no appreciable impact on property values. Until now.


In 1985, New England Hydro-Transmission Electric Company, Inc., the developer of New Hampshire's first HVDC power line running from Monroe to Sandy Pond, Massachusetts, engaged a New Hampshire property appraiser, Stewart Lamprey, to determine "what economic impact, if any, transmission lines have upon adjacent property values."

Mr. Lamprey concluded that "the proximity to overhead high voltage transmission lines has no measurable effect on property values. This appears to be true whether a property is abutting, traversed, or visually affected by a power easement" (n.p., Land Utilization Study Along the Proposed Phase 2 Transmission Line in the State of New Hampshire, Jan. 18, 1986).

No one challenged Lamprey's finding; no landowner submitted a "before and after" property value appraisal to the NH Site Evaluation Committee (SEC). Indeed, in issuing the construction permit for Phase 2, the SEC specifically noted that "no contradictory evidence was introduced to rebut Mr. Lamprey's testimony" (p.15) that the project would have negligible effect upon property values.

That was then; this is now. Following is a timeline of the very different trajectory that the discussion of property value impacts of the proposed Northern Pass project has taken between April 12, 2011 and November 1, 2012.


April 12, 2011. James G. Dannis and Alexandra M. Dannis file an EIS scoping comment that consists of a certified appraisal of the impact of the proposed Northern Pass alternate route, which would bisect selected parcels of their land in Dalton. The appraiser, James C. Walker, White Mountain Appraisals, Inc., finds that the bisected parcels would decline in value from 63% - 92%. Mr. Walker notes that "parcels bisected by an HVTL line are a special case in which the entire parcel is changed dramatically. The highest and best use is often degraded from residential use to ancillary use" (p. 52), essentially to land that an abutter might wish to acquire inexpensively.

April 26, 2011Northern Pass posts a blog, "Appraising Appraisals . . .," that questions the analysis and credibility of the Dalton appraisal. The blog links to a 2008 "study of studies" by appraiser James A. Chalmers that finds average impacts of power lines on property values in the 3% - 6% range. The studied studies draw their source material from Illinois, Washington, Nevada, California, Missouri, New York, Maine, Connecticut, Minnesota, Tennessee, several Canadian provinces, and New Zealand. (Chalmers's 2008 study was republished in an appraiser journal in 2009.)

May 27, 2011. Brian C. Underwood, appraiser and chair of the New Hampshire Real Estate Appraisal Board (NHREAB), submits a "preliminary study" commissioned by Northern Pass on the effect of HVTLs in the towns of Deerfield and Littleton. Underwood does not appraise but reviews sales and other data for eight properties in Deerfield and Littleton and concludes that there is no "market evidence . . . that would indicate diminution of property value due to high voltage transmission lines."

June 2011. Northern Pass's law firm files a complaint with the NHREAB against James Walker for acting unprofessionally and claims that his appraisal of the Dalton property may have "unfairly" harmed Northern Pass. (NHPR's Chris Jensen reports the story here.)

July 6, 2011. Northern Pass posts a second blog on property values, "Deerfield Takes a Look at the Northern Pass," that links to a Union Leader article reporting how the Town of Deerfield engaged its assessing office and contracted an engineering firm, Avitar Associates, to gauge how the proposed HVTL project would impact property values. They conclude that six properties would be "directly affected," with another 57 "marginally affected." No percentage values of decline are assigned.

July 25, 2011. Northern Pass posts a third blog on property values, "Considering property value impact." It links to another "study of studies," by Russell Thibeault, commissioned in 2011 by Northeast Utilities. Thibeault's review of the literature concludes that prior studies, including Chalmers's, find that HVTLs have a "modest or no measurable impact upon property values." Thibeault also includes the caveat that "your mileage may vary." The blog also links to Underwood's "preliminary study" report (see May 27, above.)

January 20, 2012. In its January 2012 promotional newsletter to landowners with PSNH rights-of-way, Northern Pass summarizes Underwood's study and says that its finding are consistent with prior research and published reports such as Chalmers's (2008).

May 9, 2012. Responsible Energy Action LLC (REAL) posts a blog, "Northern Pass's Appraisal Expert Recants and Zaps Northern Pass," reporting on a new, 2012 study by Chalmers that radically revises the conclusion of his 2008 "study of studies" first cited by Northern Pass on April 26, 2011. Now, Chalmers finds that rural residential land near HVTLs in Montana declines in value up to 50%.

May 25, 2012/May 29, 2012. Northern Pass posts a response to REAL's May 9th blog, revises it a few days later, and reposts it as "Revisiting Property Value Impact." The blog implies a difference between the rural residential properties in Chalmers's 2012 study (Montana) and those in New Hampshire.

October 8, 2012. Andrew Smith, Broker/Owner, Peabody & Smith Realty, Inc., Franconia NH, testifies by letter to the 361 Commission. Smith notes that the proximity of the proposed Northern Pass line "taints" actual properties in New Hampshire, either making them unmarketable or reducing values between 25% to 50%.

November 1, 2012. NHPR reporter Christopher Jensen interviews Chalmers for an article on the complaint brought by Northern Pass's law firm against James Walker's appraisal of the Dalton property. Chalmers says to Jensen that property value declines of 50% - 60% or more are credible in certain cases:

“If it is basically a view lot and your view is down the valley and you string transmission lines across that valley right in the middle of the view shed and that becomes kind of the dominant feature of the view, I can easily imagine your $200,000 second home might only be a $75,000 second home or a $100,000 second home -- something like that,” [Chalmers] said.

November 4, 2012. Northern Pass spokesman Michael Skelton dismisses the testimony of two owner/broker realtors (including Smith, Oct. 8, above) about the proposed project's impact on property values as the opinions of people "who are openly opposed to Northern Pass" and are not "licensed appraisers"