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Thursday, December 19, 2013

New study on shale gas development and property values finds mixed results

A new study from Resources for the Future finds that shale gas development affects the value of nearby homes differently, depending on distance from a well, how long ago the nearby well was drilled, and whether the home relies on a well for its water supply.

The Housing Market Impacts of Shale Gas Development used data from New York and Pennsylvania and finds that: 
For homes that depend on groundwater, the closer they are to a shale gas well, the worse off they are (e.g., at 1.5km, a shale gas well decreases values by 4 percent but at 1km it decreases values by 22 percent).
For homes that have access to piped water, being within 1.5km or 2km increases their value (by 3 to 6 percent), likely due to royalty payments, but being closer (i.e., within 1km) does not affect values.
At a regional level (within 20km), recently drilled wells have a positive effect on property values. This “boomtown” effect, however, is temporary and fades one year after the well’s drilling.
The results are not surprising, but the research is important to understanding the complex impacts of shale gas development.


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