| Tuesday December 19th, 2006 |
| It Pays to Live on a Flowing River |
When a dam is slated for removal, people with homes on the millpond behind the dam often worry their property values will decline if the pond is drained, and their water “reduced” to the river that created it.
 But according to the results of a recent economic analysis of property sales around millponds and rivers in southeastern Wisconsin, millponds may not be the economic assets people believe they are.
Link to the study results here.
The study, conducted by UW Madison economist Bill Provencher and commissioned by the River Alliance, compared the sales of properties in 13 communities in three settings – properties that lie within a ¼-mile of an existing millpond; a former millpond where a dam had been removed; and a river that has been free-flowing for at least 20 years. The authors found that:
• Removing a dam does little harm to property values in the short run (two years in the study). In fact, dam removal helps increase property values in the long run
• Shoreline frontage along small millponds does not notably increase residential property value compared to frontage along free-flowing rivers
• A residence located near a free-flowing river is more valuable than identical property located near a pond. The study estimated that property located within a ¼ mile of a free-flowing river would be worth, on average, $14,000 more than a similar property near a recently removed dam or current pond (also known as an impoundment).
“No one has looked at this question of how dam removal impacts property values quantitatively. Most information has been anecdotal,” says Provencher, an economist who specializes in natural resource economics. “Wisconsin has a long track record of removing obsolete milldams, which makes this state a natural location to examine impacts across many communities all within the same real estate market.”
The study also found that in communities built around mills and the ponds the milldams created, property values decreased the closer they were to the water.
“When you think of our history, it makes perfect sense,” says Denny Caneff, River Alliance executive director. “In mill and manufacturing towns, rivers served as open sewers where everyone dumped their waste. Desirable residential neighborhoods were rarely located near the water.”
“This is important work for many reasons,” says Helen Sarakinos, River Alliance Dams Program Manager. “Our homes are often the biggest investment we make and residents had a legitimate concern about losing value on their home because of a dam removal. I hope the results of this study will help people make more informed decisions about the cost and benefits of dam removal.”
Wisconsinites have traditionally focused on the economic and quality of life benefits of our 14,000 lakes. This study points to the value of clean, free-flowing rivers as an economic asset to homeowners and communities as well.
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| Article Posted by Administrator |
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