Transmission Lines and Property Value

How do transmission lines affect property value?

When assessing the value of land with existing or proposed power transmission lines, there are many factors that must be taken into account.

There are many variables that can affect the value of your property. The buildings, improvements, surrounding amenities, visual appeal and rights to natural resources all figure in to a thorough assessment of value. But what happens to that value when a utility company plans to build power transmission lines through your property?

Transmission Lines, Easements and Right of Way

Power lines are a necessary part of modern life. In order to transmit the power they produce to their customers, utility companies often have to build their towers and run high-voltage lines through privately owned land. To compensate the landowner, utilities will typically offer a one-time payment for the easement, or rights to access the property. The amount of this payment is based on fair market value for the land occupied by the structures and transmission lines.

The area in which the utility company will build the towers and other structures is known as the Right of Way, or ROW. Usually, the land owner will continue to pay the property taxes for this area. The landowner, along with the utility company and all future owners of the property, is bound by the easement agreement in perpetuity.

How Easements Affect Property Value

However, what the utilities consider fair market value may not take into account the actual reduction in value once the transmission lines are installed. Understanding this loss of value is a complicated process, and involves both quantitative and qualitative factors.

Restriction in Use

In most cases, the uses for which the land is suited are restricted due to the presence of the transmission lines and the utility company’s need to periodically access them. Constructing buildings or other structures in or near the right of way is generally prohibited, depending on the size and scale of the infrastructure.

Loss of Appeal

The process of building the towers and running the transmission lines can effect the property well beyond the actual right of way. The initial presence of equipment and building materials, the clearing of vegetation and timber, and the noise associated with construction and maintenance can all depreciate the value of the land. Once the transmission lines are installed, they can detract from the perceived value of the views and general enjoyment of the property.

The effects of power transmission lines on the health of people and animals is a subject of much debate. Further study is needed for a comprehensive answer to this complicated question. However, there is little doubt that the general public is concerned about this potential hazard, and thus the appeal of property with transmission lines is reduced.

Indeed, in our research we have found a consistent, marked decrease in the value of properties with existing or planned power transmission lines. These properties tend to sell for less than comparable areas without transmission lines, and often sit on the market for much longer.

Get an Accurate Property Analysis

To ensure that the assessment of your property considers all of the relevant factors, be sure to hire an experienced property analyst. Paramount Property Analysts takes a thorough and comprehensive approach to all assessments, and is committed to providing the most accurate analysis possible.