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The Indiana Soybean Alliance (ISA) commissioned the Indiana Business
Research Center at Indiana University to study if the proximity to a
regulated livestock operation (RLO), which includes Confined Feeding
Operations (CFOs) and Concentrated Animal Feeding Operations (CAFOs),
has an impact on residential and farm property values in Indiana.
Regulated livestock operations (RLOs) can have a small positive
effect on nearby residential property values in rural areas, according
to the new Indiana University study.
The study, produced by the Indiana Business Research Center (IBRC)
for the Indiana Soybean Alliance (ISA), bases its results in part on an
analysis of real estate transactions in three Indiana counties between
2000-2006.
Specifically, the researchers examined the effects of RLOs, known
as concentrated animal feeding operations (CAFOs) and confined feeding
operations (CFOs), on residential property values.
Researchers reviewed real estate transactions in Decatur, Hancock
and Shelby counties -- each of which had a sufficient concentration of
regulated livestock operations and property sales transactions to yield
a rigorous statistical analysis. Unlike many past studies that used the
appraised property value, this study used the market price of 7,849
real estate transactions.
Among the study's findings:
- An RLO within one mile of a non-town residence increased sale price by $12,700.
- Every 100 market-mature hogs on RLOs within one mile of a non-town residence reduced sale price by $550.
- As a ballpark estimate, therefore, a 4,000-head RLO of
not-yet-mature hogs within one mile of a non-town residence would have
no net effect on sale price (assuming there were no other RLOs within
three miles).
- In-town residential properties were more affected by proximity to
an RLO and were more affected by being downwind of an RLO than a
non-town property.
- Proximity to beef cattle tended to have a positive effect on sale price while dairy cattle tended to have a negative effect.
Timothy Slaper, co-author of the report and director of economic
analysis for the IBRC at IU's Kelley School of Business, said the
study's findings present a complicated picture.
"A definitive negative impact on property values could not be
supported statistically," Slaper said. "The relative sensitivity of
town versus rural properties to the proximity of a RLO is noteworthy.
An RLO can have a positive effect on property value in rural areas. In
contrast, close proximity to an RLO most likely has a negative effect
on property values for in-town residences."
Another component of the study was a survey of real estate
professionals about their perceptions of the effects of RLOs on
property values. Most respondents said they believed RLOs reduced
nearby residential property values, although real estate agents had a
more pronounced negative perception than real estate appraisers.
"The study reinforces the fact that assessing the impact of an RLO
on property values is very complicated and to make unsubstantiated
statements that any or all CAFOs and CFOs have a negative impact on
property values is not supported by the study findings," said ISA
Interim Executive Director Jane Ade Stevens.
The study also showed that the effect of RLOs had on town or
non-town/rural residences primarily depended on the concentration and
type of livestock, distance to closest RLO and prevailing wind
direction.
Slaper acknowledged that the study's findings are somewhat mixed.
"The transaction data do not support an unambiguous answer," he said.
"The data do advance the discussion, however, by highlighting the
nature and source of the economic effects associated with the placement
and size of regulated livestock operations."
Slaper also highlighted the fact that the results from this study
cannot be used to measure effects in other counties, states or regions,
or over a different period of time.
"We appreciate that this data provides us a snapshot of a moment
in time in these three counties," Stevens said. "ISA commissioned the
study because Indiana's livestock and poultry industries are the
soybean farmer's number one customer for soybean meal and critical to
Indiana's soybean farmers' future."
The complete report is available online at www.ibrc.indiana.edu/studies/RLOs_and_Indiana_Property_Values.html.
Copy of News Release:
http://newsinfo.iu.edu/news/page/normal/8901.html?emailID=8901
Questions and answers provided by ISA.
Contacts:
Tim Slaper
Indiana Business Research Center
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812-855-5507
Megan Kuhn
Indiana Soybean Alliance
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800-735-0195
George Vlahakis
University Communications
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812-855-0846
IU News Room
530 E. Kirkwood Ave., Suite 201
Bloomington, IN 47408-4003
Email:
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Web: http://newsinfo.iu.edu
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