A: We put this question to David Passmore, a retired economics professor at Penn State who has studied the economics of the Shell plant on the regional economy.
He said that studies show a variety of results on the impact industrial facilities have on nearby real estate values. “Concerns for some buyers might include the concern for air and water quality, the specter of health risks, distress about noise and congestion, and the possibility of hazardous events,” Passmore said. “The presence of pipelines, equipment, and other plant infrastructure can affect property values by detracting from the attractiveness of a locality.”
In general, he said, studies have reported that real estate values are harmed by proximity to a major petrochemical plant. The further away from the plant, the lower the effect on home prices.
One Louisiana study found “few effects on housing prices…over a 13-year period.” However, “values temporarily turned negative in the face of public notoriety resulting from a storage tank explosion. Just perception of risk, not necessarily the occurrence of a problem, can affect property values,” Passmore said.
Passmore said not all industrial sites are created equal: how a plant is managed and how well problems at the plant are addressed can significantly affect nearby housing prices.
“In one study, emergency planning and quick and competent responses to issues at a Superfund site helped reduce the impact on property values by instilling confidence that problems were under control and would be solved,” Passmore said.
“Planning and response for the Shell complex are within the control of Shell, its regulators, and community responders. Your property is unique in its location and condition. Factors such as school quality, commuting time, or crime risk can affect housing values.” As always, he said, seek real estate advice from a reputable source in your area.
