Friday, December 23, 2011

How much will your property devalue?

How much could the U.S. Silica sand mine cost the city of Sparta in lost property value? Millions and millions. Is it really worth it?

Sand mines are so new that there is no research on the impact that sand mines have on property values. At the moment, the only serious research that has been done is on gravel pits and quarries. Below are the results of that research that many consider applicable to sand mines.

There is anecdotal evidence that sand mines do hurt property values. Click here to see a video of a Tunnel City land owner in the town of Greenfield telling the town board that his property is now worth half what it was before the sand mine was announced. And one Tomah realtor says that while sand mines typically buy neighboring property to maintain good relations with the community, those on the fringe--not close enough for the sand mine to buy their property but close enough to see the mine--will see their property values fall. Meanwhile, see below for research about gravel pits and sand quarries.

Click here for one study showing that putting in a gravel pit or rock quarry can devalue homes by up to 30 percent, depending on how close they are to such a mine. The assessed value in January 2011 of just three of the subdivisions at the sand mine's doorstep was more than $17 million last year. Now, take 15 to 30 percent off that. Thirty percent will cost the city $5.1 million in lost property value. Fifteen 55percent would cost the city 2.55 million. Those are conservative numbers. One landowner near the Tunnel City mine saw the value of his property plummet by 50 percent in the weeks after the news of the mine broke. And that is if you can sell your house. One national survey of potential homebuyers found the environmental concerns are one of the most important factors going into that buying decision.

The Sparta sand mine will be right next to one of the most densely populated--if not the most densely populated--parts of Monroe County. The southwest corner of Sparta--where the sand mine will be--is where most of Sparta’s growth has been concentrated for the last decade. If you live in the Riverwood Estates, River Trail, Aspen Fields, Pfaff or Sparta Meadows subdivisions, you are facing a property value loss of 15 to 30 percent. And that is being conservative.

Want to check the math? Click here for Aspen Fields, here for River Trail and here for Riverwood Estates.

See below for a link to one study.

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