Wednesday, 31 October 2012

For every appraisal there is an equal and opposite appraisal

In the last few weeks, Ben Lansink released two documents on the Wind Concerns Ontario and Ontario Wind Resistance websites.  Mr. Lansink is an accredited appraiser and declares that his documents have been published without prejudice and that they are fair, impartial analyses. 

Other than his accreditation, nothing could be further from the truth.

We'll expose his bias in three sections:

         1. Motivation
         2. Data manipulation
         3. Omission of Press influence

1. Lansink's motivation

Mr. Lansink's firm specializes in creating evidence for law suits involving perceived losses in property value.  It's called "diminution".  It’s typically used in expropriation cases, where the appellant is attempting to increase the payment for their property. 

According to his website, "Ben specializes in Diminution in Value analyses and the resulting Injurious Affection. His assignments include proximity to airports, hydro power transmission corridors, land fill sites, wind turbines, roads and road works, as well as contaminated land and buildings including urea formaldehyde foam insulation".

So, a logical question might be, “Why would Mr. Lansink choose to perform all this research and then initially publish it on the Ontario Wind Resistance and Wind Concerns Ontario websites?” An impartial expert with solid balanced arguments might have considered developing more traction by using either the mainstream press or reputable academic journals or magazines to present his case.

The answer to this question may come from the relationship between Mr. Lansink and Eric Gillespie, and Mr. Gillespie’s relationship with wind opponents.  Eric Gillespie is the lawyer who has acted for a host of wind opponents and is closely associated with Wind Concerns Ontario (WCO). There have been a number of lawsuits launched recently by Mr. Gillespie against wind developers and their hosting landowners; all of which include property devaluation as part of the argument (e.g. Wiggins v. Fairview, Norfolk Wind Concerns v. UDI Renewables, Parent v. River Canard Energy).

Eric Gillespie and Ben Lansink appear to have assisted a common client in the past (Red Hill Valley Neighbourhood Association) and Mr. Gillespie refers to Lansink’s work in a letter to Canada’s Attorney General.

In addition, at least one source has described Mr. Lansink's presentation to an anti-wind group in which he confirmed his association with Mr. Gillespie.

Given this information it is reasonable to assume that Mr. Lansink’s report is intended to support Mr. Gillespie’s initiatives in the courts and wind opponents’ public position. Whether they are “fair and impartial” is another question that may only be answered in the courts   

2. Lansink's manipulation of data

Mr. Lansink appears to be selective with the limited data he uses in his case studies and presents, as a basis for his conclusions, information from a few isolated home sales.   This would be in contrast with following the most basic notions of random sampling or full transactional analysis from which solid impartial experts typically derive their conclusions.

In Melancthon, for example, he chooses five properties that were bought by a developer (Canadian Hydro Developers - CHD) and then sold after the project was completed. He cloaks those situations as a classic buy-resell case study and attempts to create a valuation based on the following methodology:

1.    Assume that the purchase price was at fair market value.  In truth, CHD purchased all properties at over 50% premium to market values – as represented by MPAC assessment data (Table 1).

Table 1 Sales price vs. assessment value for Lansink’s Melancthon properties (1st sale)

Sale price
Sale date
Assess. Year



Source: Lansink, MPAC

2. Assign a price escalator from "comparable" markets - in this case the greater Dufferin area.  However, the greater Dufferin area includes Orangeville, a market that's been on fire as a sleeper for Toronto, as well as Amaranth, a sleeper for Orangeville.  As a result, Lansink’s calculation of the increase of value due to the passage of time may be aggressive.

3. Assume that the properties were also sold at fair market value.  In aggregate, this may be close to the truth.  CHD had used a number of the properties for their project staff for a couple of years, lowering their cost of housing staff and construction workers, versus hotel, motel and travel alternatives.  Once the project was fully commissioned the operator had little on-going use for the properties and sold them.

In three cases, the properties either sold at their asking price or close to their assessed value (Table 2). 

Table 2 Sales prices vs. assessment value for Lansink’s Melancthon properties (2nd sale)

Sale price
Sale date
Assess. Year



Source: Lansink, MPAC
* Assessment data not available for 2009

Two properties were likely sold below market value because of their uniquely heightened association with wind turbines.  Wind opponents who used these transactions to create a firestorm of media coverage that detailed their perceived health problems dramatically highlighted that association.  A search of the seller’s name + wind on the Internet yields over 500 citations.  One is actually used in the Lansink document.  Obviously, wind opponents’ actions devalued these properties by their unsupported statements.  Selling that house after such a mauling in the press would be like selling a haunted house.

In contrast, a search of the successful buyers’ names yields no mentions of any such complaints.

One case study "analysis" is highly suspect.  The original landowner was holding up an OMB hearing that was ruling on CHD's project.  In the hearing, CHD had made adjustments to the project in accord with the concerns of the municipalities and other landowners.  For this particular landowner CHD agreed to purchase his property (OMB PL0605653 Minutes of Settlement).  The residence condition was deemed uninhabitable and was subsequently demolished.  This fact was omitted in Lansink's appraisal.  He compares the above market price of the property when originally purchased with the market value price of the raw land when it was subsequently sold.

Of course, there remains the question about the hundred or so other transactions that occurred in the area in that time frame.  Those transactions were conventional single buyer-seller transactions, much like those included in the following analysis, but they were excluded for some reason.   A subsequent blog will explore these transactions in more detail.

So, in summary, the prices paid by CHD for these properties were sufficiently over-market to negate all the claims of devaluation stated by Lansink, and the sample used so small and selective that the conclusions drawn were clearly biased and wrong.

In Clear Creek, Mr. Lansink chooses seven properties that were sold in the area of a project.  In contrast with his previous methodology described above, only two were buy-sell situations.  A number of obvious questions arise:
1. Were these the only properties sold? Were other properties, at similar distances from turbines, sold in the area (e.g. Jacksonburg, Houghton Centre, Hemlock)?
         2. Is the residential price index for the broader county relevant to this group of properties?
         3. Did wind opponents pollute their property values through their hysterical reactions to the media?

If these properties are truly indicative of the nature of sales in the micro-area, then there may be evidence of diminution.  However, this is another area that was ground zero for health effect claims.  A group called "Norfolk Victims of Industrial Wind Turbines” had extensive press coverage.  A search for the leader of the group ("stephana johnston"+wind) yields over 800 citations.  As one commentator noted, " Also, Stephana Johnston, 81 has now guaranteed no one will buy her house as she's publicly stated that the turbines make it impossible [for her] to sleep there."

We are analyzing the Clear Creek transactions and will publish more conclusions in a further post.

3. The influence of media's amplification of wind opponent hysteria

A number of independent appraisals were performed in the early to middle stages of wind turbine development in Ontario, for example:
         • Stantec for Canadian Hydro Developers [Melancthon], 2006
• Blake, Matlock & Marshal for Windrush Energy [Melancthon, East Luther], 2006
         • S. Rayner for Canadian Hydro Developers [Wolfe Island], 2007
         • University of Guelph Master of Science Thesis [Melancthon], 2009
         • Canning & Simmons for CanWEA [Chatham Kent], 2010
         • Assessment Review Board ruling on Kenney property [Wolfe Island], 2012

Outside of Ontario, a 2009 landmark study by the Lawrence Berkeley National Laboratory found that “Home sales prices are very sensitive to the overall quality of the scenic vista from a property, but a view of a wind energy facility does not demonstrably impact sales prices”.

All of these studies found no significant reduction in property values before and after the project was constructed. 

However, as wind projects were proposed for cottage areas such as Prince Edward County, the Huron coastline and Grey Highlands, opposition began to grow using bogus logic, and biased media intensity increased.  The umbrella organization Wind Concerns Ontario (WCO) represented most, if not all, of the wind action groups (WAG's).   WCO had sophisticated members and access to professionals (e.g. PR, medical, legal, engineering, etc.) whose cottages, in many cases, were located near these developments.  Within a few months they had developed a very sophisticated and effective PR campaign.  However, in our opinion, these professionals took license with their credentials by not disclosing their cottage locations and by posting opinions that were frequently outside their training.

As an illustration, a search in Google Trends for Ontario reveals a strong and sustained campaign from early 2009 to the present.

Figure 1: Google Trends search for the term “wind concerns Ontario”

Source: Google Trends

Since these WAG's had no evidence that was specific to projects planned near them, they shone a bright light on existing projects.  Anyone with a complaint was sure to be introduced to newspapers, television and radio; and invited to speak at scores of anti-wind lectures throughout Ontario.  As noted earlier, some of those press mentions added up in the hundreds.  Many of them, and their previously unknown small community names (e.g. Melancthon, Ripley, Clear Creek, etc.) became well known.  It is conceivable that this type of media coverage placed downward pressure on property values in a few places.  In contrast, other projects built in the same time frame, such as Chatham Kent and Prince garnered relatively few complaints and little press coverage.

In subsequent legal challenges and Environmental Review Tribunal (ERT) decisions (almost totally represented by Eric Gillespie), not a single case has substantiated any of the claims of adverse health effects.  In fact, health claims seem to have been removed from recent ERT's by the appellants.  Importantly, in cases where residences were sold on the market or purchased by developers and then re-sold, there has always been a willing buyer and no media mentions of complaints of adverse health effects.  Lansink suggests that those buyers have been legally gagged, but no one is able to sign away their rights of redress under common law.  If they were provably suffering, they would still have some form of recourse.

* * *

In summary, Lansink's analysis appears to be significantly biased. While he may turn up some isolated examples of property devaluation, Lansink has failed to show that wind turbines have widespread negative impact on property values.  Moreover, there is plenty of evidence to demonstrate that those suffering from psychogenic symptoms (I.e. those that originate in the mind) may have inadvertently been the root cause of their loss.  They certainly had lots of help from hundreds of activists who used these people, described as "victims", to keep proposed projects from their back yard.  And, some of the media, sensing a good conflict, fanned the flames.