Thursday, September 20, 2012

Who owns the view?

Wind industry big lies no. 2: your property values will not be affected…

Funny that property values is used as the trump argument on both sides of the debate about windfarms! Nevertheless, the article obliquely raises some interesting LVT issues. If a landowner gets a big financial gain from subsidies to put in windfarms, but it is to the detriment of nearby homeowners, who should pay? If the council controlled both, and saw its LVT go up markedly from the windfall land, but go down even more from each of the nearby properties, the council would decide that a windfarm was not the best use of resources.

Posted by ontheotherhand @ 04:10 PM (1250 views)
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7 thoughts on “Who owns the view?

  • OTOH, correct.

    Assuming a reasonably competent government there would be no subsidies for windmills. If they still make economic sense on windy hill tops, then a reasonably competent council would look up what happened to residential land values in other areas where they put up windmill and then it would weigh up the potential pluses (extra income from windmill, which is change of use) and minuses (slightly lower rental values, possibly).

    Because as we well know, LVT leads to the optimum use of land and automatically balances claims and interests of landowners between themselves and between landowners and the excluded.

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  • Mark,
    Your reasoning would go through were it not for the fact that the financial NPV calculation on which the windfarms will be assessed begs the question against renewables. For example, if the hypothesis is that fossil fuel development has to decline (because of peak oil) then the assumptions about interest rates in the NPV calc will not hold (because economic growth will falter). A similar argument can be made on climate change grounds.
    N

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  • NickB, if people are confident that oil will run out and so on, then that means they are more willing to invest in wind farms and they can choose their own estimates of electricity prices and their own interest rates to calculate NPV, can’t they? Not up to me to tell them how to work out whether a business is viable.

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  • Mark,
    I think you overestimate people’s rationality and time they have to do research on things like that. Most people, I think, would say its the duty of policymakers to get clued up on that. Rather than relying on some institutionally standard NPV calcs which happens at present.
    N

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  • NickB, look, every business has to make its own estimates of which projects are worth while. Wind mills might be worth while, they might not. That’s up to the person who wants to invest in wind mills to calculate, using their own forecasts of wind strength, electricity prices, maintenance costs, interest rates and so on. Oil companies manage to forecast twenty or thirty years ahead using a much wider range of possible variables to decide whether a particular well is viable or not. They manage without “institutionally standard NPV calcs”, they’ve got their own (and they are prized trade secrets, I happen to know).

    And then, now our wealthy farmer has decided how much money he can make by simply being in the lucky position of owning land which is suitable, he goes down the council and asks what the LVT/Business rates bill would be if he gets planning for his wind mills, if the council gives him a low enough number, then he’s in business.

    This is exactly the same for any other business which wants to extend its premises, they have to negotiate the approx. Business Rates bill beforehand, I don’t see why wealthy farmers need special treatment one way or another.

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  • wind turbines are really noisy if you are near them, so yes it would devalue a house, but more so it will effect the quality of life, there is no reason they can’t build them all at sea and pay the royals for leasing the seabed

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  • Mark,
    Look yourself.
    Energy is not like any other good. It’s the master resource; we can’t afford market failure there. If we get the energy sector wrong people may starve in future. It also has substantial public good elements because of the infrastructural underpinnings of the market (e.g. grid, interconnectors for renewables and so on). So you can’t leave it to “private markets”.
    Strategic decisions about the energy sector are being made by numpties in a council near you (and in fact the government, thanks to the Green Book) based on completely arbitrary assumptions about future economic growth and interest rates. Fact.
    N

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