Housing Market Impacts of Unconventional Oil and Gas Development
We review the housing market impacts of unconventional oil and gas development, focusing on studies that assess changes in home prices related to proximity to development, lease clauses, rental rates, farm values, and tax base changes.
Figures
Figure 1. Willingness to Pay Estimates for Wells of Well Pads within X km of a Home
Figure 2. Price Gradient of Distance from Future/Current Well, Using Groundwater Dependent Areas
Source: Muehlenbachs, Spiller, and Timmins (2015).
Key findings
- We review 16 studies, with the majority of these studies conducting hedonic analysis to isolate the effect of unconventional oil and gas development on home prices.
- We find that the literature on the nearby housing market impacts of unconventional oil and gas development is relatively conclusive, meaning several high-quality studies report comparable findings.
- The studies show strong evidence for decreases in value, up to –$33,843, or –26.6 percent, for groundwater-dependent homes within 2 kilometers of a well pad, though this number varies by distance to a well or well pad and across studies.
- The studies also show strong evidence for smaller increases in housing value for those with piped water, up to $4,802, or 3.4 percent, depending on distance to a well or well pad and study.
- The only study able to account for mineral rights ownership directly finds a decrease of over –$60,000, or –35 percent, for homes without mineral rights.
