“Rocky Mountain Not-so High: Oil, gas wells drive down Colorado home values, reveals WVU research” – WVU Today

WVU Today, 11/12/19

After researching the impact of shale development on housing prices in Colorado, two WVU researchers stated that, “We find that shale development activity lowers housing prices, providing some evidence that residents in Colorado negatively value this activity.” This was “particularly for houses with private water and close proximity to the mountains.”

Their research was just published in the peer-reviewed academic journal “Growth and Change.” They chose to do the research in Colorado to see if the results would be different from those of a well-known Pennsylvania study.

WVU’s Dr. Stephens stated, “An expansion of oil and gas production in an amenity‐rich area will affect the natural capital of the area, thus there is a substitution effect between increased growth from shale oil and gas development and a reduction in the value of amenities.”

At the City and County of Broomfield’s (CCOB) November 7 Study Session, the first report on CCOB’s own Property Value Impact Study focused on impacts caused by development of Extraction’s Livingston Pad and the analysis of property values in Anthem Ranch within one mile of it. Its conclusion was that further study was needed due to limited available data and that another update would be provided in June 2020. 

Here is further information from the WVU study:

“Household valuation of energy development in amenity‐rich regions”
By Heather M. Stephens and Amanda L. Weinstein, WVU

“The juxtaposition of oil and gas wells against the Rocky Mountains on Colorado’s Front Range provides a picture of the complicated interaction between Colorado’s natural resources above and below ground. As hydraulic fracturing has increased oil and gas development—bringing jobs and money to an already highly sought after amenity‐rich area—it has also increased concerns about the impact on natural amenities, such as water quality and mountain views. Using data on housing sales between 2006 and 2014, we estimate how shale development is capitalized into housing prices in a booming market when households are in close proximity to other natural amenities. We find that shale development negatively impacts house prices, more so for houses with private water and houses that are closer to the mountains, but that competition for land along the Front Range has driven up house prices overall in the region. Our results also suggest the policy responses to shale development may differ for growing, amenity‐rich regions.”

The full text is accesible here: