Wind Turbines MPAC v. Lansink Value Diminution – June 2014
Click here for Diminution in Price Wind Turbine Influence Full Report
Real Estate Appraisers & Consultants – A Division of Wellington Realty Group Inc.
ben@lansink.ca 519-645-0750
- A Report by Ben Lansink titled
Wind Turbines Melancthon Clear Creek MPAC
Diminution in Price, Current Value
February 15, 2013 - Comments by Michael McCann
Michael McCann is a Chicago based appraiser who has been legally qualified numerous times as an
expert witness on property value diminution resulting from industrial scale wind turbine projects in
close proximity to residential property. - MPAC Study Titled
Impact of Industrial Wind Turbines on Residential Property Assessment
In Ontario 2012 Assessment Base Year Study
Dated April 26, 2014 - Technical Review by Wayne Gulden
MPAC throws up, by my count, 7 objections to Lansink’s methodology; of which exactly zero actually
indicate that Lansink’s numbers are wrong.
Gulden 2014.
Report Date : June 2014
Table of contents
Hwy 89, Melancthon Township, Ontario, Canada
Photograph by Ben Lansink
Ben Lansink’s Study Melancthon Clear Creek 2013
| Conclusion: Clear Creek, known as Frogmore-Cultus-Clear Creek, about 18 Wind Turbines |
||
|---|---|---|
| 1 | 1480 Lakeshore Road, Norfolk | -44.17% |
| 2 | 71 Norfolk County Road 23, Norfolk | -55.18% |
| 3 | 47 Concession Road A, Norfolk | -22.47% |
| 4 | 43 Old Mill Road, Norfolk | -32.96% |
| 5 | 1575 Lakeshore Road, Norfolk | -27.67% |
| 6 | 1527 Lakeshore Road, Norfolk | -28.88% |
| 7 | 1921 Lakeshore Road, Norfolk | -38.48% |
| Median | -32.96% |
| Average | -35.69% |
| Low | -22.47% |
| High | -55.18% |
| Conclusion: Melancthon, 133 Wind Turbines | ||
|---|---|---|
| 1 | 375557 6th Line, Amaranth | -48.27% |
| 2 | 97121 4th Line, Melancthon | -58.56% |
| 3 | 504059 Highway 89, Melancthon | -23.24% |
| 4 | 582340 County Road 17, Melancthon | -26.66% |
| 5 | 582328 County Road 17, Melancthon | -37.30% |
| 6 | ||
| 7 | ||
| Median | -32.96% |
| Average | -35.69% |
| Low | -22.47% |
| High | -55.18% |
None of the above properties considered in this report had a wind turbine erected on it. Registry facts
and MLS® listings (if available) for these properties were obtained and are on file.
The Melancthon properties and neighbourhood were inspected and photographed by Ben Lansink on September
20, 2012. The Clear Creek properties and neighbourhood were inspected and photographed by Ben Lansink on
October 9, 2012.
MPAC 2012 Base Year – Study 2014
The Municipal Property Assessment Corporation (MPAC) commissioned this study of the effects of
industrial wind turbines (IWT) on the current value of property in proximity to the turbines. Over
the last few years, the subject of IWTs has been the subject of a number of reports and studies –
both in Canada and worldwide. Past and current studies undertaken by both academics as well as real
estate and health professionals have focused on the potential impacts of IWTs on property value and
health. Given MPAC’s legislated mandate, this report focuses on the potential impact of IWTs on
property values.
MPAC’s study concludes that 2012 Current Value Assessments (CVA) of properties located within
proximity to an IWT are assessed at their current value and are equitably assessed in relation to
homes at greater distances. No adjustments are required for 2012 CVAs. This finding is consistent
with MPAC’s 2008 CVA report. The 2012 CVA study also found that there is no statistically
significant impact on sale prices of residential properties in these market areas resulting from
proximity to an IWT. The study underwent a rigorous independent third-party peer review and includes
appendices describing the study parameters and documenting the analyses.
To further confirm its findings, MPAC also conducted an additional analysis using approximately 2,000
sales and re-sales following similar logic to the Lansink study. The main differences between the
February 2013 Lansink Study and MPAC’s re-sale analysis is the sample size and the determination of
the increase in the market between re-sales. Using 2,051 properties and generally accepted time
adjustment techniques, MPAC cannot conclude any loss in price due to the proximity of an IWT.
Appendix G includes the re-sales analysis.
MPAC did find evidence that wind turbines cause property value declines; however, MPAC
seems to conclude that impacted properties are equitably assessed even in relation to homes at greater
distances.
Given the actual market evidence readily available that supports value diminution if a
residential property is within the influence of a Wind Turbine, the MPAC report is misleading to the
public and to political decision makers.
Notwithstanding that MPAC states:
MPAC’s study concludes that 2012 Current Value Assessments (CVA) of properties located within proximity
to an IWT are assessed at their current value and are equitably assessed in relation to homes at greater
distances. No adjustments are required for 2012 CVAs.
MPAC may be correct in that properties located within a specific area, 1 km, 1km to 3km, 2km to 5km, and
outside 5km, are equitably assessed within each specific area, however MPAC’s work, 2012 Current Value
Assessments, and MPAC’s actual Time Adjusted Sale Prices, both clearly support about $171,000 average
assessment/price at setback of less than 1km and $228,000 average assessment/price at setback outside
5km.
This means typical value diminution is $57,000 if within 1km vs. 5km.
The MPAC study clearly concludes that properties situated within the influence of a Wind Turbine sell for
less than a property not located within the influence of a Wind Turbine.
Yet MPAC is saying diminution is not an issue if they assess each area the same.
The MPAC study concludes diminution in value ranging from 21.1% if the setback is 3 to 5 km, 26.3% if
the setback is 1 to 3 km, and 25.0% if the setback is less than 1 km.
It is reasonable to assume MPAC could NOT have assessed all properties influenced by a Wind Turbine
equitably as of the value date January 1, 2012.
The most recent current valuations were carried out by MPAC in the 2010-11 period leading up to January
1, 2012 when there was virtually NO evidence of value diminution available to MPAC. Wind Turbines are a
NEW phenomenon in Ontario. The first turbines were constructed circa 2005-2008 in Melancthon. The MPAC
2012 Base Year study is dated 2014 which is long after the assessments for all properties in Ontario as
of the 2012 Base Year had been concluded.
However, with the passage of time, and with appeals to the Assessment Review Board, and as sale-resale
evidence is documented, it is assumed MPAC will read the market place and make adjustments resulting
from the influence of Wind Turbines.
The Future :Given that wind turbines are a relatively new phenomenon in
Ontario (since 2005), it may be that in the future a buyer will simply refuse to purchase a property
within the influence of a Wind Turbine. If there is no buyer, there may be no value.
Michael McCann E-Mail April 26, 2014
Mr. McCann is a Certified Real Estate Appraiser. He has 30 years of specialized experience in evaluating
property damage claims. Since 2005, Mr. McCann has studied the impact of industrial wind farms on nearby
property values, testifying as a qualified expert witness as to his findings in the market. Mr. McCann
has stated:
I have discussed Mr. Lansink’s study with him and have carefully reviewed his report. I concur with
his valuation findings, and the reliable nature of the evidentiary value of the resale data in
question
On balance, Mr. Lansink’s study is based on the most reliable type of data, since the buyers each
had to grant back to the seller/developer an Easement in Gross, allowing the very types of noise,
vibration and flicker effect impacts which are commonly experienced and reported near wind turbines,
and they were sold by the wind developer for 39% lower on average than the no-turbine market value.
My independent review of the literature on this subject has been fairly exhaustive, and the credible
studies researched by professionals who honor the requirement of no bias are all pretty consistent
with Mr. Lansink’s research, as well as my own findings. However, the studies commissioned by the
wind industry tend to conveniently overlook or disregard the most important nearby sale data, and
draw their conclusions from thousands of “pooled” sales from 5 – 10 miles away from turbine
projects.
Mr. Lansink’s study is far from the single example of impacts. Indeed, quite the opposite. Claims of
“no impact”, in my professional experience and opinion, are unreliable, misleading to the public and
to political decision makers.
From : Michael
McCann
Sent : Saturday, April 26, 2014 11:17 AM
To : Ben Lansink
Subject :
Ben,
See Wayne Gulden’s review of MPAC. Wayne is a retired engineer, a very sharp thinker with an
excellent
working knowledge of statistical analysis, and he writes well too.
His website is http://windfarmrealities.org/mpacs-2012-study
He has read your report too, and finds it
to be transparent and meaningful.
Clearly, MPAC had the goal of doing a hatchet job on your work, and their review is weak and
unprofessional at best. Given that their raw data supports the distance related impacts you and I
have
both found using paired sales and resale analyses, and they don’t even mildly allude to this glaring
inconsistency with their “impact” opinion, they are also misleading.
Wayne also has written reviews of Canning/Simmons, who did some rather loopy analysis for CanWEA,
and
Hoen’s 2009 LBNL report.
Wayne is spot on with all his remarks and insights into how those “studies” were conducted.
Let me know if I can be of any assistance, as a second set of eyes.
Regards,
Michael S. McCann
Wayne Gulden 2014 Technical Review MPAC’s 2014 Wind Turbine Report
Last week the Ontario Municipal Property Assessment Corporation (MPAC) released the 2012 version of
their continuing study (following one in 2008) of wind turbines and property values in Ontario, entitled
Impact of Industrial Wind Turbines on Residential Property Assessment In Ontario. To sum it up, they
still find no evidence that wind turbines cause property value declines.
The study consists of a 31-page main section along with 12 appendices. MPAC seems to have their
own
language and it isn’t easily penetrated by a layman. I’ve read over it carefully several times and there
are still aspects of it that escape me. The appendices are generally beyond anyone who is not a
professional. On page 4 they state their goals for this version of the study:
Specifically, the study examined the following two statements:
- Determine if residential properties in close proximity to IWTs are assessed equitably in
relation to residential properties located at a greater distance. In this report, this is
referred to as Study 1 – Equity of Residential Assessments in Proximity to Industrial Wind
Turbines. - Determine if sale prices of residential properties are affected by the presence of an IWT in
close proximity. In this report, this is referred to as Study 2 – Effect of Industrial Wind
Turbines on Residential Sale Prices.
Their two main conclusions, on page 5, are:
Following MPAC’s review, it was concluded that 2012 CVAs of properties located within proximity of an
IWT are assessed at their current value and are equitably assessed in relation to homes at greater
distances. No adjustments are required for 2012 CVAs. This finding is consistent with MPAC’s 2008
CVA report.
MPAC’s findings also concluded that there is no statistically significant impact on sale prices of
residential properties in these market areas resulting from proximity to an IWT, when analyzing sale
prices.
Actually, there are three parts to this study, with the third contained in Appendix
G. Early in 2013 one
Ben Lansink published a pretty solid study that showed property value
declines of anywhere from 22% to
59% and averaging about 37% on residential properties close (all within 1 km) to IWTs, which I
posted on
at the time. Apparently Lansink’s work was solid enough that MPAC felt obliged to attack it.
For me to critique all three parts would make for a very long posting, so I’m going to divide it up.
Obviously the details will follow in my subsequent postings, but for the impatient let me summarize
below.
Part 1, are MPAC’s evaluations close to IWTs as accurate (equitable, in their words) as
those further away?
This section is only of tangential interest to me, as the central question isn’t MPAC’s accuracy, but
rather the effect of IWTs on prices. It seems that, given MPAC’s explanations, their appraisals are
accurate. Still, there are some items in this part that are of interest. For example, it seems that
MPAC has been playing games to get the appraisals to agree with the market while hiding the effect
of wind turbines. They studied turbines 1.5mw and larger, not older turbines and the areas in
Ontario where the impact has already been felt.
Part 2, do IWTs have an effect on properties closer to them?
This section is of central interest. Unfortunately there are only 5 pages in Part 2, leaving lots of
details missing. Things like the sales prices within the close-in areas. MPAC’s major tool for doing
mass appraisals (4.7 million in Ontario) is multiple regression analysis and we’ve had lots
ofexperience with how that can be manipulated to obtain the answer
your
sponsor wants. Instead of
providing us the prices and letting us judge for ourselves what any effects might be, they opaquely
run those prices through their regressions and voila! claim there’s nothing to see here!
But whoever wrote Part 2 must not have been talking to whoever wrote Part 1. On page 18, well within
part 1, there’s Figure 2. It’s purpose there is to show how close the appraisals are to the sales
data (the paired blue and green bars) for the different distances from the IWTs.
Note the blindingly obvious. Prices (and appraisals) within 5 km of IWTs are substantially lower than
those further away. I’ve added the horizontal lines so we can better determine the values, which are
noted to the side. Michael McCann, among others, has done a number of studies on IWTs and prices,
and his overall conclusion is a decline of 25-40%, with
almost 100% in
some cases. Does anyone want
to calculate the decline from 228,000 to 171,000? Perhaps the disparity is due to something as
simple as the spread between rural and urban properties, but don’t you think MPAC would at least
mention something? Nope. Nada.
Part 3, what are the problems with Lansink’s study?
Appendix
G is more or less readable and provides an excellent example
of
what David Michaels book, Doubt is Their Product, talks about. MPAC throws up, by my count, 7
objections to Lansink’s methodology; of which exactly zero actually indicate that Lansink’s numbers
are wrong. Sewing confusion seems to be the most logical explanation. As an example, objection #4 of
the 7 is that for some of the pre-IWT prices Lansink used, gasp!, MPAC’s own appraisals. Perhaps
whoever wrote Appendix G didn’t bother reading the conclusions in Part 1.
There’s more details, of course, in the following postings.
Critique of Part 1
Part 1 of MPAC’s 2012 study asks if MPAC has as equitably assessed properties close to IWTs as
properties further away. This part, although of only tangential interest to wind opponents like
myself,
occupies the central part of the entire study. We think the larger question is: do IWTs reduce
property
values, not whether MPAC is clever and honest enough to correctly recognize those reductions.
MPAC is in the business of mass assessments, nearly 5 million in Ontario. Given this volume they
have no
choice but to use computers and computer-friendly techniques to do their assessments. That
translates to
a significant reliance on multiple regression analysis. They determine what sorts of characteristics
influence the selling prices and then use the computers to find out how much influence each
characteristic has. In their experience, 85% of the selling price can be calculated using 5
characteristics, or variables: location, building area, construction quality, lot size and age of
the
home adjusted for renovations and additions. Note that distance to a wind turbine is not one of
their
characteristics and MPAC seems determined to keep it so. But also note that location could be used
in
lieu of distance – more on this later.
MPAC uses the ASR, Assessment-to-Sales Ratio, to determine if their assessments are accurate. It is
simply the assessment divided by selling price, with a ratio of 1.0 being a perfect match. MPAC
expects
ratios between 0.95 and 1.05, and presents what seems to be an endless series of charts
demonstrating
this, primarily in the appendices. While obviously MPAC (actually everyone) has an interest in
accuracy
their emphasis on it seems misplaced in a study entitled Impact of
Industrial
Wind Turbines on Residential Property Assessment In Ontario, which to me and most residents is
quite
a different question.
Just think of the ramifications if MPAC decided to include distance from an IWT in their
regressions. I
have little doubt it would make Ontario’s lawyers very happy. It would also put Ontario’s
very-pro-IWT
ruling party in a difficult political spot. And don’t forget that the board of MPAC is appointed by
the
Minister of Finance, who is a member of the ruling party’s cabinet.
Upstream I mentioned that MPAC could use the location variables that already exist in their
regressions
to finesse their way out of this problem. I point to Wolfe Island as an example of how this might
work.
The western half of WI is now home to 86 IWTs, a project that had been in development since roughly
2000. If this half constitutes a “neighborhood” then MPAC could reduce the values in that
neighborhood
in a uniform manner and never have to recognize the elephant in the room.
As it happens, I posted on
MPAC’s actions on Wolfe Island about 18 months ago. In the 7 years when the wind
project
went from being
developed to operational, the roughly 700 properties on Wolfe received the following number and
average
reductions:
- 2005/06: 130, 9.3%
- 2006/07: 33, 15.2%
- 2007/08: 12, 28.8%
- 2008/09: 34, 12.4%
- 2009/10: 44, 29.0%
- 2010/11: 22, 30.0%
- 2011/12: 27, 24.0%
That’s a total of 302 reductions, which seems like a rather large percentage of the properties
there.
A Wolfe Island couple, the Kenney’s, asked for a reduction which they say MPAC was willing to grant,
although MPAC wouldn’t let IWTs be used as the reason. It ended up in court, and a local paper had a
reasonably good account of it. Perhaps MPAC’s reluctance to admit the obvious is that once they
admit it
they must then include distance in their regressions and doing that (and the legal and political
repercussions) is just too unpleasant. So they limp along, using the location instead.
Their favored overall chain of logic seems to be: since the ratios in neighborhoods close to IWTs
aren’t
much different from those further away, and since those ratios indicate their assessments are
accurate,
and since MPAC doesn’t include distance to an IWT in their regressions, ergo distance from an IWT
isn’t
a factor in reducing values. Part 1 of this study is a necessary part of this chain. So the real
main
purpose of this part of the study (and the study as a whole) seems to be to publicize MPAC’s skills
at
keeping the assessments in line with reality, and at the same time deflect how MPAC is going about
doing
this. MPAC is, after all, in a tight spot. The reality is that home prices take a dive when close to
IWTs. MPAC somehow has to lower the assessments around IWTs to keep the ASRs in line while keeping
their
bosses happy
Critique of Part 2
I fear that this part will be a difficult one for most people to follow, not to mention being
lengthy. Feel free to skip it. But I think it is important to document what this Study contains, and
MPAC made no effort to make understanding it easier. I recommend you print out Study 2′s 5 pages (pdf pages 26 to 30) and have them at hand
as you read
this.
The purpose of Study 2 is to study the effect of proximity to industrial wind turbines on
. In summary, Study 2 finds that
residential sale prices
. Say What?
With the exceptions noted above, no distance variables entered any regression equations for any
of the other market areas
It seems that people who are in the business of estimating real estate prices tend to fall into one
of two camps. First are those who make their living providing services to the people who actually
own the properties, with real estate brokers being the most obvious examples. These people tend to
focus on one property at a time and generally use comps or repeat sales to obtain their estimates.
Second are those who make their living providing services to people who don’t actually own the
property. Academics and mass appraisers (like MPAC) are the most obvious examples. These people tend
to focus on many properties at a time and generally use statistical techniques like multiple
regression analysis to obtain their estimates. The second class tends to think in terms of rejecting
the null hypothesis – you assume there is no difference between two sets (in this case close-in
prices and far-away prices) unless you have “statistical significance”. As a snarky aside, getting
to statistical significance in real estate can be quite a challenge, given the wide variance among
prices, and can be even more difficult when your sponsor/boss doesn’t want you to do so.
So of course MPAC used their main tool, regression equations that run multiple regression analyses.
They created three new variables based on distance from an IWT and entered these into regression
equations to see if the new variables were statistically significant. If they aren’t statistically
significant they don’t “enter” into the regression equations. As for the exceptions (which we’ll get
to shortly), out of 30 possibly significant variables, only 4 were significant and 3 of them were
positive! Whew
So right off the bat MPAC is using a tool that doesn’t provide the answers the actual owners of
potentially affected properties really care about. A binary statistical significance indicator does
not provide an answer to the “how much” and “how likely” questions a homeowner is going to have. In
this case, MPAC has skipped through the study so opaquely that I can’t even have much confidence in
my critique. There’s just too many omissions, too many unexplained leaps, too many dangling
statements.
There are just 5 pages in Study 2. The first of these (page 25 of the
study) lists the three new distance variables and sets their criteria for statistical significance
at either 5% or 10%. For those unfamiliar with that concept, the significance is a measure of the
odds two populations are in fact just randomly part of the same larger population.
In this case, a 5% significance means that there is only a 5% chance that the prices of the close-in
homes are the same as the far-away home prices. In other words, there’s a 95% chance that the
close-in prices are different from the far-away prices. What if there’s only an 80% chance your home
value will drop? Not significant, from MPAC’s perspective.
The second page (page 26) is dominated by Table 9. For MPAC’s purposes
Ontario is divided into 130
“market areas”. These areas presumably have some common basis that allows them to be treated as a
unit for their regression equations. Unfortunately I couldn’t find where the areas were or how many
homes were in each. Of the 130 MPAC found 15 that had large enough turbines in them to be of
interest. These 15 are listed in Table 9, along with the numbers of sales within each of the 3
distance variables for both pre-construction and post-construction. MPAC didn’t bother adding them
up either horizontally or in total, but I did. The numbers inside the grid add up to 3136, which
would be the total sales within 5 km in all the areas. But if you add up their numbers along the
bottom you come up with 3143. It turns out that their 142 should be 139 and their 1584 should be
1580. Now this isn’t much of an error, except that any pre-teen with a spreadsheet and 10 minutes
wouldn’t have made it.
At the bottom of page 26 they introduce pre-construction and post-construction periods, and that
only two of the 15 have enough sales to test both distances and periods. Most of the remaining 13
have “sufficient sales within 1 KM to test the value impact within that distance”. Also that the
“sales period to develop valuation ranges from December 2008 to December 2011″. And that Table 10
provides a summary.
The third page (page 27) is dominated by Table 10. It lists the remaining
10 market areas that
presumably have “sufficient sales within 1 KM to test the value impact within that distance”. 2 of
these have enough sales to test both distance and periods while the other 8 have enough sales to
test just the distance. For each of the 10 areas MPAC list square footage etc and median adjusted
prices. Are these the prices for the entire area or just within 1 km? MPAC doesn’t say. What is the
criterion for “sufficient”? MPAC doesn’t say. Nor does MPAC include what should obviously be
included – both tables. I suspect they are for the entire area, in which case they are useless for
our purposes, at least without the close-in comparison.
Presuming the criteria for inclusion into Table 10 is the 1 km test mentioned on page 26, one has to
wonder how 26RR010 and 31RR010 got into it, as Table 9 shows they had zero sales within 1 km. Snark
alert – maybe the missing 7 sales from Table 9 took place in these areas? And if 1 km isn’t the
criterion, what is? MPAC never says.
At the bottom of page 27 they mention that some sales at the 5 km distance were in urban as opposed
to rural market areas and thus were eliminated. They don’t say how many, nor what their effects on
the regressions might be. They also reiterate their statistical significance levels.
On the fourth page (page 28) they present two more tables, 11 and 12.
Table 11 lists the 8 market
areas that had sufficient sales (within 1 km?) to test the distance variables while Table 12 lists
the 2 market areas that had sufficient sales to test both distance and periods. These tables made
absolutely no sense to me until I noticed Appendix F.
For all 10 areas they entered the 3 distances and ran their regressions. In Appendix F they list all
the “excluded” variables, in this case all the distance-related variables that didn’t get to
statistical significance. They apparently are called “excluded” since, being “insignificant” they
don’t enter into MPAC’s final pricing calculations. If you look at the “sig” column you will not see
any value less than .100, or the 10% significance level MPAC mentioned on pages 25 and 27. I assume
by omission (and that’s all I can do here) that any of the 3 distance variables that are NOT listed
in Appendix F are in fact significant.
On my first pass through Appendix F I came up with 6 omitted, and thus assumed significant,
variables. Two of the omissions were for zero sales, for areas that shouldn’t even be there by the
<1 km criterion. But, maybe the <-1 km variable was never even entered on the exclusion
listing in Appendix F, so maybe I had erroneously assumed it was not excluded when in fact it didn’t
exist in the first place. So maybe the criterion for inclusion in Table 10 wasn’t significant sales
less than 1 km, but rather significant sales less than 5 km out. Just a typo, right? At least Table
11 now is consistent with Tables 9 and 10.
Finally! Out of the 30 tests (10 areas times 3 tests) I count 4 that are significant. Those 4 make
up the “non-DNE” entries in Tables 11. MPAC provided absolutely no guidance or explanation about any
of this, apparently writing for a very small audience.
I can only guess that the dollar amounts in Tables 11 and 12 are the effects of being in those areas
upon the prices. So, in the Kingston area (05RR030), if you live within 1 km of an IWT, you can
expect the value of your home to increase by $36,435! Very impressive – 5 digit accuracy, especially
with a sample size of 7.
Finally, thank goodness, we come to the fifth page (page 29). It is the
Summary of Findings and
contains more words than the rest of the Study put together. This section mostly lists the
significant variables and adds some fairly cryptic commentary.
Some Commentary
As I read through and dissected this Study I couldn’t escape the sense that MPAC didn’t want to put
much effort into it. Any narrative or explanations or even public-friendly conclusions are absent.
The tables that are included are ok, once you take the time to figure them out, but what about all
the stuff they should have included but didn’t? Things like the median prices in the areas
represented by the 30 variables. Or an Appendix F1 that shows the included variables, allowing us to
see the t-scores etc for ourselves. Etc., etc.
These missing items cause this Study to be terribly opaque. I hope my explanation above is accurate,
but I can’t be sure due to all the missing items. Maybe the Study reaches valid conclusions, but I
sure can’t verify that. Perhaps MPAC thinks we should just trust them to be an honest pursuer of the
truth. Sorry, that no longer flies, if it ever did. You have to wonder, is there some reason other
than laziness or stinginess that this Study seems so empty? In addition to the opacity the Study
includes several cryptic items that MPAC never explains. For example, from the summary, what do
these sentences actually mean?
Upon review of the sales database, it was determined that the IWT variables created for this study
were highly correlated with the neighbourhood locational identifier. This strong correlation
resulted in coefficients that did not make appraisal sense, and thus have been negated for the
purposes of this study.
If you look at the excluded variables in Appendix F you notice that most of them are named “NBxxxx”.
Probably those are neighborhood identifiers the somehow overlay the market areas. MPAC never
mentions how many there are or what the criteria are for forming one. But pretty obviously the areas
around an IWT could easily coincide with their neighborhoods. So what gets negated? Some of the
coefficients? All of them? MPAC provides no further information.
As an aside, I found it interesting to scan over the other excluded variables to see what sorts of
things MPAC puts into their regressions. Many of them make no sense and they seem to vary greatly
from market to market. I can’t help but think of a bunch of regression-heads sitting at their desks
hurriedly making up variables and desperately running regressions in an effort to get the ASRs
closer to one (ASRs are covered in Study 1).
I’ll leave (thankfully, believe me) this Study behind with the final thought that it seems so
slapped together, so opaque, so disjointed that perhaps even MPAC themselves weren’t sure what
significance it holds. Unfortunately, the wind industry won’t care about any of that, and will use
this study to continue harming Ontario residents.
Critique of the Lansink hatchet job
Ben Lansink is a professional real estate appraiser based in Ontario. In February 2013 he published
a study of two areas (Melancthon and Clear Creek, Ontario)
where 12 homes all within 1 km of an IWT
were sold on the open market. He used previous sales and MPAC assessments to establish what the
prices were before the IWTs arrived and then compared that with the open market prices after they
went into operation. The declines were enormous, averaging above 30%. The following (thankfully
clickable) spreadsheet snapshot gives a good summary of his results.
In quite a departure from MPAC’s style, Lansink lists every sale, every price, every time-related area
price increase rate and every source. Lansink establishes an initial price at some time before the IWTs
were installed, applies a local-area inflation rate over the period between the sales, and compares the
“should-have-been” price with what the actual sales prices was after the IWTs were installed. In all 12
cases the final price was lower than the initial price, leading to an actual loss on the property. When
the surrounding real estate price increases were factored in, the resulting adjusted losses are even
greater. The compulsive reader might notice that the numbers above vary slightly from Lansink’s. In
order to check his numbers I reran all his calculations in the above chart and there are some rounding
errors – like on the order of <$10. I posted
on Lansink’s study when
it came out, along with a
second posting on a previous version of his study.
These numbers are pretty easy to understand, and for most actual property owners are a
hard-to-refute indication of what awaits us should we be unfortunate enough to own property
within 1 km of an IWT. It is powerful enough and inconvenient enough that MPAC felt the need to
single it out for a hatchet job, which is contained in the 7 pages of
Appendix G. The first
couple of pages are introductory stuff. Starting in the middle of page 2 they start their
critique with, by my count, 7 issues with Lansink’s methodology. The 7 are:
-
Lansink uses the local area MLS price index in calculating the inflation rate. MPAC points
out, correctly I guess, that within the MLS local area there could be neighborhood variances
that could differ from MLS’s area average. MPAC has lots of neighborhoods defined (see
Appendix F for a sampling) and it would be more accurate to use them. While more discrete
data is generally a good thing, I think most people are quite willing to accept the local
area MLS price index as a reasonable proxy. Besides – how would Lansink obtain MPAC’s
neighborhood data? He used the best that he had, and that best is no doubt good enough for
everyone besides MPAC. As you increase the number of neighborhoods you necessarily decrease
the number of homes in each, increasing the chances of distortion by a single transaction.
Issue #5 below will mention this as a problem from the opposite direction. No doubt if
Lansink would have used neighborhoods MPAC would be criticizing him for not using the more
reliable area average. Additionally – how far apart could a neighborhood be from the local
area average? Does MPAC provide any indication that this caused an error in Lansink’s
conclusions? Of course not. - Lansink used just two points to “develop a trend”. I have no idea what they are talking
about. Lansink is not developing any trends. As with neighborhoods, MPAC has more discrete
timing adjustments than what Lansink used. In theory, more discrete data might be more
accurate. In practice, maybe not, due to outliers. A monthly MLS area average is good enough
for, again, everybody but MPAC. Additionally – how far apart could their timeline be from
the local area average? Does MPAC provide any indication that this caused an error in
Lansink’s conclusions? Of course not. -
Two homes in Clear Creek have their initial and final sales 8 and 15 years apart and there
was likely something changed in the interim, affecting the price. People are always doing
things to change the value of their homes – does MPAC have any indication that something
substantial changed in one of these properties? If not, this is simply idle speculation,
designed to instill confusion. Does MPAC provide any indication that this caused an error in
Lansink’s conclusions? Of course not. -
For the other 5 home in Clear Creek Lansink used MPAC’s 2008 evaluations as the initial
price, and MPAC is complaining about that. MPAC is apparently unaware of how ironic this
sounds. They just finished, in this very study, bragging about how close their ASR’s were to
one. Does MPAC provide any indication that this caused an error in Lansink’s conclusions? Of
course not. -
For the properties in Melancthon Lansink used the buyout prices from CHD (the wind project
developer) as the initial prices. To confirm these prices were at least in the ballpark of
local market prices he obtained a local per square foot average price and it compared
favorably with the prices paid per square foot by CHD. Since there was only 4 samples in
this part of his study, even one outlier becomes a possible source of distortion and this is
one of MPAC’s “major concerns”. This seems an odd criticism, coming from someone who relied
upon the data in Table 9, with its fair share of single-digit samples. Does MPAC provide any
indication that this caused an error in Lansink’s conclusions? Of course not -
MPAC found one house with a basement and since footage in basements is treated differently
from footage above ground, this would have changed the square footage price used by Lansink
in his comparison with the local average. Since there are only 4 houses in this sample, it
would have moved the average up. MPAC spends the bottom of page 2, all of page 3 and part of
page 4 discussing basements and whether they are finished or not. Does MPAC provide any
indication that this caused an error in Lansink’s conclusions? Of course not. -
I’ll quote issue #7 in its entirety so you can fully appreciate it. “One final issue with
the sales used in the Lansink study was that the second sale price was consistently lower
than the first sale price despite the fact the time frame being analyzed was one of
inflation. The absence of variability in the study make them suspect.” Suspect? THESE ARE
PUBLIC RECORDS. There’s nothing suspect about them. These are facts. They won’t change. If
they don’t fit your narrative perhaps your narrative needs to change, eh? Does MPAC provide
any indication that this caused an error in Lansink’s conclusions? Of course not.
These 7 issues are an excellent example of spreading confusion, hoping that some of it will
stick, saying whatever you can come up with to discredit an opponent. When you’re reduced to
spending over a page discussing basements it provides an idea of just how desperate you are.
The second part of MPAC’s critique involves them running their own study of resales to see how it
compares
with Lansink’s. They find 2051 re-sales that were part of this same study’s ASR calculations (in Study
1).
They use their more discrete time variables in place of Lansink’s MLS local area averages. They use
multiple
regression analysis because Paired sales methods and re-sale analysis methods are generally limited
Their conclusion:
to fee appraisal and often too tedious for mass appraisal work.
Using 2,051 properties and generally accepted time adjustment techniques, MPAC cannot conclude any
loss in price due to the proximity of an IWT.
In spite of the voluminous tables and examples, MPAC leaves some very basic questions unanswered. Like
where were these 2,051 properties located and how were they selected? There’s no mention of them in the
body of the 2012 study. Over what period were the resales captured? What were the prices of the close-in
re-sales vs the far-away re-sales? Lansink has documented 7 losing resales within 1 km – why does your
summary say zero?
MPAC has this habit of expecting us to be impressed with large amounts of data, without divulging where
it came from and what filters might have been employed. Same with throwing all these numbers into a
computer and expecting us to uncritically accept the output. In short, MPAC expects us to trust them to
be fully honest, fully competent and fully independent. I hate to be the bearer of bad news to the fine
folks at MPAC, but that trust is no longer automatic for increasing segments of Ontario’s population.
Lansink’s numbers are out in the open and are processed in a way that anyone can verify. Your numbers
suddenly appear and rely upon computers with undocumented processes that always support the agendas of
your bosses. Your methods may be satisfactory to some media, some politicians, some courts and all
trough-feeders, but please don’t be surprised that they are not satisfactory to those of us living in
the trenches.
End Wayne Gulden Report
Curriculum Vitae
Ben Lansink, AACI, P.App, MRICS, Real Estate Appraiser and Consultant
Telephone: (519) 645-0750 Email: ben@lansink.ca
Summary – 2014:
Ben Lansink is an experienced professional real estate appraiser and consultant. He has completed
assignments to assist in mortgage financing, power of sale, deemed dispositions, taxation/capital gains
issues involving Canada Revenue Agency (CRA), expropriation, insurance matters such as fire destruction,
family law, environmental issues, assessment appeals, First Nation issues, and litigation support.
Case Studies pertaining to Price Diminution resulting in Value Diminution, Injurious Affection, have been
carried out. These included proximity to Airports, Hydro Corridors, Land Fill Sites, Wind Turbines,
Roads and Road Works, as well as contaminated land and buildings including urea formaldehyde foam
insulation.
Lansink Appraisals and Consulting is a division of Wellington Realty Group Incorporated, brokerage, Ben
Lansink, Broker of Record. Wellington Realty Group Incorporated is not an active brokerage and does not
list or sell real estate. It maintains Realtor® board memberships solely to obtain legal access to
various real estate board MLS® willing buyer willing seller open market systems.
PROFESSIONAL QUALIFICATIONS
| MRICS |
Member, The Royal Institution of Chartered Surveyors, Member #1293804; awarded use of this professional designation on November 16, 2009. |
| AACI, P.App |
Accredited Appraiser Canadian Institute, Certificate #2180. Awarded use of the AACI professional designation on May 18, 1982 by the Appraisal Institute of Canada. |
| CRA | Canadian Residential Appraiser, January 1976; relinquished May 18, 1982 |
| FRI | Fellow, Real Estate Institute of Canada, 1986; relinquished June 1995. |
| CLP | Certified Land Planner, Real Estate Institute of Canada, 1990; relinquished June 1995. |
Completed the Ecogift Training Workshop, July 2001, for the valuation of Ecological Gifts as has
been established by Environment Canada.
Successfully completed the ‘Certificate Program’ in real estate as presented by The Ontario Real
Estate Association.
Licensed under the Ontario Real Estate and Business Brokers Act in 1968 and as a Broker, November
17, 1986, Registration No. 1914433.
Licensed under the Ontario Real Estate and Business Brokers Act in 1968 and as a Broker, November
17, 1986, Registration No. 1914433.
EXPERIENCE
| 1974 – Present | Fee Appraiser and Consultant |
| 1970 – 1974 |
Mortgage Manager, The Royal Trust Company – client and real estate mortgage loan approvals |
Appraisal assignments have included:
- Airports; harbours; cemeteries; funeral homes;
- Institutional buildings; hospitals; police stations; schools; and churches;
- Office towers; industrial properties;
- Retail commercial properties; hotels; motels;
- Mobile home/trailer parks; marinas; golf courses;
- Farms and farm land; intensive farms (e.g. pork; dairy; chicken; mushroom)
- Land,
- Ecologically sensitive; parks and conservation; aggregate resource;
- Commercial/industrial/residential land;
- Building lots – on water and not on water;
- Ecologically sensitive; parks and conservation; aggregate resource;
- Landfill sites;
- First Nation reserve lands;
- rights-of-way; easements; market rent studies; rail corridors; pipelines; and
- other property types.
Assignments have been carried out in Ontario, Quebec, Manitoba, Saskatchewan, the Caribbean, the
State of Utah, and New Zealand.
MEMBERSHIP IN PROFESSIONAL ASSOCIATIONS
Appraisal Institute of Canada since 1972:
AACI, P.App:
Accredited Appraiser Canadian Institute, May 1982
Royal Institution of Chartered Surveyors since November 2009:
MRICS:
Member Royal Institution of Chartered Surveyors, November 2009
| Member: |
London and St. Thomas Association of Realtors®; Ontario Real Estate Association; Canadian Real Estate Association; National Commercial Council of the Canadian Real Estate Association; Ontario Expropriation Association; and The Toronto Real Estate Board. |
PARTICIPATION IN PROFESSIONAL ASSOCIATIONS
London and St. Thomas Association of Realtors®, Member, Education Committee 1987, 1988, and 1989
(Chairperson 1988); Board Director 1989 and 1990; Member, Ethics Committee 1989; Member, Ethics
Appeal Committee 1990.
Member of the Investigating Committee (1989 – 1992) and the Adjudicating Committee (1992 – 1995) of
the Appraisal Institute of Canada, Ontario Association. These committees addressed public complaints
against members of the Appraisal Institute of Canada, Ontario Association.
Local Architectural Conservation Advisory Committee (LACAC) 1990-1992, appointed by London City
Council to serve as a member at large.
Assessment Review Board of Ontario, a Land Tribunal: Member May 14, 1992 to May 14, 1998. Appointed
by an Order in Council, as recommended by the Attorney General, approved and ordered May 14, 1992
and again on May 14, 1995 by the Lieutenant Governor of Ontario.
PUBLICATIONS AND STUDIES by Ben Lansink
Market Study Pit or Quarry January 2014
Diminution in Price (if any)
Market Study Roadway Analysis November 2013
Diminution in Price (Injurious Affection if Partial Taking)
Market Study Power Corridors April 2013
Diminution in Price (Injurious Affection if Partial Taking)
Wind Turbines Melancthon Clear Creek MPAC November 2012
Diminution in Price / Current Value
Effects of the Visible Transmission Corridor June 2011
Winner, ‘Call for Papers’, Appraisal Institute of Canada.
Lansink authored and presented a paper to appraiser delegates at the Annual Conference,
Appraisal Institute of Canada, Moncton, June 2011.
Market Study Non-Visible Easement May 2010
Diminution in Price
Market Study Non-Visible Easement May 2010
Diminution in Price
Lazar v. Hydro One – OMB, Injurious Affection June 2005
A case study paper based on a precedent setting case decided by the Ontario Municipal Board
in
June of 2002. Lansink presented the case study to appraiser delegates at the Appraisal
Institute
of Canada’s June 2005 Conference, Edmonton, Canada.
Adjusting for Conditions of Sale 1998
The Canadian Appraiser, Summer 1998.
Highest and Best Use/Land Use Controls 1998
Appraisal Institute of Canada, Ontario Association.
Assessment, Taxation, and the Fee Appraiser 1997
Appraisal Institute of Canada, Ontario Association.
UFFI and Market Value Spring 1985
The Canadian Appraiser, Volume 29, Book 1.
TEACHING
Taught the Assessment Program at Fanshawe College, London, 1980s.
Certified instructor, Courses 1101 and 1102, Appraisal Institute of Canada, 1980s until the end of
the 1990s.
Note: Appraisal Institute of Canada and the University of British
Columbia’s Sauder School of Business are now partners in offering a program designed for people
seeking to join the real property valuation profession–and for valuation practitioners already
employed in the industry who want to upgrade their education. The University of Guelph, Athabasca
University, L’Université du Québec à Montréal; Seneca College and Langara College also offer courses
recognized by the Appraisal Institute of Canada.
Certified instructor for the subject “The Principles of Mortgage Financing” for Ontario colleges as
administered by The Ontario Real Estate Association, 1975-1985.
Course instructor, Introduction to Appraisals, 1995-1996, Indian and Northern Affairs Canada.
CONTINUING EDUCATION, CONFERENCES
| AIC: |
Since the early 1990s, the Appraisal Institute of Canada (AIC) has had a mandatory Continuing Professional Development (CPD) Program designed to ensure that Designated Members maintain and enhance their knowledge and skills in their area of practice throughout their career. |
| RECO: |
Since 2000 the Real Estate Council of Ontario Council of Ontario (RECO) has had a mandatory continuing education program that provides significant benefits to registrants, and the open market real estate buyers and sellers who look to them for guidance. |
| OEA: |
The Ontario Expropriation Association (the “OEA”) is made up of individuals from professions involved in the acquisition of land for public purposes. Expropriation occurs when public bodies such as the federal and provincial governments, municipalities or school boards, acquire land for public purposes under compulsion of law. In the majority of cases, expropriation involves a complicated process that must be carried out in strict accordance with legislation (in Ontario the Expropriations Act, R.S.O. 1990, CHAPTER E.26). |
Ben Lansink is a member of the OEA and participates in its Seminars / Conferences.
Ben Lansink attends most of the yearly conferences of the Appraisal Institute of Canada and its
Annual General Meetings.
EXPERT WITNESS EXPERIENCE
The Federal Court of Justice has jurisdiction over criminal, civil, and
family cases, and is the
largest superior trial court in Canada. The Divisional Court, Small Claims Court, and Family Court
are all branches of the Superior Court of Justice.The Superior Court of Justice has jurisdiction
over criminal, civil, and family cases, and is the largest superior trial court in Canada. The
Divisional Court, Small Claims Court, and Family Court are all branches of the Superior Court of
Justice.
Environment and Land Tribunals Ontario brings together five Ontario tribunals and boards which
adjudicate matters related to land use planning, environmental and heritage protection, property
assessment, land valuation and other matters. The land tribunals are the
Assessment Review Board,
the Board of Negotiation, and the Ontario Municipal Board.
The Federal Court. is Canada’s national trial court which hears and
decides legal disputes arising in
the federal domain, including claims against the Government of Canada, civil suits in
federally-regulated areas and challenges to the decisions of federal tribunals.
Over the years Mr. Lansink has been accepted as an expert witness to assist the
Superior Court of
Justice, the Land Tribunals, and the Federal Court.
CLIENTS
- Federal Government, Justice Canada;
- Provincial Government;
- Municipal Governments and Counties;
- Banks, Credit Unions, Mortgage Brokers / Lenders / Borrowers;
- Insurance Companies;
- Lawyers and Law Firms representing:
- Corporate, institutional, and individual clients;
- The Insurer of Members of the Law Society of Upper Canada;
- The Insurer of Realtors®;
- The Insurer of Members of the Appraisal Institute of Canada;
- The Insurer of Members of the Appraisal Institute of Canada;
- The Insurers of Real Property (Damage / Fire Insurance);
- First Nations:
- Agency 1 First Nation, PWI-DI-GOO-ZING NE-YAA-ZING;
- Beausoleil First Nation;
- Cape Croker First Nation;
- Chippewas of Georgina First Nation;
- Chippewas of Rama (Mnjikaning) First Nation;
- Chippewas of the Thames Land Claim Trust;
- Mohawks of the Bay of Quinte First Nation;
- NeyashiiNigmiing First Nation;
- Nicickousemenecaning First Nation;
- O’BASH’KAAN’DA’GAANG (Indian Reserve 38A);
- Saugeen First Nation IR 28 and 29;
- Walpole Island First Nation, Wapekeka First Nation, Reserve #1 and #2; and
- Sachigo Lake Indian Reserve #1;
Assignments have involved both reserve land and non-reserve land that is under effective
ownership of a First Nation; and - Others
- Superior Court of Justice, the Honourable Mr. Justice Colin L. Campbell;
- Conservation Authorities, Nature Conservancy of Canada;
- Private Corporations and Private Individuals (Canadian and International);
- Universities; Colleges; School Boards; Hospitals; and others.
