A new study commissioned by the Interstate Natural Gas Association of America (INGAA) concludes that the presence of pipelines does not affect the value of a property. The report, “Pipeline Impact to Property Value and Property Insurability” is the result of a year-long analysis conducted by Integra Realty Resources (IRR), a leading provider in real estate valuation. The study also found that the proximity of pipelines do not affect a property’s insurability, desirability, or a homeowner’s ability to obtain a mortgage.
The findings follow a comprehensive review that analyzed data from multiple different perspectives and a diverse selection of geographic areas, including the Midwest, Northeast, Mid-Atlantic, and Southeast regions of the United States. IRR selected properties located both near and away from natural gas pipelines in all four regions and adjusted the sales price of each home based on size—a common method used to compare home values from different locations.
A comparative analysis of homes located across all geographic areas of the study found no measurable impact on the sales price of properties located along or in proximity to a natural gas pipeline. Additionally, the sales frequency of homes ‘on’ the pipeline route versus homes ‘off’ the pipeline were consistent, indicating the presence of pipelines does not inhibit sales.
In Ohio, IRR studied two suburban neighborhoods located near Cincinnati that are both in close proximity to two natural gas pipelines—the Texas Gas Transmission Pipeline and Rockies Express Pipeline. “After adjusting for the gross living area, bathroom count and age, there appears to be little difference in total sales price of properties located along the pipeline and those that were not.”
In addition, IRR found that when compared to a sales price on square foot basis, “properties located on the pipeline easement sold for a higher price per square foot than those located away from the pipeline”
IRR also analyzed the insurability of properties near or on a pipeline route and found no indication that the presence of an easement would hinder a buyer’s ability to insure a property. According to the study, “agents and company representatives interviewed by IRR agreed that the proximity to the pipeline would not be a consideration during the underwriting of insurance or in the marketing of insurance.”
Similarly, IRR identified no correlation between the presence of a pipeline and a buyer’s ability to obtain a mortgage. In fact, “Lenders interviewed by IRR indicated that conventional, Federal Housing Administration (FHA) and Veterans Affairs (VA) loans are issued on property encumbered by pipeline easements on a continual basis.”
Homeowners across our region have understandable concerns about protecting the value for their property. Investing in a home is often the largest purchases one will make in their lifetime, making it all the more important to gather all the facts to make informed decisions. It is clear from this study that the presence of a pipeline has no impact on the value of a property.