Money in the bank?

Streams task force talks property values

The Anadromous Fish Habitat Protection Task Force on Thursday night mulled how the value of private property near anadromous streams and lakes might be affected once they are officially managed under the Kenai Peninsula Borough’s anadromous habitat protection code.

 

The task force also heard from Steve Colt, University of Anchorage Alaska professor of economics, about how proximity to natural resources and environmental assets affects similar property values in Alaska and Outside.

After the meeting, Colt said he was hesitant to comment specifically on how a 50-foot zone that protects fish habitat on anadromous streams and lakes in the borough would affect property values near those water bodies without seeing more data on the subject.

“The only opinion I could give right now is that I haven’t seen any data that shows a decline in the market value,” he said, clarifying later that doesn’t mean it hasn’t or won’t happen.

Colt said, from a property owner’s standpoint, the buffer could reduce specific uses of the property in that area. The market value of real estate depends on what the next round of buyers are willing to pay for, and reduced uses could reduce enjoyment of the property, he added.

“But as far as whether the property value goes down in the market place, it’s ultimately what we call an empirical question — we are going to have to see,” he said. “The evidence from around the country seems to be that as long as everybody sort of does it together, setbacks and buffers can actually enhance the value of the property for resale.”

It also seems to be the “norm,” Colt said, in the Lower 48 to have what “some Alaskans might call pretty strict imposed rules experienced for everybody” on rivers and lakes.

During his presentation, Colt referenced a study colleagues of his are conducting in the Matanuska-Susitna Borough on property values near environmental assets. Colt said he suspected the study was the first of its kind in the state.

The study, which has not be finalized, looked at properties’ real market value and focused on those that had been bought or sold in 2009 and 2010, which was about 3,100 transactions.

“Proximity to lakes really matters for property values,” Colt said.

Specifically, as one travels from a half mile to one mile away from a lake, property loses 7 percent of its value. Colt said that number was generated after the data was controlled for the size of house and lot and other things also affecting values.

The same is true for anadromous water bodies and streams, Colt said — one kilometer closer to streams causes the property value to go up by 6 percent.

Colt said property values significantly increase when they are near land with a conservation management status — if there is a conservation unit within 10 meters of the property, it increases in value by 14 percent.

Fred Braun, a member of the Citizens for Responsible Waterfront Landuse group seeking to eliminate Ordinance 2011-12 that expanded the habitat protection to all anadromous waterbodies on the Peninsula, challenged Colt’s claims.

Braun, who is a local realtor and member of the task force, said after the meeting property value trends and statistics from elsewhere in the state would not be indicative of Kenai Peninsula property values.

“In the Anchorage bowl and the Mat-Su Valley there’s not (a lot of) privately owned waterfront available so those people are going to pay top price,” he said. “So yes, land values are extremely high because there is not any available. So my point is that you can have those (properties) so restricted that no one here would even want them if they were given to them.”

The reason property next to streams and lakes is attractive and valued highly with Kenai Peninsula buyers, Braun said, is because of what they can do with that property and the uses they can get out of it. It is not from high demand, he said.

“If I had two lake parcels the exact same size and exact same price and one had this ordinance and the other didn’t, again apples to apples on floatplane sized lakes ... I can tell you that 99 percent of the people are going to buy the one that is not under this ordinance,” he said.

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