It is a fairly common misperception that operating nuclear power plants in the United States depress local property values. This assumption was refuted in recent regulatory proceedings in the Northeast, where detailed studies of local real estate records confirmed earlier studies finding no adverse impact on the property value of homes in proximity to a nuclear power facility or its associated spent fuel. Specifically, perceptions of risk and stigma associated with operating nuclear facilities do not appear to translate into market behavior in the form of a reduction of home sale prices in the vicinity of such facilities. In fact, those studies suggest there may be a positive impact on surrounding communities in the form of reduced residential property taxes for a given level of public expenditures. In practice, it seems that home buyers and sellers are far more pragmatic in their decisions.
A new study issued by RCF Economic & Financial Consulting, Inc. in December 2018 confirms these conclusions but also examines property value impacts involving shutdown nuclear plants. The RCF study uses a hedonic price model to examine potential impacts on a community when a nuclear plant ceases operation and spent fuel remains on site—impacts that may continue long after the plant is shut down. The study concludes that when property tax payments from the nuclear facility cease or decrease substantially following shutdown, the subsequent increase in residential property tax rates required to maintain a consistent level of public expenditures appears to have a negative impact on home prices. Specifically, the study finds that a one percentage point increase in property taxes is associated with a 4.31% decrease in the sale price of a home.
As noted in the study, these conclusions may also be relevant for any communities with property tax revenues linked to large industrial or commercial tax payers.