Anyone who works on wireless site deployment knows, even before the council or planning hearings start, what objections they will hear. Small groups of concerned residents will assert that electromagnetic fields (EMFs) cause a variety of ailments ranging from cancer to diabetes to tinnitus, and that the government’s electromagnetic safety guidelines do not account for new technologies. They will argue that wireless equipment is unsightly. Additionally, they will assert that wireless sites built near homes can cause a reduction in property values.
A Shift in Strategy
In the United States, per settled law, the Federal Communications Commission sets the standard for electromagnetic field safety. The FCC derives its safety limits from a variety of sources, including the Food and Drug Administration (a branch of the U.S. Department of Health and Human Services), the Institute of Electrical and Electronics Engineers (IEEE) C95.1 standard and the International Commission on Non-Ionizing Radiation Protection (ICNIRP) RF EMF Guidelines. In 2019, both the IEEE and ICNIRP issued updates, and the FCC subsequently closed a docket — open for more than six years to voluminous public comment — and reaffirmed its EMF safety guidance.
Settled law regarding EMF safety clearly states: Provided a wireless site emits RF energy within FCC-defined safety limits, local governments cannot deny applications for wireless facilities based on EMF concerns — they must defer to the FCC’s safety standard. Thus, in recent years, opposition groups and their familiars in the legal community, seeking to block or limit cellular deployments and knowing they cannot prevail on health-related arguments, have shifted strategies toward sowing concerns about aesthetics and property devaluations.
Do Wireless Sites Affect Residential Property Valuations?
The belief that wireless sites adversely affect residential property valuations arose over time, but a specific assertion of devaluation appears to have started with an article (The Appraisal Journal, Summer 2005) authored by Sandy Bond, Ph.D., and Ko-Kang Wang, where Bond and Wang claimed that wireless towers could result in as much as a 20 percent reduction in valuation. Other investigators have claimed similar adverse effects: Affuso et al. (2017); the National Institute for Science, Law and Public Policy (2014); and Kramer (2016). Notably, all of these investigators used a survey methodology to collect evidence. In practice, surveys — especially those with small sample sizes — are poor methodologies because they are subject to respondent bias, participation bias, sampling bias and a host of other factors.
Surveys may inform economic analysis, but should not be used to infer causation. There are numerous studies on effects on real estate valuation that used objective and reproducible methods: Joint Venture Silicon Valley (2012); Valbridge (2018); Maennig (2010); and others. However, these previous studies focused on large towers and monopoles (i.e., macro sites) sited on hilltops and buildings, rather than small cells on wooden poles and streetlights near residences. None of the objective studies found economically significant effects — positive or negative — on property valuations. Nevertheless, some real estate agents have an extant belief that wireless sites near residences can cause property devaluations — a belief on which opposition groups seek to capitalize.
Although a devaluation of residential real estate from proximal wireless sites does not show up in objective, evidence-based studies, nevertheless the possibility often is raised as an objection during planning commission, city council, county board and permit appeal hearings. This is an effective strategy, because the single largest investment most of us will ever make is our home. Threaten that, and people get nervous. Also, previous studies focused on macro sites, whereas the wireless industry’s current focus is on 4G and 5G small cells. Thus, opposition groups challenge the studies from JVSV, Valbridge, Maennig, etc. as not applicable to small cells. To address the gap between extant belief and evidence-based economics, our study focused on whether residential real estate valuation effects from small cells were objectively evident in real estate sale records.
Our study applied a spatial difference-in-differences approach, a well-regarded economic analysis method used to estimate the effects from proposed development in and near residential areas. The study examined the question, “Do wireless small cell sites have an impact, either positive or negative, on the valuation of residential real estate?” The study also reviewed previous studies and examined the question of whether or not the oft-asserted 20 percent reduction in property valuation appeared in the results.
The study used a dataset of 1,734 small cell sites installed in California during the period from 2010 to 2020, and a dataset of 11,684,458 real estate transactions statewide during the same 10-year period. Both the wireless and real estate datasets were provided to a doctoral-level economist skilled in urban planning, policy, land use and housing. The economist had no contact with the wireless industry before or during the study, nor did he have any financial relationship with the wireless industry. The economist’s results were, in turn, provided to Joint Venture Silicon Valley for final authorship of the study. Aside from formatting the results as necessary for authorship and production, JVSV made no adjustments to the analysis results.
Findings and Conclusions
Across a wide geographic area, roughly defined as a triangle in California from Santa Barbara to Santa Rosa to Sacramento, our study found effectively zero statistical evidence that small cells proximal to residences cause devaluation of residential real estate. In fact, there is some evidence that residential real estate valuations increase within 10 kilometers after construction of a small wireless facility. In cases where there is a statistically significant negative effect, the effect is not economically significant. In cases where there is a statistically significant positive effect, some effects are economically significant, whereas others are not economically significant.
Notably, evidence for the extant belief held by some real estate professionals that wireless sites near residences can cause residential property devaluations is not evidenced by our study.
The study is free to download from https://bit.ly/SCREstudy.
David Witkowski is executive director of civic technologies at Joint Venture Silicon Valley and founder and CEO of Oku Solutions.