Study shows effects of hog confinements on rural home values
By Ruth Neil
Daily Staff Writer
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The report, released in mid-August, aimed to clarify the effect of livestock facilities on property values.
The report found livestock operations with about 2,500 finishing hogs would decrease property value by 11 percent if northwest of the home and 7 percent if south of the home.
Property owners criticized the study for comparing the values of homes that sold but not considering homes on the market that never sold, said Bruce Babcock, professor in agriculture economics and director of the Center for Agricultural and Rural Development.
The study examined records from five counties, said Babcock, who conducted the study with Silvia Secchi, assistant scientist at the Center for Agricultural and Rural Development. and Joseph Herriges, professor of agriculture economics.
Researchers used as much data as was available, going back to 1992 in some counties and 1995 in others, Babcock said.
"There is no data on homes that didn't sell," Babcock said. "We don't know why they didn't sell."
For example, there was no way to know if a nearby livestock operation or a high asking price kept the home from selling, he said.
The research examined data on 1,145 rural home sales and 550 livestock facilities from Franklin, Hamilton, Hardin, Humboldt and Webster counties, he said. More than 95 percent of the livestock facilities included in the study were hog confinements, although the two largest operations were poultry confinements, Babcock said.
Property values decreased the most for homes where livestock operations were located within one quarter mile to the northwest or the south, Babcock said. Though wind directions vary somewhat, prevailing winds blow from the northwest in the winter and from the south in the summer, he said.
In addition to distance and direction, the report said the size of the livestock operation affected property values. The report divided livestock operations into three sizes: about 1,300 finishing hogs, about 2,500 finishing hogs and about 4,000 finishing hogs, said John Mabry, professor of animal science.
"The smaller units had more of a negative effect than the larger units," Mabry said.
Homes with a 1,300-hog operation within a quarter of a mile would be worth 26 percent less if it were to the northwest and 22 percent less if it were to the south, according to the report.
"The larger facilities [with about 4,000 finishing hogs] did not have a negative effect on property values no matter where they were located," Mabry said.
One reason for the exception may be that larger operations are generally newer and kept in better repair, he said.
Under regulations enacted in 2002, units above a certain size have to apply for permits, Mabry said.
Iowa does not have regulations for odors, however, said Dwaine Bundy, professor of agricultural and biosystems engineering.
"The [Department of Natural Resources] is looking into what may be an acceptable odor threshold," he said.
Regulations may set levels for hydrogen sulfide or ammonia at livestock facilities and at a given distance, Bundy said.
Another solution suggested in the report is for livestock operators to negotiate privately with property owners.
For the right to build a new hog confinement, operators could agree to follow odor-reducing management practices and pay residents a modest compensation, the report said.
These suggestions also drew criticism from those who said standoffs are best resolved in the courts.
"I kind of chuckled at that [criticism]," Babcock said. "That is the American way -- to let the courts decide."
The results of the study reflect the five counties in the study, but not necessarily other parts of the state, Babcock said. For example, there are more small hog operations in northwest Iowa than in the five counties in the study, he said.
"I wouldn't apply [the study] to other parts of the state," Babcock said.
Also, the study shows average effects -- it doesn't give proof that any one livestock facility decreased the value of any particular property, he said.
To apply the study's findings to any particular property could be a misuse of the information, he said.
"If you're a homeowner and you're suing a livestock operator, I'm not sure you'd use this study," Babcock said. "I won't blame livestock for any particular property being devalued."
Although large livestock operations may have a negative effect on the value of homes that are located nearby, the study found they have a positive effect on the value of homes in their region -- for instance, homes within a 10-mile radius, Babcock said.
Large hog confinements generate economic activity in Iowa, he said.
"If there were a great economic dictator, that great economic dictator would declare that Iowa is the ideal place to raise hogs," Babcock said.
"[This is because there is] tons of land, demand for the nutrients and cheap feed."
However, it is difficult to balance the needs of livestock operators with the needs of rural residents, he said. It also can be a hassle to start up a new, large operation in Iowa, he added.
"It's not clear that Iowa is ideal from that perspective," Babcock said.
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