While Faraway Lenders Grapple with Fracking, a Word From Local Appraiser in the Trenches

Categories: Development

touring-the-fracking-gas-drilling-sites-of-arlington.jpg
Photo by Taryn Walker
A rig in ArlingtonThe New York Times ran an interesting story Thursday on the growing reluctance of banks to grant mortgages to owners of properties that have been leased for gas drilling in the northeast. Landowners often aren't giving banks a heads up before signing on the dotted line, and there's no telling what an impoundment for drilling waste does to property values -- something in which the lender has a vested interest.

Nor, for that matter, is it clear how they might react when (or if) the secret ingredients in that slurry drillers use to fracture rock are finally disclosed. The senior vice president of Tioga State Bank in Tioga, New York, has cautioned that intensive drilling, new to the region, hasn't been studied for its impact on property values. They're relative newcomers to the shale play. But they need only look to the southwest, at North Texas, for a case study on the inverse relationship between nearby drilling and home prices.

Unfair Park called up Steve Nichols -- a former Frisco city councilman, vice chair of the Texas State Libertarian Party and an appraiser who has gauged home values across North Texas in the midst of the Barnett Boom -- to get his two cents.

Basically, nearby heavy industry is never good for values, he said.

"When you're talking about airborne contaminants and possibly even groundwater contamination that are involved, it does have an impact on people psychologically," he said. "I've done appraisals in Fort Worth, where it's in close proximity to housing, and in the outlying areas, and I spoke to people adjacent and it's always their concern."

In real estate, perception is as important as reality. Now, take that, add a depressed housing market, and watch the bargain-basement prices properties near drilling activity will fetch.

"When you have a lot of housing inventory, why do you have to assume risk?" he said. "If this was a hot market and houses were being sold rapidly, a lot of people, out of emotion, will buy these because what else is available to buy?"

"The properties with negative influences are always the ones with big value impacts because there are too many choices."

But, outside of air and noise pollution caused by drilling, and the mysterious compounds in fracking solution, do tanking values impact municipalities at large? Should, for example, Dallas consider the impact on house prices as it endeavors to draw up an ordinance for drilling within the city limits?

"The thing people need to always realize, and the thing I try to stress -- and it's hard for city people and the council people to understand -- is that what happens when you're talking about a city, if it lowers property values somewhere in that city, you have to make that up somehow.

"When values go down, that's a drop in property taxes to the city. There's a fractional impact to everybody."

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14 comments
Chris Salmon
Chris Salmon

Why can't you do some simple research into the facts before you write things that are provably false and misleading?

"Nor, for that matter, is it clear how they might react when (or if) the secret ingredients in that slurry drillers use to fracture rock are finally disclosed. "You don't know this has been resolved?

"the mysterious compounds in fracking solution"You STILL don't know this has been resolved?http://www.sierraclub.org/natu...

http://fracfocus.org/

Give it up already.  That pony's done left the barn!

Mike
Mike

How is an industrial gas pad site more dangerous than the thousands of natural gas outlets we have in neighborhoods all over the city?  We have pipes bringing gas into homes owned by God knows whom, owners completely responsible for this substance once it's in their home, no monitoring, no training, no supervision of any kind.  We already see annual explosions because of bonehead errors.  Yet we live with it.  If anything, people want to expand the use of natural gas.

Darrd2010
Darrd2010

 One day the shit is going to hit the fan, there is going to be some kind of dramatic emergency involving a gas pad site on Dallas property and people are going to be shaking their fist at City Hall. That will be too late. What you need to do is to show up at the public meeting on Thursday, October 27 at 6pm in Auditorium L1 next to the parking garage that you can't park .You can say whatever you need to say to the Task Force about protecting the Dallas environment. Their recommendations go to the city council. The gas industry will have their stooges there as they did in Fort Worth earlier this week.

It's past time to 'occupy' the microphone at these city sponsored events. Take advantage of it and tell it like it is.The City of Dallas(city manager in particular) is after any revenue they can get and they do not care about the welfare of Dallas citizens.

Show up and don't shut up.

scottindallas
scottindallas

I'm no fan of this fracking.  I can't imagine that this would happen in neighborhoods, where it would be a negative.  If this were occurring on city property most likely, it would somewhat remote.  I think this article exaggerates this effect. 

matilda of tuscany
matilda of tuscany

Yes, the accident is a matter of when. 

Scott, I think I am a fellow Lake Highlands neighbor of yours.  Do you know how many of my kid's friends miss school, soccer, and play dates because of asthma?  A bunch.  I don't want my kids exposed to any increase in pollutants--these guys are going to flare and pollute, it is just business as usual.  That's going to impact our Dallas air quality, and what my kiddos breathe.  There will be accidents and there will most likely be super fund sites.  I don't care if it is next door or 25 miles away...my kids first--and I am willing to pay the short term potential tax increases to offset the long term tax increases and medical costs related to gas fracking.

El Rey
El Rey

So a gas well in Tietze park in Lakewood wouldn't have a negative impact? How about a gas well next to your child's high school cafeteria? C'mon now...

scottindallas
scottindallas

Do you know how much cleaner the air is today?  Your asthma figures don't match pollution figures.  One could argue that pollution and second hand smoke prevented asthma, as the rates are so much higher now that we've vastly limited/improved those figures.  And, the suggestion that pollutants might actually be helpful is born out in other allergy studies where exposure to irritants strengthens immune systems.  The same could be true of asthma--the smoke creates a tarry layer of resistance. 

I don't mean to be flippant, but we really don't understand what causes asthma, and certainly pollution isn't the cause.  I remember LH in the mid-80's.  There was a grimy film on the horizon, that isn't there today.  I remember the smell of cars back then, coughing out black smoke, that is all gone today. 

I'm not a fan of fracking, though we do need these resources.  Our zoning laws will prevent this from occurring in our neighborhoods, and our "parks" are not all the same.  I don't disagree with those who want to see this clearly limited and restricted.  Again, I don't know that Dallas is even a good candidate for fracking, due to even having good shale formations, much less the space and the place to do it safely. 

We should all try to avoid hyperbole and seek and follow facts.  I don't imagine that I know all that much about fracking.  (I really want them to disclose the chemicals they use before they frack one fracking well.)  But, again, we need energy.  I don't think Dallas is well situated to benefit, and I'm not pushing that either. 

scottindallas
scottindallas

My point is that those type of installations are no doubt prohibited.  So, again, what's your point?  Your reducteo is excluded, hence doesn't work, wanna try again? 

I'm not sure if there is enough space that would make this viable for Dallas County.  I'm not necessarily a proponent of drilling in Dallas.  My point is that this article is as irrelevant as your comment.  Now, where is drilling to be allowed?  Let's answer that first before we drift off into stupid land.  Your home in a subdivision doesn't come with drilling rights.  They are zoned out of relevance. 

Where are we talking about drilling, and should we expand those restrictions further?  This would be a far less contentious question.  We could probably sate many concerns by addressing that first.  It seems to me we're talking about drilling in floodplains and industrial zones as there aren't many other conceivable locations

Edgar
Edgar

Obviously, it's an industry, and industries generally don't use organic billy goats to generate what society consumes.  But the complaint that gas wells are unclean and treacherous is so overblown.  After a short season of drilling and fracking, the footprints of wellsites get reduced dramatically.  I bet most of you who have spent time in (or passing through Tarrant, Johnson, and Denton counties have passed right through neighborhoods and communities with gas wells that you didn't even realize were there.  And many of those wells have already ridden down the steep part of the decline curve - the kids around them aren't sick.  Scottindallas is right - let's take a break from the hyperbole.  Encouraging more of it simply causes more and more people to take you less seriously.

scottindallas
scottindallas

As I said earlier in the thread, I am concerned about the volume and quality of the water required to frack.  I would like much more study of it.  I want full disclosure of the fracking chemicals for pollution studies.  I'm not unconcerned about those issues at all.  However, I do know something about zoning, and it his highly unlikely that the elementary school in your neighborhood will have a drilling well. 

I do want limitations on drilling to heavy industrial zoned areas, or unincorporated land.  That would be the least offensive use.  I think we're seeing a slow down in fracking, as yields seem to be about 1/2 of what they were projecting.  We need energy, I want it extracted safely and carefully too.  I appreciate your passion, this doesn't have to be viewed as a dichotomy-- that approach yields little compromise. 

Mariana Griggs
Mariana Griggs

Scott in Dallas:So then you should come to the public hearing and ask what the recommendations will be for the new SUP process. If you have not read the current rules, then your comments ARE flippant.

Read the rules and put in a year's worth of work to dig up the truth about this "clean" source of energy (That's what a group of citizens have been doing for everyone, including you-this is a no consultant crew but worth $30,000 any day of the week-in case you were wondering).

You might be surprised at what industry will do to get to that gas. "Clean": only relates to the final usage, the getting of it is totally unclean. What good will more energy be if you are too sick to be able to use it and if your children are too contaminated to ride the Natural Gas School bus.

John2247
John2247

"Your home in a subdivision doesn't come with drilling rights.  They are zoned out of relevance."

Are you sure about this?  Mineral rights in Texas are complicated, to say the least.

Also, air pollution does not stop at zoning boundaries anyway.  It's air.

claytonauger
claytonauger

Indeed, there is currently NO area of Dallas "protected" against drilling rigs showing up next to them. Every permit is looked at separately and variances are allowed via Special Use Permits. There have been permits applied for to drill in public parks, near lakes, and residential areas already. This is why the current re-write of the Dallas drilling ordinance is so very critical. A public hearing is at 6 pm next Thursday in the basement auditorium of City Hall where you can support restricting where and how future drilling will take place, or even if it should be allowed to take place at all in an urban area. Citizens groups watchdogging the process have put out their own recommendations, which begin by restricting all gas mining to heavy industrial zoning and placing a 3000 foot setback based on an Army Corp of engineers requirements for dams and public safety. Don't assume anyone or any agency is protecting you from industry. It's just not happening. Everything these days is DIY.

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