HOW GAS DRILLING THREATENS TO LOWER YOUR PROPERTY VALUES
If you have a gas lease, your neighbor has a gas lease or if you live in a community that has a lot of gas leases, it is likely that the value of your property will decrease and it may become almost impossible for you to sell your home. This is because almost all banks and insurance companies consider gas-leased land to be an unacceptable risk and will not give mortgages on or refinance properties that are leased or have gas wells.
In today’s New York Times Ian Urbina examines these issues in depth:
“But bankers and real estate executives, especially in New York, are starting to pay closer attention to the fine print and are raising provocative questions, such as:
What happens if they lend money for a piece of land that ends up storing the equivalent of an Olympic-size swimming pool filled with toxic wastewater from drilling?”
Lenders such as the FHA (Federal Housing Administration) and the Department of HUD (Housing and Urban Development) will not provide financing if surface or sub surface gas rights have been leased within 300 feet of a residential structure OR within 300 feet of property boundary lines. This can affect you if one or more of your neighbors has leased, even if you haven’t, and can also affect you if you are subject to New York State’s compulsory integration laws, which allow wells to be drilled under your property if 60% or more of the property adjacent to you has gas leases.
Experts say that the inability to get mortgages for pending residential sales will eliminate as much as 90% of potential purchases. This dynamic will create a dramatic negative impact on property values due to their lack of marketability and therefore demand. As real estate values decrease, assessment rolls will be impacted and ultimately the tax base. Some local communities will likely have no choice but to raise taxes to pay for the shortfall.
Communities are already seeing a softening of home sales as buyers are holding off making any investment until the issue of fracking is resolved. Ulster County (NY) real estate brokers report that the potential of hydrofracking is hurting their important second-home buying business. The permit conditions and regulations that the New York State DEC has released to govern hydraulic fracturing (the dSGEIS) makes little mention of how fracking will devalue property and lower tax assessments, nor does it provide any remedies to those affected. In fact Section 22.214.171.124 of the Document says about Propert Values:
“At this level of analysis, it is impossible to predict the actual impacts of developing the Marcellus and Utica shale natural gas reserves on individual property values. However, some predictions can be made with regard to the general impact of mineral rights on property values and the impact of well development on adjacent properties.
Revised Draft SGEIS 2011, Page 6-250, 6-251.”
This is only one of the many problems and issues that will affect you, your family and your community.
FIND MORE RESOURCES ON FRACKING HERE