The cost of the pipeline on your property values

A FERC comment I am filing today…

PennEast recently met with representatives of Lower Saucon Township, PA in a closed door meeting about the pipeline. The representatives published the information discussed at the meeting under PA’s sunshine laws, including a presentation given by PennEast that is available at the URL below:

Page 18 of the presentation quotes a study done by Allen, Williford & Seale in the Saddle Ridge subdivision in Dallas Township, Luzerne County PA. The slide indicates:

– Studied Saddle Ridge subdivision in Dallas Township, Luzerne County from 2009-2014:
– Allen, Williford & Seale Residential Study
– Subdivision developed beginning in 2005 around an existing 24-inch pipeline ROW
– Study showed undeveloped lots within the ROW sold at a 16% discount compared to lots outside the ROW
– However, existing homes within the ROW sold at a 3% premium compared to homes outside the ROW
– Conclusion: Pipeline easement has no negative impact on the sales prices of existing homes along the ROW

The full study is available here:

After analyzing this study it is clear that it is entirely invalid and the data cited does not support the author’s conclusions.

First, some background:

The study includes:

– The study covers 27 houses in the subdivision: 20 houses not encumbered with a pipeline easement, and 7 that are encumbered.

– The study compares, in part, the average and median sale prices of the houses from 2009-2015, and attempts to also match up encumbered/not encumbered houses by sale date/size (although the actual data is not shared).

– The study also compares unimproved lot sales

Here are some of the many issues with this study that invalidate the author’s line of reasoning entirely:

1) Only 7 houses in the study are on the pipeline route. This is a very small sample on which to base such broad conclusions.

2) Average and median prices are compared between the two groups (encumbered and unencumbered) over a 5 year period, 2009 to 2014. This was the period during the housing crises when house prices crashed. Comparing 27 houses over this range of time is severely flawed and invalid. The author’s own data supports this information. Despite saying that the houses were largely “similar”, in fact the home prices involved varied from $284,640 to $458,872. There is a massive $174,232 (60%) spread between the prices.

3) The study does not measure time on the market or homes that were withdrawn from the market due to lack of interest. A common observation from Real Estate Professionals is that not only do properties with pipeline easements suffer in terms of price, many times the properties do not sell at all. This study did not look into this aspect of the problem at all.

4) The study did not look into important price determiners such as corner lots and adjacency to empty lots in house prices. The encumbered properties as a whole had fewer neighbors around them which adds significant value to properties.

5) A minor point – the study talks about “encumbered” land vs. “unencumbered” land. The legal definition of encumbrance is: “An encumbrance is a right to, interest in, or legal liability on real property that does not prohibit passing title to the property but THAT DIMINISHES ITS VALUE (emphasis mine)”. By using the termed “encumbered” the authors are unwittingly acknolwedging that easements decrease property value.

6) Most critically, the study failed to investigate moribund lots that remain undeveloped. The study includes parcel maps of the entire sub-division, indicating roughly 100 parcels, with the parcels split between “Phase 1” development and “Phase 2”. Phase 1 development is complete and consists of houses present in this map on Pennbrook Lane, Canter Drive, and the southern reach of Saddle Ridge Road:

Phase 2 has just commenced, and includes houses along the northern portion of Saddle Ridge Road.

Note that large portions of Phase 1 is undeveloped land. Where is this undeveloped land located? Why, on the pipeline easement of course! In total there are only 7 houses in the whole subdivision that are along the pipeline easement. The other 9 lots with pipeline easements are undeveloped. And Saddle Ridge developer is now pushing Phase 2 into areas well north of the easement, and Phase 2 is much more densely packed than Phase 1. Why is the developer situatating phase 2 north of the pipeline easement? And why is phase 2 much more densely packed than phase 1? Because Phase 1 has a pipeline easement through it, of course.

7) If you zoom out on the map, you in fact see that this area of Dallas Township is characterized by many densely packed suburbs – except in the vicinity of this pipeline easement. In the vicinity of the easement houses are very sparse and development ends. This pipeline was built in the 1950’s and 60 years ensuing every development in the region has avoided it. This shows clearly how families are unwilling to buy houses that are on or close to natural gas pipelines. Developers know this and as a rule do not even bother building houses along the route.


It is abundantly clear from these points that not only is the Allen, Williford & Seale study deeply flawed and invalid, it is highly deceptive and the underlying data supports the exact opposite conclusion that the authors posit.

While they claim that pipeline easements have no impact on housing prices, in reality what the data shows is that pipeline easements make it extremely difficult to sell a house on such encumbered land at all, and that developers avoid land with such easements and leave them unimproved.  Look at maps of PA and you’ll see housing developments invariably stop at the edge of pipeline easements, and that housing density drops off dramatically around such easements.  The Saddle Ridge sub-division provides a text-book example of this and demonstrates how pipelines negatively impact the ability to sell land.



Published by

Mike Spille

I'm a thinker, an analyzer, a synthesizer. Maybe not in that order. I live in West Amwell NJ with my wife Kristina, our two kids Day and Z, our two dogs Fern and Cinna, and three cats Ponce de Leon, Oliver, and Doolittle.

One thought on “The cost of the pipeline on your property values

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s