Property Value Impacts from the Scotian Materials Fall River Quarry

What follows is our response to the poor-quality research Scotian Materials has provided to the public in answering their letters of concern and query as to what impact a quarry will have on home values.

In response to public concern over home values and how a quarry will affect them, Mr. MacPherson claims the homes will not be affected. He referred to a report prepared by Turner Drake & Partners Ltd (TURNER DRAKE & PARTNERS). He stated in his letters, “Results from a 2015 study done by local real estate research firm Turner Drake & Partners Ltd. examined all MLS listed residential home sales in the Halifax area from 2004 – 2014 and concluded that there is no such market evidence to suggest a pattern of negative impact on residential housing prices or pricing trend due to the proximity of a quarry in the city.1 In fact, single detached homes often sold for more inside 2km 2-5 km buffers from existing quarries as opposed to 5km away or further during this time.2,9 ” We dispute this conclusion and find the research to be of very poor quality.

  1. TURNER DRAKE & PARTNERS did not assess “all MLS listed residential homes sales in the Halifax area”. They assessed homes within communities around existing quarries.
  2. None of these quarries were developed during the period studied and most of the developments around those quarries occurred after the quarries were long in existence so no causal impact of a newly developed quarry is observable.
  3. Comparisons should be categorized as 2-3 bedroom homes, 4–5 bedroom homes, urban sized or city lots, 1.5 – 2 acre lots, municipal water or wells, value-adding features such as garages, landscaping, finished basements, pools. Without holding other variables constant it is impossible to state whether the homes near quarries would have sold for more if located elsewhere.
  4. The housing in the Miller Lake West subdivision is the only housing within the 2 kms radius of the site (see the blue line on the chart reproduced below). Based on the TURNER DRAKE & PARTNERS valuations, the home values in the area saw a consistent appreciation until 2012 – 2014, when the mean value of homes decreased. The homes in our area saw a bigger increase and decrease than in any of the other areas. Considering the time frame and what may have influenced this plummeting of home valuations, it is possible the proposed quarry caused the sale prices to reduce in Miller Lake West.
  5. Because Turner Drake & Partners relied on sale prices of homes, I would be interested to see how many homes sold in Miller Lake West. Their chart may indeed be based on the sale of one home per year, and thus any “average” becomes even more meaningless. In addition, what about the home owners who decided not to sell? What about the homeowners who were advised by their agent not to sell or to reduce the price because of the proposed quarry? This is not conjecture, these things happened. Please look at footnote #6 in their document which stated that “outliers” have been removed. This means they removed any particularly high- or low- priced homes from the calculations! Why would they remove house prices because they were 3 or more standard deviations from the mean? How many were removed? I can’t think of a good reason why outliers would be removed in this type of “analysis,” except that it did not fit with the conclusion the client wanted and this became a convenient and technical way to get rid of data they didn’t want. Unfortunately, I understand outliers and this is the improper use of outlier removal. At the very least the outlier values should be charted if they are kept out of the mean. What happened between 2009 and 2011, did no homes sell or were so-called “outliers” removed to prevent it from looking like homes near the proposed site were selling for much more than the latest sales?Screen Shot 2016-06-02 at 10.02.24 AM
  6. The Fall River neighborhood of Miller Lake West commenced development 11 years ago with no consideration of a quarry in mind. The covenants restricted the homes built to a particular grade and style of home. The value of homes built would be signatory of the desired area and lifestyle. We did have an equine facility in our neighborhood until a few years ago, and the idea was to develop an equestrian community thus the name of one street, Preakness Crescent. The house prices in Miller Lake West reflect the location and desire for people to live near lakes, rivers and a game sanctuary.  The question at issue is whether the house prices here will be lowered due to the addition of a quarry less than 2km away, not the price of homes built after quarries were established.
  7. The report ignored the fact that the proponents are considering property next to an established neighborhood. This is the point of value in following Diana Hite’s methodology. When you consider an existing community and insert an incompatible and unfavourable factor, it estimates the economic impacts. This has been studied by our community for the past 4 years and was also reviewed by ATN Group in preparing their report. This hedonic formula is used in a variety of assessments including quarries, new highways, landfills and industrial parks all over the world.
  8. The graph presented by Turner Drake & Partners could easily be used to support our claim that a quarry has already hurt the housing market in our area, so it’s difficult to see how the proponent can use it as proof that it will have no impact. Consider the following explanation, just as plausible: up until the threat of the quarry came into play, the diagram below illustrates the development of a new residential community, and also illustrates a consistent increase in the sale price of homes in the area. In fact, it saw a truly steep incline as larger homes and more impressive homes were built and sold. The area became more and more desirable. Until 2012. The growth and appreciated homes prices started to slow with the formation of a proposed quarry. Then in 2013 and 2014 as the conflict continued and the proponent didn’t appear to be going away, home sales stalled, prices dropped as people actually started dumping their homes to get out of them. Until 2012, homes within 2 kms of the proposed quarry were on track to become some of the most desired and valuable properties in the area.

There is one last aspect to the biased nature of this report. I would warn any and all property owners to continue to use caution when reading any report commissioned or prepared by the proponent. As I have stated in the past, we seek accuracy from every expert we approach.  Over and over, we find it necessary to correct, enhance or fill in blanks in many to most statements made by Rob MacPherson regarding the risks and impacts this quarry will have or has already had on home values in Fall River. This report is an excellent example of just that. I guess this just proves that one can always find an “expert” to sort through facts, choose some, and ignore others, and come to a conclusion that pleases its client.

I maintain the contents and conclusions in this report are inconclusive and prepared without a full scope. The outcome of this study cannot be considered as verification of Rob MacPherson’s claims simply for the reason it does not provide an accurate comparison of conditions or setting. It is in essence comparing apples to oranges.

Member of the Nova Scotia Road Builder’s Association Robert MacPherson. Scotian Materials Limited. Rob MacPherson. Contact. Address: 100 Venture Run, Suite 103. Dartmouth. #scotianmaterials Halifax quarry quarries aggregate gravel #noFRquarry  Scotian Materials Ltd.