A new study from the Center for Agricultural and Rural Development (CARD) at Iowa State University (ISU) suggests that large livestock facilities have a moderate effect on residential property values.

The study conducted by CARD economists Bruce Babcock and Silvia Secchi, and Joe Herriges, ISU economics professor, found that living near large livestock confinement units has the greatest effect on home values the closer the residence is to the facility and if the home is sited downwind.

A distance of ¼ mile to the nearest large livestock unit decreases property values by 11% if downwind to the northwest and 7% if downwind to the south. At a distance of ½ mile, property values drop 8 and 5%, respectively. At ½ miles, property values decline only by 3 and 2%, respectively.

The analysis included data on every rural home sold in the Iowa counties of Webster, Humboldt, Hamilton, Franklin and Hardin from the mid-1990s to the summer of 2002.

The study's authors suggest that with the moderate effect on property values, livestock producers wishing to build new facilities might consider paying neighbors for potential declines in property values.

“The size of payments would need to provide the operation the opportunity to be profitable,” says Babcock. “Agreements also would have to include good-faith provisions in which producers agree to follow management practices shown to reduce damage. In return, rural residents would agree to allow the facility to operate.”

For the full report, “Living with Hogs in Iowa: The Impact of Livestock Facilities on Rural Residential Property Values,” log onto CARD's Web site, www.card.iastate.edu.