A recent study conducted by Joint Venture Silicon Valley, a non-profit organization that provides analysis on issues affecting the Silicon Valley economy and quality of life, found that small cell infrastructure had no negative effect on real estate values. Entitled “Economic Impacts to Residential Real Estate from Small Wireless Facilities” the study was undertaken to address the belief held by some real estate agents that wireless sites near residences can cause property valuation reductions of up to 20 percent. Previous studies by the organization on the impact of wireless sites on real estate valuation focused on wide-area coverage from macro sites.
“An assertion that wireless sites cause devaluation is often raised during planning commission, city council, county board, and permit appeal hearings for small wireless facilities,” the study read. “To address the gap between extant belief and evidence-based economics, our study focused on whether objective evidence in real estate sale records shows residential real estate valuation impacts from small cells.”
The study applied a spatial difference-in-differences approach, a widely-used economic analysis method used to estimate the impacts from proposed development in and near residential areas. The study examined the question, “Do wireless small cell sites have an effect, either positive or negative, on the valuation of residential real estate?” The study also reviewed previous studies, and examined the question of whether or not the oft-asserted 20 percent reduction in property valuation appeared in the results.
Two datasets were used in the study: 1,734 small cell sites installed in the State of California over the time period from 2010 to 2020, and a dataset of 11,684,458 real estate transactions statewide over the same ten-year period. Both the wireless and real estate datasets were provided to Ralph B. McLaughlin, Ph.D. (Chief Economist at Haus.com, and former Chief Economist at Trulia) a doctoral-level economist skilled in urban planning, policy, land use, and housing. Dr. McLaughlin’s results were in turn provided to Joint Venture Silicon Valley for final authorship of the study. Aside from formatting the results as necessary for study authorship and production, no adjustments were made to the analysis results.
Across a wide California geographic area (roughly defined as Santa Barbara to Santa Rosa to Sacramento, CA) the study found “effectively zero statistical evidence that proximal small wireless communication facilities (or ‘small cells’) negatively impact residential real estate valuations.” Some evidence in the study found that residential real estate valuations actually increased within 10 kilometers after construction of a small wireless facility.
“In cases where there is a statistically significant negative impact, the impact is not economically significant. In cases where there is a statistically significant positive impact, some impacts are economically significant whereas others are not economically significant,” the study reported. “Support for the extant belief that wireless sites near residences can cause residential property devaluations of up to 20% is not evidenced by our study.”