Last year Denver passed an “affordable housing program” that requires multifamily developments to pay linkage…
FAA giving out free frequent flyer “gifts” to you and your real estate
Ready to lose 100k+ on your real estate in Colorado? Are you now a member of the “frequent flyer” club without leaving the ground? The FAA is working on their next generation of air traffic control which will drastically alter the approach and takeoffs at airports throughout the country including airports throughout Colorado. Are you impacted? How would you like to have a superhighway now above your house or business that never existed before? The impacts in Colorado could drive you crazy.
Why the change in flight plans?
NextGen is the FAA-led modernization of our nation’s air transportation system. Its goal is to increase the safety, efficiency, capacity, predictability, and resiliency of American aviation. This overhaul brings together innovative technologies, capabilities, and procedures that improve how we fly from departure to arrival.
Airlines, general aviation operators, pilots, and air traffic controllers gain better information and tools that help passengers and cargo arrive at their destinations more quickly, while aircraft consume less fuel and produce fewer emissions. This transformation is being achieved through an ongoing rollout of improvements which began in 2007. NextGen remains on target to have all major components in place by 2025.
The modernization of the National Airspace System is one of the most ambitious infrastructure projects in U.S. history.
In order to facilitate Next Gen, the FAA is changing flight patterns to make them more efficient. This change in flight patterns will cause noise to also shift to the new flight paths. In the past you might not have had planes flying directly overhead, with the new changes you could now have hundreds of planes passing above your property
How do you know if you are impacted?
I grew up in Atlanta and went to school not far from the airport. Going to school I rarely heard airplanes even though the airport was not far away. This all changed when a new runway was added that took the flight path directly over the school. Every 20 minutes or so you would hear a plane and when they were large planes you could not only hear but feel the sound it was that loud. I expect similar experiences to take place with the recent shift in flight paths throughout Colorado
The FAA released proposed maps with the prospective changes highlighted. Many of the changes will drastically alter how flights arrive into and out of the metro area. One note, from this map unless you are a pilot it is difficult to know what the noise impact will be as I couldn’t tell the elevation of each new flight path. For example, the new flight path could be at 10k feet or 2k feet. At 10k you likely wouldn’t be bothered, at a much lower elevation you would clearly notice
Lawsuits tell the story.
Noise complaints exploded from San Diego to Charlotte, North Carolina, to New York as flights were concentrated at lower altitudes, in narrower paths and on more frequent schedules. The new paths often reduce the number of people exposed to noise, but those who get noise get it far more consistently.
In Phoenix, redrawn flights over vintage neighborhoods like Lake’s affect some 2,500 homes, prompting a court challenge from historic districts and the city (patch).
If you think the impact will not be that bad, think again. Maryland Gov. Larry Hogan recently ordered the state’s attorney general to prepare a lawsuit against the FAA over routes he said were making families “miserable in their own homes.” Lawsuits due to huge impacts from noise are springing up throughout the country.
What does this mean for real estate values?
Roberto Vittori said he didn’t know about the FAA’s plans when he bought his home near Georgetown University’s medical school. Vittori wrote in a legal declaration last year that he spent $12,000 on soundproof glass for the home’s double-paned windows, but it was “still inadequate to muffle the noise.” (patch) Whether it is a train, plane or automobile (highway) noises decrease the value of the property. The question is how much?
Nationwide, the negative effect of aircraft noise has been studied by Randall Bell, founder and director of Real Estate Damage Economics in Laguna Beach, Calif. He’s the author of the article “The Impact of Airport Noise on Residential Real Estate” in the Appraisal Journal.
Bell said homes under or near flight corridors of national or international airports experience loss in property values. He noted that a Federal Aviation Administration study estimated that loss in value is minimal for lower-priced homes but can be as high as 19 percent for moderate-priced homes. (Chicago Tribune)
The impact is so profound that property owners in Cook County, Chicago metro, are appealing their tax assessments and the assessor’s office is performing a noise impact study to see how much of a reduction in values are warranted.
With an average sold price in Denver of 540k, I suspect a similar outcome in Denver as new flight paths are solidified. Can you imagine buying a 540k home and losing 108k overnight due to the change in flight paths? This will happen throughout the metro area, unfortunately it is not clear yet exactly who will be the “lucky” recipients of the new flight paths and reduction in value.
Along with impact to residential values, commercial properties will no doubt be impacted especially office and multifamily. For example, if someone were renting an apartment, they would want a discount to live under a flight path. How much of a discount is the million-dollar question? Office properties will have similar issues attracting high quality tenants with the increased noise. Unfortunately, it is not pragmatic to retrofit a large commercial building with soundproofing as the cost would likely be prohibitive. Although there are no long term studies on the commercial real estate price impact as the current change in flight plans is a unique event, there will no doubt be value decreases due to the change in rental rates that tenants are willing to pay.
In Phoenix, residents reported that “flights rattled the doors and windows in their homes and that they had trouble sleeping, sometimes even wearing earmuffs to mute the noise when they were indoors.” (ABC). Unfortunately the noise is just the beginning of the “journey” property owners will face as values will decline substantially. Property owners are in for a surprise in the coming year and it is not a gift you want to receive. Will you get a “gift” from the FAA and become a member of the frequent flyer club without leaving your property? Unfortunately, this membership and gift is not returnable!
- Link to FAA Flight Path Changes: https://www.faa.gov/nextgen/nextgen_near_you/community_involvement/den/media/DEN_iPad_v4_041217_HB.pdf
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is the recognized leader in Colorado Hard Money and Colorado private lending focusing on residential investment properties and commercial properties both in Denver and throughout the state. We are the Colorado experts having closed thousands of loans throughout the state.
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