Pitkin County ponders study of river, real estate
August 9, 2012
ASPEN – A proposed study of the potential effect of river flows on real estate has some Pitkin County commissioners wondering if the effort would be worthwhile.
They heard a presentation on the study Tuesday after the county’s Healthy Rivers and Streams Board recommended it be done, at a cost of $85,000, according to John Ely, county attorney and adviser to the board. Commissioners, who must approve the expenditure, had questions, so an expert was summoned to answer them.
John Loomis, a Colorado State University professor who does research on the economic value of natural resources, described in layman’s terms how the complex study would work.
In a nutshell, a large number of real estate transactions over a period of time – perhaps a decade – would be examined, he said. The study would quantify the value of various attributes for residential properties – everything from the obvious (house and lot size) to views and its proximity to various amenities, including the ski slopes, trails, open space and the Roaring Fork River.
The study would analyze the impact on property value if the upper Roaring Fork flows at reduced levels or dries up entirely, Loomis said.
“What if we made it look like drought all the time?” he said. “Does it matter, and if it does, how big of an effect is it?”
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As an example, Loomis described to commissioners how the methodology was used to determine the decreasing value of homes around a California lake as the lake bed was exposed by drawing down the water.
Locally, previous studies have looked at river health in its relation to the environment or recreation, but in Pitkin County, property values might trump those concerns, Ely said. Real estate is the area’s chief economic driver, and the effect that drawing down the Roaring Fork may have on the local economy is worth quantifying, he argued.
The potential for additional diversions to the Front Range exists via the Fryingpan-Arkansas Project and the diversion system at the headwaters of the Roaring Fork, on Independence Pass, according to Ely.
“The status quo for the Roaring Fork basin may not be the status quo for very much longer,” he said. “I think this is the first step to being able to protect or at least argue adequate opposition if the basin is the next target for the Front Range.”
However, Loomis cautioned, the study might not show a correlation between property value and the state of the river.
“We can’t guarantee that the river’s going to come in as statistically significant,” he said. “There is a risk in that sense.”
If there is a correlation, results of the study could be useful to the county, Loomis said. The conclusions of such studies have been used effectively in court on a couple of occasions, and another such test is coming up, he said.
Whether the results of such a study would hold up in a battle over water was among the commissioners’ concerns.
Commissioner Jack Hatfield also said he couldn’t get past the sense that the report’s conclusions, though based on sales data, would be too subjective to be useful. Commissioner George Newman wondered if the study could truly pinpoint the value of the river on residential property given all the other attributes that a buyer might value in a particular home.
“I think, at least in the Aspen market, … people don’t come here specifically looking for a riverfront property,” Newman said.
No decision to go forward with the study, or not, has been made, but Commissioner Rachel Richards voiced support for an effort to quantify the value of a healthy river. Without it, the county has no concrete evidence to use in a fight over future diversions, she said.
“When the day comes, we’ll have nothing but a big bag of subjective to roll out there,” Richards said.