PROPERTY VALUE DIMINUTION ANALYSIS RESULTING FROM NUCLEAR WASTE SHIPMENTS THROUGH WASHOE COUNTY

AND ELKO COUNTY, NEVADA

February, 2002

Table of Contents 1.0 INTRODUCTION....................................................................................................... 1 2.0 METHODOLOGY ..................................................................................................... 3

2.1 Washoe County Application of Diminution Factors ................................................................................. 4 2.2 Elko County Application of Diminution Factors ....................................................................................... 5

3.0 RESULTS .................................................................................................................. 10 3.1 Washoe County ................................................................................................................................................. 10 3.2 Elko County........................................................................................................................................................ 11

BIBLIOGRAPHY........................................................................................................... 13 Table of Tables Table 1 Diminution Factors in Clark County, Lenders and Bankers Survey, One – Mile

and One to Three-Mile Distance by Property Type (In percent) ................................. 4 Table 2 Washoe County Land-Use Codes .......................................................................... 5 Table 3 Elko County Land Uses Studied ............................................................................ 8 Table 4 Washoe County Property Value Impacts (in Millions $) .................................... 10 Table 5 Washoe County Assessors Estimate of Property Value Losses under Three

Accident Scenarios, by Property Type, and Distance ................................................ 11 Table 6 City of Elko Property Value Impacts (in Thousands $)....................................... 12 Table 7 Elko County Assessor's Estimate of Property Value Losses by Scenario .......... 12 Table of Figures Figure 1 Study Area in Washoe County and Elko County................................................. 2 Figure 2 Limit of One-Mile Transportation Corridor for Washoe County......................... 6 Figure 3 Limit of Three-Mile Transportation Corridor for Washoe County...................... 7 Figure 4 One-Mile Transportation Corridor for Elko County ............................................ 9

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1.0 INTRODUCTION

Stigma resulting from an amplified perception of risk has been associated with all

aspects of nuclear energy including the transportation of nuclear waste, and stigma has

been associated with property value diminution. If the DOE goes ahead with its plans to

construct a repository at Yucca Mountain, Nevada for the consolidation of Spent Nuclear

Fuel (SNF) and High-Level Nuclear Waste (HLNW), these wastes will need to be

shipped from the 77 facilities where they are currently stored. This will result in 49,500

shipments of 77,000 metric tons of nuclear waste being shipped across the United States

over the next 30 years. While no formal decision has been made as to the mode for

transport and the shipment routes to be used, based on current regulations for shipping

hazardous materials, it is likely that nuclear waste will go through Washoe County and

Elko County, Nevada in route to the Yucca Mountain facility (Figure 1). Given the high

level of public concerns over the risks of shipping nuclear waste, the probability of an

incident (even with no release of radioactive material) may result in significant property

value diminution over an extended period.

The purpose of this study is to provide the first estimation of the magnitude of

property value impacts that are likely to occur from nuclear waste shipments in Washoe

County and Elko County, Nevada. These estimations are based on the application of

diminution factors reported in an earlier survey of Clark County lenders and appraisers to

residential, commercial, and industrial property values within three miles of likely

nuclear waste shipment routes in Washoe County and Elko County. In addition,

interviews were conducted with both the Washoe County Assessor and the Elko County

Assessor in order to determine their expert opinion of the level of diminution that will

likely be experienced, if any, along the nuclear waste shipment routes. Both the Washoe

County Assessor and the Elko County Assessor indicated that the level of diminution that

they expected would fall within the range of diminution factors identified in the earlier

Clark County Study.

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Figure 1 Study Area in Washoe County and Elko County

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It is important to note that this study did not look at the full range of land uses in

Washoe County and Elko County. In fact, while all residential property was included,

only a limited number of commercial and industrial land uses were considered. Of

particular note, this study did not address the land uses associated with the two counties’

primary economic sectors, as well as, the large number of parcels of land that are yet

undeveloped. Therefore, the projection of potential property value diminution described

in this report underestimates the real vulnerabilities to future property values within these

Counties from a nuclear waste shipment campaign.

2.0 METHODOLOGY

As part of an earlier series of studies to assess the affect of nuclear waste

shipments in Clark County, Nevada, a survey was conducted “to identify the opinions

and perceptions of lenders and appraisers regarding the potential effect on property

values of the proposed shipments of high- level (nuclear) waste…under three scenarios

and for three different types of land uses. In addition, the lenders and appraisers were

asked to estimate potential property values at distances up to one mile along the

transportation corridor and at distances of one to three miles.”

In all, 18 bankers and 35 appraisers were contacted. The 18 bankers represented

the entire population of Clark County banks involved in lending for residential,

commercial, or industrial properties. The appraisers represented all appraisers certified by

the American Appraisal Institute with five years or greater experience assessing property

values in Clark County. Of the 18 bankers contacted, 15 completed the survey. Twenty-

five appraisers were surveyed for a participation rate of 71.4%.

The three scenarios used in the survey ranged from a benign, no- incident

scenario; to an accident event that results in no release of radiation; to a third scenario

which is characterized by a significant but plausible accident event resulting in the

release of radiation. Based on the three scenarios, the two professional groups were asked

to evaluate any property value changes to an average residential single-family home, an

office building and an industrial warehouse at two distances from a proposed shipment

route. The results of this survey are described in Table 1.

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Table 1 Diminution Factors in Clark County, Lenders and Bankers Survey, One – Mile and One to Three-Mile Distance by Property Type (In percent)

Scenario 1 Scenario 2 Scenario 3 Lender Appraiser Lender Appraiser Lender Appraiser One-mile Distance

Residential 2.00 3.5 6.18 7.96 29.00 33.79 Commercial 0.56 3.21 4.00 7.39 22.00 31.88 Industrial 0.56 1.25 4.00 5.29 21.25 25.54 One-three mile

Residential .50 1.46 1.64 4.00 20.00 23.65 Commercial .56 1.25 1.00 3.04 16.67 20.50 Industrial .56 .83 1.00 2.08 10.00 16.73

In order to provide a first estimation of the range of property value losses that

may occur as a result of the nuclear waste shipment campaign in Washoe County and

Elko County, the rates of diminution identified by lenders and appraisers in Clark County

were applied to residential, commercial and industrial property values along the potential

transportation corridors (Table 1). The property value data used in this analysis was

acquired from the County Assessors in Washoe County and Elko County. Because of

differences between the two counties in how property value data is stored, the approach

to estimating property value impacts was adjusted to meet the unique data formats within

each county.

2.1 Washoe County Application of Diminution Factors

Because Washoe County has a GIS to utilize in these calculations, the calculation

procedure was quite straightforward. All parcels intersecting a 1-mile and a 3-mile buffer

were extracted from the county GIS. Land use codes and assessed value from the

Assessor’s data were then “joined” to the spatial data using a relational database

procedure. The spatial (parcels) data were linked to the assessed values using the APN

(Assessor’s Parcel Number) present in both datasets. Land use codes were then used to

collapse the various activities present into the broad categories of Residential,

Commercial, and Industrial properties that were used in this study as described in Table

2.

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Table 2 Washoe County Land-Use Codes Code Description Category 10 Low Density Rural Residential 11 Medium Density Rural Residential 12 High Density Rural Residential 13 Low Density Suburban Residential 14 Medium Density Suburban Residential 15 High Density Suburban Residential 16 Low Density Urban Residential 17 Medium Density Urban Residential 18 High Density Urban Residential 21 Office Commercial Commercial 30 Industrial Industrial Source: Washoe County Assessors Office

The Washoe County Assessor’s data included 132,778 parcels with a total

assessed value of over $9.4 billion. Of these parcels $4.7 billion falls within the 3-mile

corridor of the shipment route. Of that, $3.4 billion can be assigned to the 3 property

types evaluated and $2.5 billion is within the one-mile impact zone (Figure 2 and 3).

2.2 Elko County Application of Diminution Factors

Because Elko County does not maintain its data in a GIS format, a different

approach was used for the spatial extraction of corridor parcels. First, only those parcels

within the City of Elko municipal were evaluated. All parcels in Elko are within three

miles of the interstate highway. For the spatial calculations of parcels within the 1- mile

corridors, location maps provided by the Elko County Assessor were scanned on a flatbed

digital scanner. This data was then geo referenced to state plane coordinates, and placed

into a GIS with a street and highway network constructed from Census TIGER files. It

was then possible to determine what map areas were within the 1-mile transportation

corridor. Using the land-use codes as described in Table 3, the property value data was

grouped into three categories; residential, commercial, and industrial.

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Figure 2 Limit of One-Mile Transportation Corridor for Washoe County

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Figure 3 Limit of Three-Mile Transportation Corridor for Washoe County

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As noted above, because of data limitations, the analysis of property value

impacts study for Elko County was confined to the City of Elko. With the City of Elko,

all parcels are with the three miles of the transportation corridor that may be used to

transport high- level nuclear waste. The Elko County Assessor’s data included 5,521

parcels with a total assessed value of over $291.9 million.

Table 3 Elko County Land Uses Studied

Code Description Category 20 Single Family Residential Residential 21 Condo’s Residential 22 Mobile Homes Converted to Real Property Residential 23 Mobile Homes Personal Property Value – Unsecured Rolls Residential 25 Condominium or Town House Valued as Apartment Use Residential 26 Personal Property Mobile Home Value on Secured Rolls Residential 30 Duplex Residential 31 Two Single Family Residence Residential 32 Three – Four Units May Include Mixed Residences Residential 33 Five – Nine Units May Include Mixed Residences Residential 34 Ten + Units Residential 41 Office, Professional, and Business Services Commercial 50 General Industrial – Light Industrial Trucking and Warehousing,

Service, Repair Industrial

51 Commercial Industrial – Retail or Office Use Combined with Industrial Use

Industrial

Source: Elko County Assessors Office

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Figure 4 One-Mile Transportation Corridor for Elko County

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3.0 RESULTS 3.1 Washoe County

When the diminution factors provided by the Clark County lenders and appraisers

are applied to residential, commercial, and industrial land uses, residential properties

within Washoe County experience the largest level of property value loss under all of the

alternative transportation scenarios. In the event that transportation proceeds without

incident (Scenario 1), the level of diminution estimated using the rate of loss indicated by

the Clark County lenders and appraisers would range from $71.5 million to $149.2

million (Table 4). Residential property value loss could grow to $224.8 million to $367.5

million in the event of a nuclear waste transportation accident even if there were no

release of radiation (Scenario 2). The level of loss is estimated to grow to $1.5 billion to

$1.8 billion in the event that there was a nuclear waste shipment accident that resulted in

a release of radiation as described in Scenario 3 (page 3).

Table 4 Washoe County Property Value Impacts (in Millions $)

Given the nature of the economy in Washoe County, a larger level of loss is

estimated for industrial properties than for commercial properties under each of the

scenarios. In the event that the nuclear waste shipments proceed without incident,

industrial properties could experience fair market value losses of $6.3 million to $13

million, while the loss to commercial properties could reach $2.6 million to $11.5 million

(Table 4). These losses could grow to $37.7 million to $51.1 million for industrial

properties and $13.5 million to $26.7 million for commercial properties in the event of an

accident that does not result in any release of radiation. A more serious accident could

result in losses of fair market value for industrial properties of $209.7 million to $264.4

million and commercial property value losses of $92.2 million to $127.5 million.

Residential Commercial Industrial

Groups Lenders Appraisers Lenders Appraisers Lenders Appraisers Scenario 1 $71.5 $149.2 $2.6 $11.5 $6.3 $13

Scenario 2 $224.8 $367.5 $13.5 $26.7 $37.2 $51.1

Scenario 3 $1,563 $1,835.5 $92.2 $127.5 $209.7 $264.4

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Subsequent to applying the diminution factors to the fair market value for the

three land uses – residential, commercial, and industrial - within three miles of the likely

transportation corridor in Washoe County, the results were presented to the Washoe

County Assessor for his expert review and comment. The Washoe County Assessor

indicated that the range of property value loss that would likely occur if the DOE

proceeds with the shipment of nuclear waste through Washoe County would fall within

the ranges that had been estimated. Specifically, the Washoe County appraiser indicated

that the diminution factors indicated by the Clark County appraisers would be closest to

his own estimation of loss for all properties, distances and scenarios, except for

residential and commercial properties under scenario 1 where the diminution factors

estimated by the Clark County’s lenders’ were closest to his expert judgment (Table 5).

Table 5 Washoe County Assessors Estimate of Property Value Losses under Three Accident Scenarios, by Property Type, and Distance

Washoe Fair Market Property Value Diminution (in thousands) Scenario 1 1 mile 1-3 miles Total

Residential 2.00% $50,812 0.50% $20,659 $71,471Commercial 0.56% $1,644 0.56% $927 $2,571Industrial 1.25% $10,796 0.83% $21,704 $32,500Total $63,252 $43,290 $106,542

Scenario 2 1 mile 1-3 mile Residential 7.96% $202,232 4.00% $165,273 $367,505 Commercial 7.39% $21,697 3.04% $5,030 $26,727 Industrial 5.29% $45,690 2.08% $5,439 $51,129 Total $269,618 $175,743 $445,361

Scenario 3 1 mile 1-3 mile Residential 33.79% $598,819 23.65% $977,178 $1,575,997 Commercial 31.88% $93,599 20.50% $33,922 $127,521 Industrial 25.54% $220,589 16.73% $43,748 $264,337 Total $913,008 $1,054,847 $1,967,855 Source: Washoe County Assessor

3.2 Elko County

In Elko County, like Washoe County, property value losses under each of the

three scenarios were highest for residential land uses (Table 6). Under Scenario 1, a loss

of $6.4 million to $11.4 million can be anticipated at a distance of 3-miles from the route

for residential properties, while the combined losses for commercial and industrial

properties would be $307 thousand to $824 thousand. Under Scenario 2, $19.8 million to

$$24.7 million for residential properties, while the combined commercial and industrial

losses could reach $1.87 million. Under Scenario 3, estimates show losses in residential

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property values reaching $98.9 million to $115.5 million. The loss to industrial and

commercial properties under this scenario could reach $ 10.6 million to $ $13.7 million.

Table 6 City of Elko Property Value Impacts (in Thousands $)

In Elko, after the diminution factors identified by the Clark County lenders and

appraisers was applied to residential, commercial, and industrial properties within three

miles of the likely nuclear waste shipment route, the results were presented to the Elko

County appraiser for his expert review and comment. The Elko County Assessor

indicated that the range of losses identified by the appraisers would most closely reflect

his judgment of the potential levels of property value loss for each land use studies –

residential, commercial, and industrial – under each of the three scenarios (Table 7).

Table 7 Elko County Assessor's Estimate of Property Value Losses by Scenario

Elko Fair Market Property Value Diminution (in thousands)

Scenario 1 Percent

Diminution 1 mile Percent

Diminution 1-3 miles Total Residential 3.50% $10,782 1.46% $703 $11,485 Commercial 3.21% $296 1.25% $7 $303 Industrial 1.25% $438 0.83% $83 $521 Total $11,516 $793 $12,309

Scenario 2 1 mile Total Residential 7.96% $24,522 4.00% $193 $24,714 Commercial 7.39% $681 3.04% $17 $698 Industrial 5.29% $1,853 2.08% $209 $2,062 Total $27,056 $418 $27,474

Scenario 3 1 mile Total Residential 33.79% $104,094 23.65% $11,384 $115,478 Commercial 31.88% $2,940 20.50% $112 $3,052 Industrial 25.54% $8,946 16.73% $1,678 $10,624 Total $115,979 $13,174 $129,154 Source: Elko County Assessor’s Office

Residential Commercial Industrial

Groups Lenders Appraisers Lenders Appraisers Lenders Appraisers Scenario 1 $6402 $11,485 $55 $303 $25 $521

Scenario 2 $19,827 $24,715 $374 $698 $1,501 $2,062

Scenario 3 $98,965 $115,478 $2,120 $3,052 $8,446 $10,624

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BIBLIOGRAPHY Urban Environmental Research, LLC, (2001). Clark County Property Value Report on

the Effects of DOE’s Proposal to Ship High Level Waste to a Repository at Yucca Mountain.