The Big Property Value Lie at Town of Fort Sheridan Subdivision

In today’s economic climate any additional threat to one’s home value is nothing less than frightening.  Therefore, it is no surprise that homeowners in the Town of Fort Sheridan subdivision in Highland Park and Highwood – and in fact homeowners everywhere – are acutely alert to any factor that might compound the reductions to their home investments.  Given this heightened sensitivity there are those who have chosen to use the threat of reduced property value to whip up support for the economically unsustainable proposal for a Fort Sheridan golf course. In fact, the concern is unfounded and the threat to property value is a lie. A dangerous lie.

I make this assertion very carefully. For the threatened homeowners, millions of dollars in property value are at issue. This is not a matter to be casually trifled with. Nor should uninformed bullies who have their own agenda be permitted to pummel their neighbors with false information. So let’s take a step back, dissect the issue and look at some data and research.

First, it is generally believed that a nearby golf course enhances property value. This perception is the basis of the big lie. In a world where we get our information in 140 character Twitter tweets and news headline sound bites, most would accept this statement as prima facie proof that the proposed Fort Sheridan golf course will enhance their property value. And conversely, the failure to build this course will reduce their property value. But that is not true. It is disingenuous to make this assertion. Here are the facts.

Whose Property Value is Increased by a Golf Course?

In studies of property values in communities with golf courses it was found that the property value increase is directly related to the proximity of the property to the golf course. Those with golf course frontage realized the greatest uplift.  Away from the course, the property value impact of the golf course was negligible. In fact the studies go on to note, the value of properties not having golf course frontage may actually be reduced because they do not have the benefit of the golf course frontage but do have the disadvantages of increased traffic  and noise which may be associated with the course operation.

So truth to lie #1: The property value in the Town of Fort Sheridan subdivision is not, in fact, directly impacted by the golf course unless your property has golf course frontage. Additionally, golf courses have certain negative impact which could actually reduce some property values.

What Is the Basis for the Property Value Uplift?

It is commonly assumed that the golf course amenity drives property value uplift. Amazingly, this is believed by many in the Town of Fort Sheridan who did not buy their property because of the anticipated golf course and do not, themselves, golf.  It just seems so logical and believable. And it is what they are being told.  But it is a lie.

So truth to lie #2: The basis for the property value uplift is attributed to open space, lower development density and an expectation of less traffic. Whether the open space contains a golf course or a park is not material to determining the value of the property.  True, there are those who value a golf course. But there aren’t that many of them. In Lake County the ratio of those who visit the Forest Preserves (about 75% -80% of the residents of the county) versus those who golf (about 3% of the residents of the county) is lopsided. If you want to sell your home, the small group of golf-playing home buyers do not establish your home’s value.

The Facts

For those who support the golf course I know the facts get in the way of their prejudices. I approached this project with an open mind and conducted research regarding this matter. With my Masters degree in Regional Planning, I came to this issue with certain pre-conceived opinions based on prior experience and training. But I knew that this pocket book issue required objective analysis and third party insight. What I found is a fair amount of research on this matter developed over the last 10 -15 years.  Here is a partial annotation of where my information has come from. If you don’t agree with my observations, attack the facts with facts. Do not attack me.

References:

Negative and Positive Impacts of Golf Course Proximity on Home Prices by Paul K. Asabere, PhD, and Forrest E . Huffman, PhD, The Appraisal Journal, October 1996

The Economic Impact of Proximity to Open Space on Single-Family Home Values in Washington County, Minnesota; A report on the findings of a study commissioned May 2007 by Embrace Open Space

The Relative Impacts of Trails and Greenbelts on Home Price by Paul K. Asabere & Forrest E. Huffman Journal of Real Estate Finance Economics October 2007

The Impact of the Little Miami Scenic Trail on Single Family Residential Property Values; A thesis submitted to the Division of Research and Advanced Studies of the University of Cincinnati in partial fulfillment of the requirements for the degree of Master of Community Planning 2008 by Duygu Karadeniz

A Countywide Survey of Lake County Residents for the Lake County Forest Preserve District June 20, 2008

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5 thoughts on “The Big Property Value Lie at Town of Fort Sheridan Subdivision

  1. So you believe that:
    a) A golf course that would appeal to the public can be built for <$5 M
    b) There are private (or other public entities) that would take this project on

    I don't believe it. But it doesn't matter what I believe. I don't know anything about golf course construction but your number is stunning. And I don't hear any private party knocking on the door to operate this facility. But if you can make this work, go for it.

    I also think demonizing the LCFPD is entirely unproductive to your ends.

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  2. I’m sure that if the LCFPD is willing to give up the land, there are many private parties or other government entities that would be willing to gamble on the golf course. At some of the recent meetings, there have been discussions of wonderful new golf courses built all over the US for less than $5 million in the last few years, not the LCFPD’s $25+ million estimate. Since Fort Sheridan will freeze over before LCFPD will give up land that they acquired for free, the issue is whether the Army or other government entities will force their hand to do so due to failure to perform in line with the deed restriction. If that happens, we all should hope we don’t see a Costco move in.

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  3. Thank you, Ed. I appreciate your additional research. In the end, any uplift is due, not to the property as a golf course but to its value as open space. Whether it is 3%, 7% or 20% uplift and within 1500 feet, there is no inherent value in being on a golf course just because people play golf there. The valuation placed on this property is based on many attractive proximate resources. Golf, as a land use, is a non-issue except to the extent it insures open land use.

    As far as joint use of this property, the objection of people in Lake County is simply that the economics of municipal golf operation is a disaster. If the residents of your subdivision want to meet the economic challenge and take the burden and risk off the public, I’m sure this project would proceed rapidly. Just do it.

    But until that time I will stand by my statement that telling people that their property value is dependent upon this property being developed as a golf course is a lie.

    And I say this carefully and respectfully. It is not my purpose to inflame an already overly emotional issue.

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  4. Sonny, it took me five minutes on Google to find more recent studies that counter your thinking.

    http://www.murrayparks.org/content.php?Load=importance.html

    One sample paragraph, which is fairly balanced:

    “When a more detailed analysis of property value impact with distance was conducted on a similar series of golf courses in the city (Lutzenhiser & Netusil, 2001), the greatest premium was found for properties within 200 feet of, i.e., adjacent to, the golf course. Such properties sold for a premium equal to 21 percent of the average value of all properties analyzed. By 1,200 to 1,500 feet from the amenity, the premium had declined to nearly 7 percent of value. ”

    So every home in the Town of Fort Sheridan (since even the Endicott & Lyster corner of the residential area is within 1500 feet of the course area) would be improved by at least 7% and up to 20%+.

    The thing is, the homes in The Town of Fort Sheridan were priced originally, ten years ago, with this uplift in mind. Those who had golf course views in fact paid a premium — along with higher property taxes that go with that higher price — based on proximity to the golf course. The inability to realize similar prices to even the original prices in trying to sell at Fort Sheridan today is to some degree related to the lack of the course. For example, there is a house for sale now on Leonard Wood West listed at $595,000 — this is one of the houses that overlooks the parade ground and the holes that were there when the house originally sold for over $700,000.

    Another cite:
    http://www.aae.wisc.edu/Provencher/Provencher_Sarakinos_07.pdf
    “Lutenhiser and Netusil (2001) find that properties in Portland, Oregon “adjacent” to open space (within 200 feet) were more valuable than those further away, with this price effect being greatest for golf courses and natural area parks (those parks designed to preserve natural habitat and provide resource-based activities, such as walking and bird-watching)”
    Why not provide both? Over and over you’ve seen proposals that can do both a golf course and nature park, it seems like that would solve this for all.

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