Gross tons per mile. It is a term you should become intimately familiar with, particularly, if you live within a half mile or so of the railroad tracks here in Grays Harbor. For residents of Elma, Montesano, and half the residents and businesses in Aberdeen — that is pretty much everybody.
Gross ton per mile is a term used to measure the rail density of freight on the tracks themselves. It is a measurement tool by which, economists and study groups, such as the recent work done at the University of California at San Diego, to analyze the effect of the increase in traffic as it relates to your property value.
In one recent study, it was concluded that for every 10 million gross tons per mile, you can expect a 1 percent drop in your property value. Using this standard formula and applying to Grays Harbor and the three oil train companies and their expected traffic, can we assume up to a 20 to 30 percent drop in value? Provided all three companies interested ramp up production, and at this point that seems to be the direction, it may turn out to be much worse for homes or businesses very close to the tracks.
For those over a half- ile away, the property value de-valuation will diminish as the distance increases, but your values will go down as a result also. In a study done in 2011 by Michael Futch — “Examining the Spatial Distribution of Externalities: Freight Rail Traffic and Home Values in Los Angeles” — the direct result of increased traffic and lowering of property values is extensively studied.
The conclusion: We have a major problem on our hands here in Grays Harbor and very much in particular in Elma and Montesano.
Our county government finances are tied to direct value of taxation of our homes and business property to operate. Expecting even a modest 10 to 20 percent drop of affected highly developed areas assessed property values will have a devastating effect.
The current thoughts expressed by our elected leaders and those connected with the Port is that the economic benefit of the approximately 50 new full-time jobs will outweigh any inconvenience to the population of Grays Harbor.
Now, I am not sure what the port will be paying these 50 people, but I don’t feel wrong in assuming it will not make up for a countywide real estate depression — one we have made ourselves.
There are more studies. In 2012, the Eastman Company, Real Estate Appraisers/Analysts/Consultants, of Seattle, did a similar study of increased traffic and real estate values.
This in anticipation of increased traffic at the Cherry Point Terminal here in Washington. Its conclusion — expect anywhere from a 5 to 20 percent drop in property value, depending on how close you are to the tracks. This study was for even lower expected increases in traffic of a paltry 54 million metric tons per year. We are facing more (very much more) here in Grays Harbor.
I spoke with several real estate offices from Aberdeen to Elma in preparation of this column. None were willing to go on the record. All related, in one form or another, that we can expect a drastic drop in property values and they are privately worried — “across the board devaluation” — as one broker related. Another told me,”It is going to be a hammer that the county may never recover from.”
When I asked if the coming oil trains and increase in traffic were being “disclosed” to relevant potential buyers of currently listed property, I received one “no comment” and phone hangups.
I want to stress that this potential drop in values has nothing to do with what is actually in the rail cars, only the “gross tons per mile” increase in traffic.
Add to the mix the fact that the oil trains do indeed seem to explode on derailment, see Daily World and Vidette reporting of the disaster in Quebec, and we have an additional factor to take into the equation.
Of our elected officials, only Grays Harbor County Commissioner Frank Gordon has expressed concern over the effect this increase in traffic and the oil cargo may have on the Harbor. Commissioner Wes Cormier is staying “neutral.” Commissioner Welch has yet to go public with his point of view. The current Port Commissioners, well, they think it’s the greatest thing since sliced bread.
Make no mistake about it, there is big money involved in the coming oil trains. Unfortunately, it possibly will be made on the backs of the typical homeowner and business property investor and at the expense of the residents of Grays Harbor.
Tom Frederiksen grew up in Montesano and lives here today with an active blog at montesanotoday.com. Contact him at firstname.lastname@example.org.