Lake's effect on housing prices?

Researchers Mark Partridge, Elena Irwin, and Heather Stephens, all of the Department of Agricultural, Environmental, and Development Economics, have found that Lake Erie attracts highly educated people to its communities and that homeowners are willing to pay substantially more for a house right by the lake.

The team, with funding from Ohio Sea Grant, studied two decades of data on population and employment changes across the Great Lakes region and related those factors to waterfront proximity, then narrowed the focus to more detailed northeastern Ohio data and examined how the lake and other attributes influence housing values.

In the Ohio-specific study, the researchers found that residents between Ashtabula and Lorain are willing to pay an average $40,000 more for a home on the lakeshore. However, the effect doesn't extend very far.

"Yes, people want to live along the lake, but only within an eighth of a mile, which was surprising to us," Partridge said. "We had figured the lake would have an effect, but we thought that effect would go a lot farther inland."

Limited public access a factor

Ohio Sea Grant Director Jeff Reutter suggests that's not the case because, compared with other bodies of water, only a small percentage of Lake Erie shoreline is publicly owned.

"If you go to Florida or South Carolina, the beach is more in public ownership, so as long as you can walk or ride your bike to the coast, you can enjoy it yourself," he says. "Along Lake Erie, if you're not in that first tier of ownership, you don't have access to the lake."

Data from the 1990s also show the lake had high appeal then, but after 2000, only highly skilled college graduates were moving close to the shore.

"That could be because people who don't make as much money just aren't able to afford these homes that cost more," Stephens says. The researchers found similar results in the regional study, where lake proximity didn't have much effect on overall population movement or employment.

Growth on old industrial sites?

"The overall story that the population is basically stagnant isn't surprising, but the fact that we're still seeing attraction to the lake with the higher-income, higher-educated people makes us optimistic," Stephens said.

The researchers also found that removing old factories and other industrial sites would facilitate growth and development. "We found a similar relationship in the local study, that these buildings have a negative effect on housing prices," Partridge said.

One of the project's end goals is to estimate the demand for specific amenities or the cost of negative industrial legacy. "We will be able to look at investment in a marina or investment in reduction of number of smokestacks and can make predictions about how that would shift demand for housing," Irwin said. "That's the final step for these findings."

-- Matthew Forte and Christina Dierkes, Ohio Sea Grant Communications