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Property values rise on zebra-mussel infested lakes

Nobody wants to see lakes infested with zebra mussels. The little clamlike creatures have a reputation for prolific growth and upending the waters they invade.

But from a strictly economic perspective, could their presence and their ability to improve water clarity actually boost the value of shoreline property?

A University of Wisconsin-Oshkosh economics student spent two years researching the relationship between zebra mussels and property values and came to a counterintuitive conclusion: The value of lakefront properties in central and northern Wisconsin with the invasive mollusks actually increased, compared to properties where mussels are not found.

Martin Meder, 27, is a senior who will graduate this spring. His analysis of real estate on lakes in 17 counties showed that prices rose 10 percent on lakes that have zebra mussels. By contrast, sale prices fell by 4.5 percent where another invasive species, Eurasian water-milfoil, was present.

Meder, who plans to study economics in graduate school, was in Madison, Wis., this month where 150 undergraduate students in the UW System shared findings of their individual research projects.

“Zebra mussels are bad,” Meder said in a phone interview after returning to Oshkosh. “It’s just that in some cases they do things that people like and people are willing to pay more money for it.”

Zebra mussels, native to the Black and Caspian seas, first turned up in the Great Lakes in the ballast of ocean ships in 1988. A single mussel, the size of thumbnail, can filter a liter of water in a day. The ability to siphon and strip water of phytoplankton and other suspended material can rob a lake, river or stream of critical nutrients.

Zebra mussels have greatly clarified the water in Lake Erie and the Niagara River, increasing underwater visibility and leading to a boom in the bass population.

Zebra mussel populations can multiply quickly and blanket areas they invade. The annual cost of keeping water intake systems free of the mussels is about $250 million in the Great Lakes region, according to the University of Wisconsin Sea Grant Institute.

Zebra mussels also have been tied to outbreaks of toxin-producing blue-green algae. Swimmers are known to cut their feet on the shells. And along Lake Michigan, zebra mussels play a role in making many beaches smelly and unwelcoming because they spur the growth of a type of algae known as Cladophora, which washes ashore with the mussels and other organic material and rots.

But zebra mussels’ filtering ability also produces an undeniable result: It improves water clarity. Also, some fish species, such as smallmouth bass, have benefited when the mussel is present, since clearer water spurs the growth of weedy plants favored by some fish.

It’s these attributes – clearer water and bass-friendly – that Meder believes has had a positive effect on some lakeside properties.

By contrast, Eurasian water-milfoil doesn’t have such qualities. The plant can grow 30 feet and forms dense mats on the surface of the water.

“We know if we look at milfoil, everyone knows it ugly and a problem,” said Marianne Johnson, an economist and business professor at UW-Oshkosh who oversaw Meder’s project.

When it comes to zebra mussels, “the really bad things you can’t see,” Meder said.

He began the project after reading about concerns that zebra mussels harmed property values, but discovering there was little research on the topic. He did find, however, that previous studies showed property values were negatively affected by Eurasian water-milfoil.

To measure the value of lakefront properties, Meder used a statistical tool known as regression analysis that breaks down sundry factors including price, location, lot size, the presence of zebra mussels and other variables. Each factor can then be calculated separately.

For his research, he examined state records of 1,072 property transactions on 413 lakes between July 2009 and December 2011. Starting July 1, 2009, all real estate transactions were filed electronically with the state Department of Revenue through its Integrated Property Assessment System.

When he discussed his research at the Capitol last week, Meder said some people were confused by the outcome; others thought Meder was hawking a pro-zebra mussel agenda.

“It was rough,” he said.

Michael Engleson, interim executive director of the Wisconsin Lakes, a state lake association, said he was not surprised by such a reaction, because the DNR and local lake chapters have waged a public education campaign for years to stop the spread of invasive species.

“In some respects, it seems counterintuitive, but I’m not terribly surprised by the study,” he said.

“Zebra mussels really do clear out the water,” said Engleson, though he wondered about the longer-term effects on property values.

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