Residential property in some areas of California lost almost $2 billion in value over a six-year period because of groundwater depletion that is causing the land underneath homes to sink, according to a new study.
Researchers at the University of California, Riverside, calculated that housing value has been lost across eight counties in the San Joaquin Valley, the southern part of the Central Valley, from Stockton in the north to Bakersfield in the south. Homes in affected areas have lost between 2% and 6% of their value, or $6,689 to $16,165 per residence. The authors said farms in the region that suck up groundwater to grow crops are causing the long-term problem.
"Basically, the land is sinking and so are the property values," Mehdi Nemati, an assistant professor of environmental economics and policy who led the study, said in a report on the university’s website Thursday. "This is the first time anyone has quantified how much land subsidence costs homeowners in this region."
The study looked at home values from 2015 to 2021 in San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare and Kern counties. There are more than 200,000 homes in the areas subject to land subsidence.
According to the study, farmers are pumping out groundwater faster than it can be replenished, causing underground layers of clay and silt to become compacted. This leads to the land gradually sinking, a process that can’t necessarily be reversed.
The problem can affect homes directly through structural damage, such as cracking foundations, walls and floors. This can decrease values and lead to higher homeowner insurance costs, the authors said. There’s also an indirect impact on values, as potential buyers shy away from properties in areas known to have this issue.
To address the problem, the researchers suggested reducing groundwater use and possibly farming activities in the affected areas. Alternatively, local governments could try mitigation measures such as recycling urban wastewater into the ground to replenish the groundwater supply.
The report notes that a 2014 state law requires local agencies to balance the amount of water they’re taking out of the ground through replenishment by the 2040s, but progress has been slow.
"If you can attach a dollar amount to the damage, it becomes easier to justify investment in mitigation and regulation," Nemati said in the report.
