Noisy cars could be costing U.S. homeowners billions in lost home value, and electric vehicles (EVs) could address the gap, new research from the Rotman School of Management finds.

Though lowering your carbon footprint is a big part of the sales pitch for EVs, adoption has levelled off. Some policy makers have even shelved EV mandates and subsidy programs altogether.

“The biggest benefit of adopting EVs is that they reduce carbon dioxide emissions,” says Harrison Wheeler, an assistant professor of economic analysis and policy. “But it's hard for many people to get motivated about that because the benefits are kind of abstract. When we take steps to reduce our own emissions, it can sometimes feel like we are subsidizing bad actors elsewhere, who are not reducing their own emissions. And it could take years to see the benefits of reducing carbon emissions from cars.”

But EVs have another advantage that tends to fly under the radar: they are far quieter than gasoline-powered vehicles. And that could have a significant economic upside in America’s cities, according to Wheeler’s recent research.

Estimates from the engineering literature suggest that if all of the gasoline-powered vehicles currently on the road were replaced with EVs, traffic noise would be reduced by an average of about seven decibels, which is roughly equivalent to the noise reduction achieved by building a sound barrier next to a highway. Wheeler estimates that if EVs were universally adopted, the economic upside of eliminating traffic noise would run into the tens of billions of dollars in the United States alone.

In research co-authored with Enrico Moretti of the University of California Berkeley, Wheeler analyzed data from neighbourhoods in Florida, which maintains a detailed inventory of sound barriers in the state. And in the cookie-cutter suburbia of the subdivisions that the researchers looked at, all houses and streets are similar in size and in design, but some are nearer to the highway than others.

Wheeler compared the growth sale prices of properties within 100 metres of a sound barrier, with those 200 to 300 metres away, 300 to 400 metres away and more than 400 metres away. And when a sound barrier was built, the value of properties within 100 metres of the barrier increased by 6.8 per cent, and that increase was both immediate and mostly permanent. For each 100-metre interval beyond that, the increase in property values was smaller. (Beyond 400 metres, the construction of a new sound barrier had no effect on property values, with house values appreciating in line with the wider Florida housing market.)

“We already knew from engineering estimates how much noise is reduced by a sound wall, and once we had an estimate of how much housing prices appreciated when one was built, it told us how much people value being in a quieter neighbourhood on a per decibel level,” says Wheeler.

Wheeler extrapolated an estimate of the total cost of traffic noise by applying these findings to the United States Department of Transportation Noise Map, which estimates traffic noise for locations across the country.

“With a realistic estimate of how much people value being in a quieter neighbourhood, we were able to estimate the cost of traffic noise to every location in the United States that has some exposure to this type of noise,” says Wheeler.

Across the country, there are about 42 million people who live in areas with medium or high levels of traffic noise, and Wheeler estimates the total costs of this noise to be around US $110 billion. But he also estimates that the widespread adoption of EVs could eliminate the bulk of these costs. Lower noise levels could boost overall U.S. property values by a total of about US $77.3 billion.

Much of the economic benefit could flow to lower-income and minority households, which currently bear a disproportionate amount of the costs associated with traffic noise. Highways and major roads were not built in random locations in the United States. Often, they were built through neighbourhoods where poverty levels were high, and residents had fewer resources to resist major construction projects. Those neighbourhoods were usually poor, and disproportionately Black.
 
“In general, it has been difficult to get really good evidence on the effects of noise,” says Wheeler. “But noise is something that's tangible, and it has real local effects. Local and state policy makers should be interested in policies that encourage quieter cars. That could be by encouraging EV adoption. But it could also be through taxes on larger, noisier cars. On a local level, noise reduction could be the largest benefit of EV adoption. It's a much smaller benefit than reducing carbon dioxide emissions, which have huge social costs. But noise is just unpleasant to live around.”