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Funeral home plan raises a grave concern

Mary Ellen Podmolik | Chicago Homes: Local Scene

March 6, 2009

The subject line of an e-mail from a reader didn't have me at 'hello.' It had me at "can funeral home affect property value?"

That was the question posed by Arlington Heights resident Jim Grossman who, with his family, moved into a four-bedroom, 21/2 bath home in a residential neighborhood that happened to be across the street from a cemetery.

The cemetery didn't bother Grossman at all. A fence and a heavy stand of more than 200 trees that obscured the grave markers stood between his house and the 78-acre cemetery. The family put an $80,000 kitchen and other improvements into the 20-year-old home. At one time, before the housing market's tailspin, the house was valued at more than $600,000.

But then three weeks ago, a flyer landed on his doorstep that showed a schematic drawing and a proposal from the cemetery to seek a variance and build a 10,000-square-foot funeral home on part of the residentially zoned corner near his home.

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At one time, there was a proposal to sell the land to a housing developer. Grossman was OK with that. He wouldn't have minded if the parcel turned into room for more graves either.

"We were OK with the idea of a cemetery," Grossman said. "It's a nice, rolling, green park-like setting. It's the [funeral home] traffic. There will be parking lot lights, there will be comings and goings."

Grossman and neighbors have asked a lot of questions about the proposal and gotten some answers but they haven't been able to surmise how big a hit the development might be to their home values.

Questions about new land uses, variances and commercial development and their effects on home values take on newfound relevance in a down market, as homeowners fervently try to take control of what they can.

In Oak Park, some residents have long fought a request from Oak Park-River Forest High School to install lights at its football stadium so night games can be played. More recently, neighbors near a commercial street have complained that a new Dunkin' Donuts would hurt property values.

In Grundy County, Horizon Wind Energy is seeking to construct a wind farm and is anticipating questions about the effect of the turbines on neighboring property values.

There have been studies on the effects on property values of livestock operations, water quality, highways, affordable rental housing, rail transit, dam removal and yes, wind farms.

More recently, there's been research on the effect of foreclosures, including one study by Chicago-based Woodstock Institute, which found that each foreclosure within an eighth of a mile of a single-family home drops that home's value by at least 0.9 percent.

But there's no universal rate sheet for appraisers to go by to determine the effect of other changes on a neighborhood's property values, and that's because it's all very individualized.

"If it's the exact house, and one is next to something and one is not, you can figure out the difference," said Chicago appraiser Mike Jilek.

Otherwise, it boils down to location and both the characteristics of the house and the potential buyer for that home.

"You have to investigate the buyer behavioral characteristics of that neighborhood specifically," said Arlington Heights appraiser Gregory Schmitt. "If it's a first-time home buyer market, and they get a good price, they don't care if a funeral home is nearby."

A move-up buyer looking to upgrade his status may feel differently, though, he added.

Generally, appraisers say, commercial development has a negative effect on single-family homes, particularly if it leads to increased vehicular traffic and light pollution. But it can be minimal and all depends on how the development looks and whether it blends in with the neighborhood.

For instance, a condominium office development along Route 22 in Fox River Grove, across the street from a subdivision, was designed to look just like homes, right down to the roofs. As a result, Schmitt said, the offices had no impact on the area's value.

There's the upside of commercial development to consider as well, the creation of sales tax revenues and the nearby availability of goods and services in a community.

So it seems unlikely that Grossman or his neighbors are going to be able to quantify the effect of the proposed funeral home. Schmitt suggests they keep it in context of the bigger-picture issue today. "There's a big difference between a decrease in value and a decreasing market," Schmitt said.

mepodmolik@tribune.com