Economic study finds Eagle Lake lagging behind other are lakes
Released: July 3, 2008
After the recent Lake Delton tragedy in Wisconsin Dells, in which massive flooding caused great physical and economic damage to the area, lakes in Wisconsin have been under the microscope and their economic impact has been brought to the forefront.
One such lake is Eagle Lake in the Town of Dover in Racine County. Associate Professor of Economics Russ Kashian at the Univeristy of Wisconsin-Whitewater recently conducted a report on the economic impact of Eagle Lake on the surrounding Dover community.
"Specifically we’re looking at the economic impact of a lake and the difference between there being a lake or not having a lake there at all," Kashian said. "This is important now with the Lake Delton incident."
The study found that having a lake in a community is an economic boon, but that Eagle Lake is lagging behind other lakes in the area such as Paddock and Hooker lakes. Having a lake in the community helps bring in revenue from out-of-state visitors and part-time residents; it also helps heighten property value for the residents on the lake and in turn increases the value of property off of the lake as well.
Perceived and actual lake degradation have had a significant financial impact on the Eagle Lake community. Increased algae, reduced water clarity and reduced depth signal a decline in overall water quality and this has had an impact on demand for Eagle Lake real estate relative to competing lakes.
While Eagle Lake property owners have witnessed an inflation adjusted return (the amount of profit they’ve made on their investment including inflation), of more than 380 percent on their lakefront property investment, that amount is significantly lower than estimates on the return for residents of the two other area lakes. Paddock Lake property owners saw an increase of 550 percent and Hooker Lake property owners saw an increase of more than 1,000 percent.
"This discrepancy translates into higher taxes and/or lower levels of community service," Kashian said. "In addition, the diminished water quality on Eagle Lake fails to exploit the regions environmental asset as a draw for economic development and tourism suffers as families fail to utilize the lake to its full effect."
The failure to keep up with the other lakes translates into an aggregate loss in potential valuation of more than $15 million. The continued degradation and perceived lack of lake quality would cost the owner of a $200,000 house $24 a year in potential property value. However, even with the lake in its degraded state, it displaces 10 percent of the taxes from the off-lake homeowner to the lake homeowner.
"An Eagle Lake restoration project can generate substantial increases in lakefront property value," Kashian said. "This increase would not only help lakefront property owners, but the non-lakefront residents as well with a reduced tax burden."
For the complete 16-page report, contact Russ Kashian at 414-588-1260 or kashianr@uww.edu.
- Tom Applegarth,applegartg17@uww.edu
