Excessive groundwater pumping in California’s Central Valley is causing homes in the area to massively devalue, according to a new study, as the land over which they are built sinks at an alarming speed.
An analysis by the University of California, Riverside, found that homes in areas where the ground is gradually giving in lost between 2.4 percent and 5.8 percent of their sale value, between $6,689 and $16,165 per home. Overall, California’s Central Valley has lost a total of $1.87 billion in aggregate housing value due to land sinking caused by groundwater pumping, researchers concluded.
“Basically, the land is sinking and so are the property values,” said Mehdi Nemati, a UC Riverside assistant professor of environmental economics and policy who led the study, in a press release. “This is the first time anyone has quantified how much land subsidence costs homeowners in this region.”
Why Is the Ground Sinking in California’s Central Valley?
Groundwater pumping—the process of extracting water from underground sources—is a very important buffer against California’s frequent droughts, especially in areas like the Central Valley, one of the world’s most agriculturally productive regions. But overpumping in recent decades has left those water sources depleted and caused the land to sink.
“Think of a sponge,” said Nemati. “If you squeeze water out and never let it soak again, it flattens and hardens. That’s what’s happening underground.”
A 2024 study by Stanford researchers found that the San Joaquin Valley, the southern portion of the California Central Valley, has sunk at a record rate over the past 20 years, plunging by nearly an inch per year between 2006 and 2022.
This rapid sinking has caused multimillion-dollar infrastructure repairs and added pressure on the state to guarantee farmers enough water while making sure groundwater sources have time to naturally recharge. It is also bringing down the value of homes in the area.
What Is This Doing to Home Values?
UC Riverside researchers used satellite-based radar images to precisely measure ground-level changes and then matched data on the sinking of the affected land with nearly 200,000 home sale transactions across eight counties in California’s Central Valley.
What they found is that land sinking is “a serious economic issue that affects families and communities,” Ariel Dinar, a UC Riverside distinguished professor emeritus of environmental economics, said in a press release.
Properties on land that have experienced the most dramatic sinking suffered bigger home value losses, researchers found. But even homes standing on safer grounds are seen as a dangerous investment by potential buyers, who are also put off by the prospect of higher maintenance costs and insurance limitations.
What Should Be Done?
California’s Central Valley groundwater aquifers must be allowed to replenish themselves, even if it comes at a cost for the state’s agricultural sector.
“If you can attach a dollar amount to the damage, it becomes easier to justify investment in mitigation and regulation,” Nemati said.
The problem is being made more urgent by climate change, which is causing more severe and more frequent droughts, according to researchers.
“There are families trying to build equity through homeownership,” Dinar said. “When their property values decline because of something beyond their control, like land subsidence, it becomes a matter of social equity.”
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