Electric Power Reliability and Local Housing Prices in the United States

Given the critical role of electric power in local communities, this study investigates whether power interruptions are capitalized into housing prices at the US county level. Using county‐level panel data and controlling for key local supply and demand fundamentals, we find that power interruptions stemming from normal operational conditions significantly reduce housing prices, particularly in counties with high exposure to natural hazards. In contrast, we find no consistent evidence that outages limited to major event days (e.g., extreme weather events) influence housing values. Additionally, neither the frequency nor the average duration of outages alone appears to drive housing price changes. Our estimates imply a $113.25 billion loss in home values and a $1.22 billion annual loss in property taxes due to a one‐standard‐deviation increase in power interruptions associated with normal operational conditions. These findings lend support to policy efforts aimed at improving power grid reliability, as such investments may be partially offset by gains in housing market valuations.