Q: The city where we live is building a well next to our home, which is also adjacent to a major freeway and interchange. Our home is above the freeway, with a sound wall and retaining wall. We knew when we purchased it that the potential was there as we bought our home from California's highway department.

We've lived here for 14 years and have found out that some of the homeowners were not told of the well by their agents. We have gone to all the planning meetings with the city. We tried to get them to move the well into a commercial area, but no go. We're in a historic area.

We made arguments about property values, quality of life issues, and more, but we lost our fight. I guess they'd rather place bets on new homes that aren't selling and businesses that no longer exist. In talking with an attorney here, it would have cost tens of thousands to fight city hall. And, most of the homeowners do not have that kind of money.

We also found out that one of the other well sites had drainage problems that affected the adjoining properties. This well will be pumping around 2,000 gallons a minute. The drain is about 20 feet from our house and the main pump will be about 30 feet away. And we're downhill from the well. If there's a leak, it's headed straight for us and the freeway, about 15 feet behind the well.

We also found out that a freeway retaining wall was damaged in another city from a water line that was leaking. The wall collapsed onto the freeway, shutting it down until the wall and slope could be repaired. And, to top it all off, our property values have plunged! I have a couple of questions:

1.) How do we go about finding out the impact of the well on our property values? The local agents can't seem to come up with an answer or ballpark figure. I tried contacting several experts in our area but they haven't gotten back to us.

2.) In the event of leakage, what steps should be taken?

A: Your situation reflects the importance of home buyers recognizing the potential for what an economist would call a future negative externality hurting the use, enjoyment and value of a property. Clearly, you were aware of the existing easement for freeway expansion. I hope you also made inquiries regarding the city-owned property next door to you and its potential future uses when you purchased your home. If you sold your home today, you would be required to disclose the plans for the city well and any information about the freeway expansion. If you sell the home after these projects are completed, it is likely that several nearby homes will also be for sale, meaning your marketing time will be longer and buyers will seek a deep discount in the price.

The market determines value and it is unlikely that anyone can predict a sales price until marketing of the property begins. With regard to the potential for well leakage, you should raise this question with the well site engineers and see what steps are taken in the design to protect you against such events.