Advanced Residential Applications and Case Studies - PowerPoint PPT Presentation

Loading...

PPT – Advanced Residential Applications and Case Studies PowerPoint presentation | free to view - id: cf32-ODMxO



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Advanced Residential Applications and Case Studies

Description:

( The Appraisal of Real Estate, 13th Edition - 2008) ... Government agencies buy real estate for parks, schools, and other uses ... – PowerPoint PPT presentation

Number of Views:167
Avg rating:3.0/5.0
Slides: 29
Provided by: Owne172
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Advanced Residential Applications and Case Studies


1
(No Transcript)
2
Public Interest Value
  • A general term covering a family of value
    concepts that relate the highest and best use of
    property to noneconomic uses. Public interest
    value is driven by social, political, and public
    policy goals. (The Appraisal of Real Estate,
    13th Edition - 2008)
  • A general term covering a family of value
    concepts that relate the highest and best use of
    property to noneconomic uses such as conservation
    and preservation . . . (The Dictionary of
    Real Estate Appraisal, Fourth Edition - 2002)

3
Public Interest Value
  • Government agencies buy real estate for parks,
    schools, and other uses
  • If a city buys a commercial parcel for a park, is
    that the value of park property?
  • Agencies and NGOs buy property for conservation
    and preservation
  • If TPL or TNC buys a potential development site
    to preserve it, is that the value of
    preservation property?
  • For example . . .

4
Public Interest Value
If the City buys this property . . .
5
Public Interest Value
. . . and turns it into this . . .
6
Public Interest Value
. . . does that indicate the value of THIS land
for park purposes?
7
Public Interest Value
If the Trust for Public Land buys this property
for preservation . . .
8
Public Interest Value
. . . does that indicate the value of THIS land
for preservation?
9
Public Interest Value
  • Congress . . . expressed support for the
    principle that wilderness has value to society
    that requires conservation and preservation.
  • (The Wilderness Society v. USFWS, 353 F.3d 1051,
    1055 9th Cir. 2003)

10
Public Interest Value
  • In addition to obvious governmental uses,
    federal, state, regional, and local governments
    purchase property for
  • conservation
  • preservation
  • mitigation
  • NGOs do the same using public funds, often for
    later resale to an agency
  • State and local bond measures have provided
    BILLIONS!

11
Public Interest Value
  • Highest and best use defined
  • The highest and most profitable use for which
    the property is adaptable and needed or likely to
    be needed in the reasonably near future.
    (UASFLA)
  • "The reasonably probable and legal use of vacant
    land or an improved property that is physically
    possible, appropriately supported, financially
    feasible, and that results in the highest value.
    (AI Dictionary)

12
Public Interest Value
  • In some markets, active competition has emerged
    for properties to be devoted to preservation,
    conservation, or mitigation
  • Buyers have different motivations, some purely
    economic, some not

13
Public Interest Value
  • Appraisers, government agencies, and NGOs often
    struggle with how to interpret the sales data
  • The expectations of landowners (sellers and
    donors) contribute to the confusion
  • There is controversy regarding the legitimacy of
    certain highest and best uses . . .

14
Public Interest Value
Mitigation
Open space
Intrinsic value
Natural lands
Aesthetic value
Park
Preservation
Recreation
Habitat
Scenic value
Resource
Conservation
15
Public Interest Value
  • Which of these are legitimate highest and best
    uses? Which are not?
  • Does a use have to be an economic use before it
    can be a legitimate highest and best use?
  • What exactly is an economic use?

Source Uniform Appraisal Standards for Federal
Land Acquisitions (UASFLA) - 2000
16
Public Interest Value
  • Lets look at two definitions of market value
    (BOTH are Federal)
  • The first is from Federal banking regs (12 CFR
    Part 323)
  • The second is from UASFLA . . .

17
Public Interest Value
  • Market value means the most probable price
    which a property should bring in a competitive
    and open market under all conditions requisite to
    a fair sale, the buyer and seller each acting
    prudently and knowledgeably, and assuming the
    price is not affected by undue stimulus. Implicit
    in this definition is the consummation of a sale
    as of a specified date and the passing of title
    from seller to buyer under conditions whereby
        (1) Buyer and seller are typically
    motivated     (2) Both parties are well
    informed or well advised, and acting in what they
    consider their own best interests     (3)  A
    reasonable time is allowed for exposure in the
    open market     (4)  Payment is made in terms
    of cash in U.S. dollars or in terms of financial
    arrangements comparable thereto and
        (5)  The price represents the normal
    consideration for the property sold unaffected by
    special or creative financing or sales
    concessions granted by anyone associated with the
    sale.

Wheres the word economic? Not here . . .
18
Public Interest Value
  • Market value is the amount in cash, or on terms
    reasonably equivalent to cash, for which in all
    probability the property would have sold on the
    effective date of the appraisal, after a
    reasonable exposure time on the open competitive
    market, from a willing and reasonably
    knowledgeable seller to a willing and reasonably
    knowledgeable buyer, with neither acting under
    any compulsion to buy or sell, giving due
    consideration to all available economic uses of
    the property at the time of the appraisal.

19
Public Interest Value
  • 1984 Dictionary of Real Estate Appraisal
    (AIREA) definition of Highest and Best Use
    included
  • . . . in certain situations the highest and
    best use of land may be for parks, greenbelts,
    preservation, conservation, wildlife habitats,
    and the like.
  • This language was later dropped from the
    dictionary - and it remains gone . . .

20
Public Interest Value
  • The Appraisal of Real Estate, Sixth and Seventh
    Editions (1973 and 1978)
  • The most profitable likely use cannot always be
    interpreted strictly in terms of money. Return
    sometimes takes the form of amenities.

21
Public Interest Value
  • The Appraisal of Real Estate, Eighth Edition
    (1983)
  • . . . highest and best use takes into account
    the contribution of a specific use to the
    community and community development goals, as
    well as the benefit of that use to individual
    property owners

22
Public Interest Value
  • The Appraisal of Real Estate, Ninth Edition
    (1987)
  • The benefit that an amenity may contribute to
    the development of a community is not considered
    in the appraisers analysis of highest and best
    use.

23
Public Interest Value
  • The Appraisal of Real Estate, Tenth Edition
    (1992)
  • The benefit a real estate development produces
    for a community or the amenity contribution
    provided by a planned project (i.e., the public
    space in a park-like area) are not considered in
    the appraisers analysis of highest and best use.

24
Public Interest Value
  • The Appraisal of Real Estate, Thirteenth Edition
    (2008)
  • . . . identify the most profitable, competitive
    use to which the subject property can be put.
    The highest and best use is shaped by the
    competitive forces within the market where the
    property is located . . .

25
Public Interest Value
  • After three years of study and discussion, AIs
    board adopted this motion in 1996
  • The Appraisal Institute has studied the issue
    of appraising unique or environmentally sensitive
    properties and has concluded that these
    properties can be appraised under the existing
    Standards of Professional Appraisal Practice of
    the Appraisal Institute, which includes USPAP,
    and within the provisions of its Code of Ethics,
    and that highest and best use must be an economic
    use if the purpose of the appraisal is to
    estimate market value.

This motion did not define economic . . .
26
Public Interest Value
  • WMATA v. United States (54 Fed.Cl. 20) 2002.
    In concluding that a trail was a legitimate
    highest and best use for valuation (using
    purchases of rail corridors for trails), the
    court said
  • In the courts view, . . . UASFLA is entitled
    to little more weight than a brief filed by
    defendant. (P. 15)
  • In many of these cited cases, defendant or one
    of its agencies was the one arguing in favor of a
    recreation or conservation use. (P. 16)
  • These cited cases focus on the reasonably
    probable use which results in the highest value,
    whether or not that use is directly
    income-producing. (P. 16)

27
Public Interest Value
  • Concluding questions
  • Does highest and best use have to be an economic
    use?
  • What constitutes an economic use?
  • Is there measurable incremental value to public
    parks, open space, and resource properties?
  • If so, should this value be recognized for public
    purchases, land exchanges, and tax matters
    (income, estate, ad valorem, etc.)?

28
(No Transcript)
About PowerShow.com