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  #1  
Old 10-16-2007, 11:39 AM
A. P. Grice A. P. Grice is offline
 
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Default Partial takings and easement valuations

I brought this up two years ago and got one response, so I'm going to try again....

I've been doing appraisals for well over three decades, and eminent domain or litigation valuations have accounted for a third to a half of all work over the years. But I'd like to hear from other folks WRT valuation of easements, such as the utility (both overhead and undergound) and drainage easements that often accompany road widenings - typically a 5 or 10' wide strip adjoining the existing right-of-way or the new acquisition line. Now in almost every instance, these easements fall within a specified setback area as required by zoning, meaning that this area cannot be built upon - only improved with signs, landscaping, parking, driveways and the like - improvements relatively unaffected by what's overhead or underground.

I'm a firm believer in the old axiom "value is use and use is value." Whenever the utility of a property is limited or reduced, then so is its market value. But I'd like to hear from others about valuing easements within areas where zoning setbacks already limit the land's use somewhat.

Cheers
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Old 10-16-2007, 12:22 PM
PropertyEconomics's Avatar
PropertyEconomics PropertyEconomics is offline
 
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Quote:
Originally Posted by A. P. Grice View Post
I brought this up two years ago and got one response, so I'm going to try again....

I've been doing appraisals for well over three decades, and eminent domain or litigation valuations have accounted for a third to a half of all work over the years. But I'd like to hear from other folks WRT valuation of easements, such as the utility (both overhead and undergound) and drainage easements that often accompany road widenings - typically a 5 or 10' wide strip adjoining the existing right-of-way or the new acquisition line. Now in almost every instance, these easements fall within a specified setback area as required by zoning, meaning that this area cannot be built upon - only improved with signs, landscaping, parking, driveways and the like - improvements relatively unaffected by what's overhead or underground.

I'm a firm believer in the old axiom "value is use and use is value." Whenever the utility of a property is limited or reduced, then so is its market value. But I'd like to hear from others about valuing easements within areas where zoning setbacks already limit the land's use somewhat.

Cheers
Mr. Grice .. I believe a taking is a taking and that even the periphery within the set back has the same value as that of the remainder of the land because it allows for specific uses ... ie setback as required by zoning.
I believe this from two standpoints ... first the market doesnt make note of one value for the perimeter lands and one for the interior lands .. purchase prices are for the site in TOTAL. Secondly ... use of these areas for playing, landscaping, non permanent storage sheds, etc is allowable in most jurisdictions and from this stand point it frees up other portions of the site for higher and better site uses.

I think set back lands are worth as much as that of the total site on a per unit basis whether its per acre, per square foot, or other.

This is not to note that easements do not require surrender of the entire bundle of rights and that which is taken may be less than the full fee value. I have seen and measured easements as being the total fee or only a portion there of from a damage perspective ... that is largely dependant upon your assignment.
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  #3  
Old 10-16-2007, 07:27 PM
CCAAMO CCAAMO is offline
 
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Mr. Grice, I tend to agree with you. The impact of the taking on the utility and value of the remaiing parcel is the question. A square foot is not a square foot. If I take a 2 foot wide portion of the lot which makes the lot unbuildable its worth a lot more than two feet which does not impact the use or value of the lot.

If that two feet wide strip of land is to widen a major traffic street or a freeway which will now be right on top of your home, it will impact the value much more than the price per square foot for the parcel prior to the taking.

I've delt with this a lot with all the public takings for freeways and highways in the area over the years. The argument that a square foot is a square foot is a CALTRANS argument. Most people so along with the offer. Those that get a qualified appraiser get a whole lot more.

Last edited by CCAAMO : 10-16-2007 at 07:29 PM.
  #4  
Old 10-16-2007, 07:52 PM
PropertyEconomics's Avatar
PropertyEconomics PropertyEconomics is offline
 
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Originally Posted by CCAAMO View Post
Mr. Grice, I tend to agree with you. The impact of the taking on the utility and value of the remaiing parcel is the question. A square foot is not a square foot. If I take a 2 foot wide portion of the lot which makes the lot unbuildable its worth a lot more than two feet which does not impact the use or value of the lot.

If that two feet wide strip of land is to widen a major traffic street or a freeway which will now be right on top of your home, it will impact the value much more than the price per square foot for the parcel prior to the taking.

I've delt with this a lot with all the public takings for freeways and highways in the area over the years. The argument that a square foot is a square foot is a CALTRANS argument. Most people so along with the offer. Those that get a qualified appraiser get a whole lot more.
The issues you present here are far different than those Mr Grice presented. Taking and severance damages to the remainder in the after condition are real and can be quantified and assessed. I think Mr Grice was asking of a taking within a set back area had as much value as the rest of the parcel.
Reading no more into that .. I posted my answer.
Your answer takes a few leaps of faith and speculation of facts not presented in the question I think.
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  #5  
Old 10-16-2007, 10:43 PM
ZZGAMAZZ ZZGAMAZZ is offline
 
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I'm serious about this question: If a portion of the front of each of 3 contiguous parcels is being taken to widen a street, how does one measure the value of the portion of one of the parcels that has huge, mature trees?
  #6  
Old 10-16-2007, 11:36 PM
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David Wimpelberg David Wimpelberg is offline
 
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Related to this, I had heard through (don't know if it is true or not) that the IRS was cracking down on donations of conservation easements on properties for just this reason. People were granting easements on their property for a tax writeoff. Problem was, the easement was located in a setback area which couldn't be improved anyway. Apparently the IRS doesn't think too highly of that.

I had done some work for a title company regarding shared accesses. Common sense would dictate that there should be a difference between a shared access and one that is not, since it involves someone giving up property rights. My data showed otherwise, provided that the shared access was located outside of the building envelope of the property.
  #7  
Old 10-16-2007, 11:59 PM
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Amy Perkins Amy Perkins is offline
 
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In my experience, appraisals were typically done on a per square foot basis, according to the highest and best use of the land. If the highest and best use of the land required development, that development would normally require dedication of the easement. Therefore, the highest and best use would revert back to the current use per square foot. As far as easements go, most would be calculated as a percentage of fee, unless it was completely encumbering the land 100%, for example an anchor easement. If however, by placing an easement on such as property makes it worth less than before the easement, you are talking severance damages. In order to prove this you must appraise the property before and then after the take. Trees that are removed are usually valued and paid for if removed an arborist can be used for an opinion as to the value if very large or cost manual to replace. I would read up on the new law regarding eminent domain, my sources tell me they are still consulting counsel due to complexity
  #8  
Old 10-17-2007, 08:00 AM
Fred Fred is offline
 
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Quote:
Originally Posted by A. P. Grice View Post
I'm a firm believer in the old axiom "value is use and use is value." Whenever the utility of a property is limited or reduced, then so is its market value.
Just don't equate use with utility. They mean different things.

The real problem here is that having the market data to make such extractions is unlikely, so we are left with theory. I agree that type of easement tends to have little effect.

Ownership doesn't mean much. Control (of rights) does. Suppose the roles are reversed. Instead of taking an easement, the taker gets fee title to the strip and grants a permanent easement (for ingress, egress, etc) back to original owner. Would the change in ownership change what the condemnee controls in the strip area or cause a loss in productivity in the remainder? If you can't make a case for loss in this more extreme variation, then you probaby have zero basis to make a case for the easement take.

Last edited by Fred : 10-17-2007 at 08:02 AM.
  #9  
Old 10-17-2007, 08:01 AM
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PropertyEconomics PropertyEconomics is offline
 
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Quote:
Originally Posted by ZZGAMAZZ View Post
I'm serious about this question: If a portion of the front of each of 3 contiguous parcels is being taken to widen a street, how does one measure the value of the portion of one of the parcels that has huge, mature trees?

Gama .. you shouldnt be asking that question. And you know why. Please do not get others here to help you do something that you shouldnt be doing. We have had this conversation before.
Get with a general certified appraiser and handle this problem the correct way. Barring that it is my opinion the assignment you are working on is a complex assignment. You asked me not to lecture you but getting others to help you in an error of commission is not a good thing.
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  #10  
Old 10-17-2007, 08:04 AM
Fred Fred is offline
 
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Quote:
Originally Posted by David Wimpelberg View Post
Related to this, I had heard through (don't know if it is true or not) that the IRS was cracking down on donations of conservation easements on properties for just this reason. People were granting easements on their property for a tax writeoff. Problem was, the easement was located in a setback area which couldn't be improved anyway. Apparently the IRS doesn't think too highly of that.
I haven't heard of the crack down, but you can hardly blame them.
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