Contributory Value

[Matt Parry]

I am a newbie (appraiser trainee) looking for opinions from experienced appraisers. Generally speaking, at what point can the construction of a new high school - that will not be fully operational for 3-4 years - be considered as a contributing factor in residential property values? All responses are appreciated.

 

[CGinMN]

The impact could start before it’s even approved and it could last decades into the future. It will impact land values for acquisition of the new school site, as well as complementary uses surrounding the new school and closed school. In my hometown (pop 5,000) they moved the school from in town, near the commercial downtown area, to the outskirts where there was abundant land. The downtown businesses lost out on people driving through town to pick up their kids, and running errands, and kids eating at the businesses for lunch. Single and multi-family development popped up near where the new school was built. It also resulted in property taxes going up significantly, which caused some people to leave the district. However, it also resulted in a lot of families moving into the district so their kids could learn at a new top notch facility. For a small town a new school might be the biggest development project they’ve ever had, and not infrequently the school is the largest employer. In a bigger city, maybe less of a factor, but still impactful.

 

[Joe Flacco]

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[Joe Flacco]

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[Dublin ohio]

MCPS has two new high schools opening in 2027 and it has been very controvertial due to redrawing of boundaries. School boundary changes brings out the unpleasant side of people.

We have a similar redistricting problem, but just due to population changes. They came out with an initial plan and the pitchforks came out. They are getting ready to released a revised plan. I doubt it will be much different. Just because of the obvious population problems.

 

[Carnivore]

In my county we have a unified school System. Every school 1 -12 is taught the exact same thing'. Does not matter what school you go to.
all school books are the same in every school.
Kind of lke USPAP and reainees

 

[Elliott]

A. I'd be of the opinion that the 'market' already knows about the new school and has reflected it when they and buy/sell properties. Hopefully the comps have the same influence.
B. Which line on page 2 were you thinking of making the adjustment?

 

[Surf Cat]

Agree with Elliot. One should be able to see the school benefit reflected in the market now with anticipation. It would be reflected in higher list prices then before the school project was approved. Shorter days on Market, closings above list.

Conversely, you may not see a move in the Market at all especially with the project 3 to 4 years out. The construction will cause noise, street closures, dust, etc. Which may cause an exodus from the neighborhood and be value diminishing.

You will doing the appraisal now, as of the effective date, not the future. Learn how to download market data from your MLS and read the trends. Call / email agents of closed sales, listings to get their take on what the market is doing in regards to the anticipation of the new school to be built.

One more item, you can't say desirable School District due to new High School development or even the word School in reports with some AMCs and lenders. You have to use objective, market focused language.

 

[sputnam]

I am a newbie (appraiser trainee) looking for opinions from experienced appraisers. Generally speaking, at what point can the construction of a new high school - that will not be fully operational for 3-4 years - be considered as a contributing factor in residential property values? All responses are appreciated.

It really can't be. If you've correctly chosen comparable sales, they are ideally in the same market as the subject property and are impacted in the same way as the subject.

 

[Matt Parry]

The impact could start before it’s even approved and it could last decades into the future. It will impact land values for acquisition of the new school site, as well as complementary uses surrounding the new school and closed school. In my hometown (pop 5,000) they moved the school from in town, near the commercial downtown area, to the outskirts where there was abundant land. The downtown businesses lost out on people driving through town to pick up their kids, and running errands, and kids eating at the businesses for lunch. Single and multi-family development popped up near where the new school was built. It also resulted in property taxes going up significantly, which caused some people to leave the district. However, it also resulted in a lot of families moving into the district so their kids could learn at a new top notch facility. For a small town a new school might be the biggest development project they’ve ever had, and not infrequently the school is the largest employer. In a bigger city, maybe less of a factor, but still impactful.

Thanks for this insight and real-life example.