Call it HBU as is or interim use?

[CANative]

I have two almost identical assignments. Both properties (about 70 miles from each other) are 160 acre (+-) with one on the coast and one inland. Both have almost finished new residences. Both are about 1,000 square feet.

The game plan in these areas (and it happens pretty often) is for a property owner to build a very small house on these large lots to live in or use on weekends while planning and building the eventual "main house" which will be substantially larger. The highest and best use on these types of lots is residential with large, custom, high quality homes. The original small house then becomes the accessory unit or guest house. On the coastal property the kitchen will have to be removed (but this never happens or they just put the kitchen back in while the inspector is driving away from the property).

What is the answer to the FannieForm question: "Is the highest and best use of the subjet property as improved (or proposed) the present use" Yes or No (explain).

 

[John Hassler]

I believe you are confusing two issues, one being H&BU of the land and the other being is the home the H&B improvement for the site.

Under the Fannie Mae definition of H&BU - which would be appropriate for a FM form report - you an check off "Yes" if the improvements are not an illegal use and add value over and above the value of the site alone. In your case, if single family residential is an allowed use AND if it adds value you could answer YES on the form. As to whether the existing "small home" is an under improvement, well, that's for you to determine.

 

[Lee Lansford]

What is the answer to the FannieForm question: "Is the highest and best use of the subjet property as improved (or proposed) the present use" Yes or No (explain).

Do the improvements contribute to the market value of each property?

Answer that question and you have your answer.

 

[Fred]

What is the answer to the FannieForm question: "Is the highest and best use of the subjet property as improved (or proposed) the present use" Yes or No (explain).

Obviously, the answer is "maybe" until you post more about cost and value.

Just wondering - What usually happens to these interim improvements? Do they become in-law units?

I believe Fanniie's question is HBU as improved, not HBU of the land, right? So wouldn't the answer to your question depend on whether a fuller development adds more to cost than value?

Do the improvements contribute to the market value of each property?Answer that question and you have your answer.

That might work if the question is about the HBU of the land as if vacant. On an as improved basis, the fact that the current imps add value doesn't preclude the possibility that further development wouldn't be more profitable than doing nothing.

 

[CANative]

On an as improved basis, the fact that the current imps add value doesn't preclude the possibility that further development wouldn't be more profitable than doing nothing.

Yes. The HBU of this site is for further development of a larger, higher quality residence and perhaps 10 or 15 acres of vineyard, Pinot or Chardonnay.

Building the eventual guest house first is common enough to be specifically described and permitted in the published planning and building codes.

Here's what they're building (Yuchh). They used the brown color of metal. When you drive up it looks like a container car house (my trainees description) or a singlewide attached to an old gas station (my description). The interior is very space-age modern and we finally decided to agree that it looks like a shuttle-craft from a starship.

http://www.rocioromero.com/LVSeries/LV.htm

 

[PropertyEconomics]

Obviously, the answer is "maybe" until you post more about cost and value.

Just wondering - What usually happens to these interim improvements? Do they become in-law units?

I believe Fanniie's question is HBU as improved, not HBU of the land, right? So wouldn't the answer to your question depend on whether a fuller development adds more to cost than value?

That might work if the question is about the HBU of the land as if vacant. On an as improved basis, the fact that the current imps add value doesn't preclude the possibility that further development wouldn't be more profitable than doing nothing.

Steven .. I believe it is Fannies position if the improvements add any contributory value to the site as vacant, the property is developed to its highest and best use, again assuming the improvements are legally permissible.
There would definately be a difference of opinion if measured agasint the definition of H & BU which also includes financially feasible and maximally productive. Given the scope of the assignment and fannies supplemental guildelines I think the analysis is simple as concluding if the existing improvements have contributory value.

 

[Fred]

Steven .. I believe it is Fannies position if the improvements add any contributory value to the site as vacant, the property is developed to its highest and best use, again assuming the improvements are legally permissible.

Fannie can have whatever position they like. I suggest downward facing dog. If the forum didn't have rules I might suggest something else. If alteration or expansion adds more to value than cost, the current use ain't HB.

You are right about one thing, Greg. Where are the fuel pumps and slusheee machine?

 

[Jim Onderisin]

Greg: The highest and best use as improved would be construction of an additional new single-family house on the site, the size and style of which meet market demand, and conversion of the existing house to an auxiliary unit. Given that highest and best use, the current use would be an interim use.

 

[Carnivore]

Fannie can have whatever position they like. I suggest downward facing dog. If the forum didn't have rules I might suggest something else. If alteration or expansion adds more to value than cost, the current use ain't HB.

You are right about one thing, Greg. Where are the fuel pumps and slusheee machine?

Thinking about Stevens comment above raised a question in my mind. What is legally pemissable on the 160 acre site? If this is not a valid question, then can someone explain to me why its not?

ftr, this is a very good thread. I hope that a lot of the residential members of the forum pay attention to this one.

 

[CANative]

What is legally pemissable on the 160 acre site?

Rangeland District (RL160)

Sec. 20.060.005 Intent.

This district is intended to create and preserve areas for, (A) the grazing of livestock, (B) the production and harvest of natural resources, and (C) the protection of such natural resources as watershed lands from fire, pollution, erosion, and other detrimental effects. Processing of products produced on the premises would be permitted as would certain commercial activities associated with crop and animal raising. Typically the R-L District would be applied to lands for incorporation into Type II Agricultural Preserves, other lands generally in range use, and intermixed smaller parcels and other contiguous lands, the inclusion of which is necessary for the protection and efficient management of rangelands. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.010 Permitted Uses.

The following use types are permitted in the R-L District:

(A) Residential Use Types (See Chapter 20.016).

Family residential – single family.

(B) Civic Use Types (See Chapter 20.020).

Cemetery;
Community recreation;
Essential services;
Fire and police protection services;
Minor impact utilities.

(C) Commercial Use Types (See Chapter 20.024).

Animal sales and services – horse stables;
Animal sales and services – kennels;
Animal sales and services – stockyards.

(D) Agricultural Use Types (See Chapter 20.032).

Animal raising – general agriculture;
Animal waste processing;
Forest production and processing – limited;
Forest production and processing – portable sawmills;
Horticulture;
Packing and processing – limited;
Packing and processing – winery;
Row and field crops;
Tree crops.

(E) Accessory uses as provided in Chapter 20.164. (Ord. No. 3639 (part), adopted 1987; Ord. No. 4038 (part), adopted 1999))

Sec. 20.060.015 Uses Subject to an Administrative Permit.

The following use types are permitted in the R-L District upon issuance of an Administrative Permit:

(A) Residential Use Type (See Chapter 20.016).

Farm employee housing. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.020 Uses Subject to a Minor Use Permit.

The following use types are permitted in the R-L District upon issuance of a Minor Use Permit:

(A) Residential Use Types (See Chapter 20.016).

Family residential – dwelling groups;
Farm labor housing.

(B) Civic Use Types (See Chapter 20.020).

Day care facilities/small schools.

(C) Commercial Use Types (See Chapter 20.024).

Agricultural sales and services;
Animal sales and services – auctioning;
Animal sales and services – veterinary (large animals);
Cottage industries – general.

(D) Agricultural Use Types (See Chapter 20.032).

Packing and processing – general. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.025 Uses Subject to a Major Use Permit.

The following use types are permitted in the R-L District upon issuance of a Major Use Permit:

(A) Residential Use Types (See Chapter 20.016).

Family residential—cluster development.

(B) Civic Use Types (See Chapter 20.020).

Educational facilities;
Lodge, fraternal and civic assembly;
Major impact services and utilities;
Religious assembly.

(C) Commercial Use Types (See Chapter 20.024).

Commercial recreation—outdoor sports and recreation;
Commercial recreation—outdoor entertainment;
Transient habitation—campground;
Transient habitation—lodging (limited);
Transient habitation—resort and recreational facilities.

(D) Agricultural Use Types (See Chapter 20.032).

Packing and processing—commercial cooperage.

(E) Extractive Use Types (See Chapter 20.036).

Mining and processing. (Ord. No. 3639 (part), adopted 1987; Ord. No. 3972 (part), adopted 1997)

Sec. 20.060.030 Minimum Lot Area.

One hundred sixty (160) acres. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.035 Maximum Dwelling Density.

One (1) unit per one hundred sixty (160) acres. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.040 Minimum Front and Rear Yards.

Fifty (50) feet each. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.045 Minimum Side Yards.

Fifty (50) feet each. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.050 Setback Exception.

Any nonconforming parcel which is less than five (5) acres shall observe a minimum front, side and rear yard of twenty (20) feet. (Ord. No. 3639 (part), adopted 1987)

Sec. 20.060.055 Building Height Limit.

Thirty-five (35) feet. (Ord. No. 3639 (part), adopted 1987)