Dc Zoning Highest And Best Use Question . Urgent Help

[adia9]

Hi DC appraisers . I received this condition from an underwriter and do not know a response to satisfy this condition. Can someone help with formulating a response ?! There are no other comps that I can locate within the same zoning district but I think a good response could suffice.

The Subject’s zoning is identified as C-2-B with a description in the report of Res single family row. However, the Office of Zoning at DC.gov summarizes the Subject zoning as… Permits matter-of-right medium density development, including office, retail, housing, and mixed uses to a maximum lot occupancy of 80% for residential use and 100% for all other uses.

In addition, listing commentary states…. Zoned ARTS C-2-B = potential commercial use


Please address the subjects zoning and provide a Highest and Best use analysis.

 

[JTip]

http://www.appraisalinstitute.org/assets/1/7/common-errors-issues.pdf
pg 10,11,12 and 13

 

[timd354]

Hi DC appraisers . I received this condition from an underwriter and do not know a response to satisfy this condition. Can someone help with formulating a response ?! There are no other comps that I can locate within the same zoning district but I think a good response could suffice.
This is not an issue that needs a formulated response that you hope will make the problem go away...this is an issue where you need to do a proper HBU analysis.

The Subject’s zoning is identified as C-2-B with a description in the report of Res single family row. However, the Office of Zoning at DC.gov summarizes the Subject zoning as… Permits matter-of-right medium density development, including office, retail, housing, and mixed uses to a maximum lot occupancy of 80% for residential use and 100% for all other uses.

In addition, listing commentary states…. Zoned ARTS C-2-B = potential commercial use


Please address the subjects zoning and provide a Highest and Best use analysis.

You need to perform an in-depth analysis of the subject's highest and best use and provide the results of that analysis including a summary of the factors that you analyzed and a summary of the support for your highest and best use conclusion.....just checking the check box is not enough! You also need to correctly report the applicable zoning and the describe the allowable uses in that particular zone and even the underwriter was smart enough to figure out in 2 seconds that the C-2-B zone is not solely a residential zone.

Regarding the property....the C-2-B zone in DC is summarized as follows:

C-2-B
Permits matter-of-right medium density development, including office, retail, housing, and mixed uses to a maximum lot occupancy of 80% for residential use and 100% for all other uses, a maximum FAR of 3.5 for residential use and 1.5 FAR for other permitted uses, and a maximum height of sixty-five (65) feet. Rear yard requirements are fifteen (15) feet; one family detached dwellings and one family semi-detached dwellings side yard requirements are eight (8) feet.


Given that your property is in a zone that allows for commercial uses in addition to residential uses and the listing for the property marketed the property by citing the subject's location in the C-B-2 zone as allowing potential commercial usage, there is an unanswered question as to whether the HBU of the subject property is the existing (residential) use or some commercial or mixed use.

By the way, and this is not meant as shot at the OP, but at least 75% of residential appraisers should walk away from appraising most properties that are located in zones that allow for multiple uses including residential, commercial, mixed uses, etc. because most residential appraisers lack the competence and experience to perform a proper HBU analysis in such a situation.

 

[Joe Flacco]

The ARTS overlay was created to encourage mixed use on the U Street and 14th Street corridors. Maybe assemblage going on there if within a block from 14th or U.

 

[Eli]

If you are not competent to address highest and best use, then advise the client of such and withdraw. Don't charge them a penny and withdraw. You will be fine if that is the case.

 

[Eli]

You can always advise the client of your incompetency and the steps you are taking to get competent by affiliating with a local appraiser. Just remember time is money.

 

[timd354]

The ARTS overlay was created to encourage mixed use on the U Street and 14th Street corridors. Maybe assemblage going on there if within a block from 14th or U.

The ARTS overlay district in Ward-1 is in the U Street corridor and goes mainly from 14th over to GA Ave along U and V streets with some of it on FL, VT and GA Aves.....it would not take assemblage to turn one of the rowhouses in that area into a restaurant, jazz club, bar, small shop, offices, etc. to join the many other similar uses in that area....A residential appraiser who does not know what he is doing in an area like that can get in over his head in a big hurry and would be wise to know when to walk away.

 

[Zero]

Hi DC appraisers . I received this condition from an underwriter and do not know a response to satisfy this condition. Can someone help with formulating a response ?! There are no other comps that I can locate within the same zoning district but I think a good response could suffice.

The Subject’s zoning is identified as C-2-B with a description in the report of Res single family row. However, the Office of Zoning at DC.gov summarizes the Subject zoning as… Permits matter-of-right medium density development, including office, retail, housing, and mixed uses to a maximum lot occupancy of 80% for residential use and 100% for all other uses.

In addition, listing commentary states…. Zoned ARTS C-2-B = potential commercial use


Please address the subjects zoning and provide a Highest and Best use analysis.

Assuming that the transaction amount is >$250,000 and your profile is accurate (that you are licensed, not certified) you are outside your scope of practice, per AQB. IMO, as a a licensed appraiser you should never have accepted this assignment. Admit your error, offer the client a full refund and withdraw immediately. If you don't, they really should report this to the DC board. If I was the UW or reviewer, I would report i, anyway, under mandatory reporting requirements.

 

[glenn walker]

First question I have is how large is the parcel ? The reason I ask is because in my area there are many homes located on Commercial and Industrial zoned lots BUT they are way to small to develop-and that is why they continue to be used for residential purposes. So in my area 90% of the time the highest and best use is the current use as a SFR. BUT I agree with the other posters H & B is more than checking a box but often it's not difficult if you have basic understanding of what can or cannot be built. I had one property were the prior appraiser stated the highest and best use was Commercial simply because of the zoning but the site was only 3,000 sq.Ft. and was surrounded by other single family homes. In California that would not even cover the set backs and the ADA required parking so even though zoned C-1 it's never going to be anything more than a SFR or a vacant lot.

 

[timd354]

First question I have is how large is the parcel ? The reason I ask is because in my area there are many homes located on Commercial and Industrial zoned lots BUT they are way to small to develop-and that is why they continue to be used for residential purposes. So in my area 90% of the time the highest and best use is the current use as a SFR. BUT I agree with the other posters H & B is more than checking a box but often it's not difficult if you have basic understanding of what can or cannot be built. I had one property were the prior appraiser stated the highest and best use was Commercial simply because of the zoning but the site was only 3,000 sq.Ft. and was surrounded by other single family homes. In California that would not even cover the set backs and the ADA required parking so even though zoned C-1 it's never going to be anything more than a SFR or a vacant lot.

The older urban centers of the east coast are very much different than California.....in the area that I believe the the OP is referring to in DC, very small row houses on very small lots with no available parking spaces are often utilized for commercial uses and often the HBU of such properties is commercial...see the photos below of pretty typical street scenes from that area