Highest and best use question (SFR on R3 Zoning)

[Lee Lansford]

Hello, everyone! I hope we're all having a good week

I have questions regarding H&B use.

The subject property is located on R-3 zoning which is multiple dwelling zone in my area & It allows group dwellings, multiple dwellings, apartment houses etc.

Subject property type & size : 900 Sf SFR
Lot size : 2300 Sf

I assume it's possible to build SFR on multiple dwelling zone but it's not financially feasible I think. I also checked whether the zoning has changed, but I couldn't figure it out.

Should I explain in the addendum that the subject property is not highest and best use? If so, could you please advise what to write in the addendum?

I found more about zoning info so please see attached file. It seems like the lot divided by 4 small lots(dash dots), so the lot size is very small.. The subject property is blue highlighted. Orange color means R3 zoning

The question to address is the one asked of you: is the H&BU as improved the current use? That is, do the improvements contribute to the MV of the property as a whole? That's for starters.

 

[Dublin ohio]

Subject's site is 2300 sf. and the minimum lot size for a 2 family is 2900 sf and density will not allow 2 units or more on subject's site. How could HBU be anything but "as is". Unless you want to get into discussing assemblage.

 

[Fernando]

Subject's site is 2300 sf. and the minimum lot size for a 2 family is 2900 sf and density will not allow 2 units or more on subject's site. How could HBU be anything but "as is". Unless you want to get into discussing assemblage.

I encounter this often. It was legal back when originally built but throughout the decades, local government imposed stricter requirements into their zoning ordinances.
Even today such a tiny house wouldn't qualify to be built on the site.
Thus, it's grandfathered in and that's worth a lot in my investor eyes.

 

[Dublin ohio]

I encounter this often. It was legal back when originally built but throughout the decades, local government imposed stricter requirements into their zoning ordinances.
Even today such a tiny house wouldn't qualify to be built on the site.
Thus, it's grandfathered in and that's worth a lot in my investor eyes.

WTF are you talking about

What can I build in the R-3 zone?

• A single-family residence.
• Two units (attached or detached) if the lot size is at 2904 square feet and the land use category allows at least two units.
• Multiple dwelling units (attached or detached) with a maximum density established by the land use category and 30 dwelling units per net acre.
• When calculating density for more than one dwelling unit, always round down for fractions.
• For more than one dwelling unit, units can only be for rental, not for sale unless a land division is approved and recorded.

 

[Fernando]

WTF are you talking about

Current zoning has setbacks and other requirements to build. Appraiser needs to read the zoning and see if subject's current home can be rebuilt. If not forget about even a 2 unit building.

 

[Terrel L. Shields]

Appraiser needs to read the zoning and see if subject's current home can be rebuilt.

Does not matter unless the existing dwelling on the lot is worth less than the existing lot is worth by itself. And that might be the case in certain oceanside, lakeside, etc. lots where an old house detracts from value. 99 of 100 properties, an existing livable house does contribute something above the lot value "as if vacant and available for its highest and best use."

 

[Fernando]

Does not matter unless the existing dwelling on the lot is worth less than the existing lot is worth by itself. And that might be the case in certain oceanside, lakeside, etc. lots where an old house detracts from value. 99 of 100 properties, an existing livable house does contribute something above the lot value "as if vacant and available for its highest and best use."

I don't know what you're talking about. The lot around here usually worth more than the dwelling especially a small house.
Certain lots around here are not buildable because of the restrictive zoning requirements.
Lenders always want to know if the building can be rebuilt to same footprint after a fire .......or tornado in Oklahoma case.

 

[Terrel L. Shields]

The lot around here usually worth more than the dwelling especially a small house.

SO??? If the LOT as if vacant is worth MORE than the dwelling and lot, the HBU is "as if vacant"... Tear downs are worth less than the vacant lot.

And no not ALL lenders care if the building can be rebuilt or not.... especially in Oklahoma.