One parcel, half zoning residential, half zoning commercial

[alebrewer]

Urban planners work for govt and are in a position to make decisions. Our role as appraisers doesn't involve making such decisions.

Yes and no. Our role specifically as it relates to opinions of value does not relate to making such decisions, but that's not all we do (or at least that's not all we are qualified to do). Seems to me that consulting work would, in fact, employ our expertise at providing opinions on what decisions to make - if not actually making the decisions...

 

[George Hatch]

At least a thoughtful post and attempt to help the OP - thank you. Question, though. The Commercial property (2 storefronts) cannot be located on the residential portion of the zoning, correct? Seems like the most challenging piece would be the site analysis. Unless, of course, you have vacant site sales with similar zoning isuses.

Well, if by challenging you mean more complicated than most other parcels which have fewer alternatives, then sure. The thing is, that combo zoning isn't even the most common way such projects get built. As evidenced by the point that most existing mixed use projects (in my region, anyway) weren't built on multi-zoned parcels.

Zoning itself isn't the only element involved. Let's say I have a parcel zoned for light commercial or office/professional or whatnot but it's got a secondary location. If the zoning regs for those sites also allow mixed use that might be the most profitable way to develop those sites, which in turn would make those sites directly comparable to each other and to the subject despite the different zoning. Shape of the lot comes into play, too. For a narrow/deep parcel the rear half doesn't have as much utility to a commercial use as the front half, so in that situation adding a residential use or a service use might be a more profitable use of that portion of the site.

Drive through these business districts of these small towns located out and away from the huge metro areas and look at all the wierdo one-off properties that pop up on Main Street and in the transitional zones paralleling Main Street. Those all get appraised, too. If your day job included the wide cross section of property types and combos you'd eventually become acclimated to those problems. It's no different than appraising an SFR in a neighborhood you're not familiar with - the process isn't actually different, it's just "more".

 

[alebrewer]

Well, if by challenging you mean more complicated than most other parcels which have fewer alternatives, then sure.

That was kind of my whole point from the beginning - not that it couldn't be done, but that it was more challenging than a simple H&BU analysis. That seemed to get lost in translation, however. And to the post about the planners, I was kind of trying to point out that, just because something can be done (e.g. appraised/analyzed as a multiple zoned parcel), doesn't mean it SHOULD be done (as evidenced by the consensus of the planners).

And again, not my forte (I'd assume commercial appraisers run across this scenario more so than residential appraisers), but it seems that (extensive experience from some of the posters aside) this would be a fairly uncommon occurrence. Just hope you were able to help the OP with their concern.

 

[George Hatch]

That was kind of my whole point from the beginning - not that it couldn't be done, but that it was more challenging than a simple H&BU analysis. That seemed to get lost in translation, however. And to the post about the planners, I was kind of trying to point out that, just because something can be done (e.g. appraised/analyzed as a multiple zoned parcel), doesn't mean it SHOULD be done (as evidenced by the consensus of the planners).

And again, not my forte (I'd assume commercial appraisers run across this scenario more so than residential appraisers), but it seems that (extensive experience from some of the posters aside) this would be a fairly uncommon occurrence. Just hope you were able to help the OP with their concern.

City planners aren't that concerned about HBU as it relates to the value and marketability of a property. They are more geared toward social engineering and the collective good of the community. That's not a bad thing when considering their role but it does speak to the point that their role and their priorities are way different than that of an appraiser. Or even a developer.

I've told developers before that the mixed use project they're planning for a particular location probably won't be as profitable as a homogenous use. They usually don't listen, and then they wonder why it takes them 2+ years to sell off all the storefront condos vs the 3 months it took to sell off the residential units overhead. Why the $1.25/sf rents that location will generate is insufficient to support a $300/sf sale price that would yield a profit margin for them.

OTOH I've suggested mixed use projects for certain locations or parcels as being a potentially viable solution, too. All RE is local.

 

[alebrewer]

OTOH I've suggested mixed use projects for certain locations or parcels as being a potentially viable solution, too. All RE is local.

Great example of consulting - either as a stand alone assignment, or as part of a valuation assignment. Which, to my point, is a service that appraisers can, and often do, provide (aside from strictly valuation services).

 

[Carnivore]

Normally, mixed use properties are not under 'split zoning'. They are under a specific zoning (commercial for instance) with a subordinate legal use for the mixed use. And, there aren't two sites - there is only one site. And yes - H&BU analysis DOES involve zoning (legally permissable). Again, I cannot conceive a 'normal' situation where there are two separate zonings on a single, non-subdivisable site. The example that Terrell gave is an example of a nimcompoop ex mayor who doesn't understand zoning... but again, not my area of expertise. Thankfully we don't have that kind of idiocy in my market.

I have a Mixed Zoning in my town. They are very close in wording. So Close the Zoning Description has Part A and Part B.

Well, if by challenging you mean more complicated than most other parcels which have fewer alternatives, then sure. The thing is, that combo zoning isn't even the most common way such projects get built. As evidenced by the point that most existing mixed use projects (in my region, anyway) weren't built on multi-zoned parcels.

Zoning itself isn't the only element involved. Let's say I have a parcel zoned for light commercial or office/professional or whatnot but it's got a secondary location. If the zoning regs for those sites also allow mixed use that might be the most profitable way to develop those sites, which in turn would make those sites directly comparable to each other and to the subject despite the different zoning. Shape of the lot comes into play, too. For a narrow/deep parcel the rear half doesn't have as much utility to a commercial use as the front half, so in that situation adding a residential use or a service use might be a more profitable use of that portion of the site.

Drive through these business districts of these small towns located out and away from the huge metro areas and look at all the wierdo one-off properties that pop up on Main Street and in the transitional zones paralleling Main Street. Those all get appraised, too. If your day job included the wide cross section of property types and combos you'd eventually become acclimated to those problems. It's no different than appraising an SFR in a neighborhood you're not familiar with - the process isn't actually different, it's just "more".

I have been reading this thread with Interest and also Part of my on-going continuous education

I Started thinking about all the small towns that I have passed through in NC and South Carolina. If you want to see mixed use, there indeed is where you will find it.

In the little town of Dallas, NC (part of my AO) they have a main street and it has all kinds of Use along that Street. Paralleling the main St to the north is a State Highway #279. It too has a lot of mixed use. Both roads mixed use are limited to residential and small business and no Industrial.

But if you go into the little towns heart you will find medium Size Industry; Cotton Mill's. and Machine Shops that used to support the Cotton Mill. Those are dead almost dead. there is a Rail line nearby with Spurs.

These little towns around the South are going through a period of "Renaissance" Some are doing well at it others are just plugging along.


Bessemer City, NC is well on its way in a "Renaissance" The have a small Historical district near the small uptown. people are beginning to spend some serious money in these areas.

So the Question is, Drum Roll... Is the HBU driving this change or is it the mixed market of buyers who are going against the HBU or forcing a change?

FTR; I go though He Dbl Hockeys Sticks when I complete a report like this that goes through AMC Phone Monkey. They simply are incapable of understanding what they are reading.

 

[George Hatch]

You know how it is - they have a program and that program fits most everything they see. After a certain point its up to the appraiser to let them know when the peg is square and not round.

But getting back to how mixed use properties came to be, back when storefronts were economically viable the shopkeeper setup used to be a lot more common - the local shop owner would live in the residential unit upstairs. That way they were on hand when the thieves came by to make off with their inventory.

As far as the zoning issues go, a lot of these were built prior to the current development criteria. So it wasn't planners who drove these trends, but the property owners. If you have a storefront, it might be profitable to add some apartments or some offices overhead so as to more efficiently use the site.

As far as appraising them goes, it's all in a days work. I need to understand how those properties function the same way I need to understand office or contractor yards or religious use properties or bed-n-breakfast inns or animal hospitals or gas stations or whatever else comes up. Somebody has to appraise it.