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Pending Zoning Change

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Rick Neighbors

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Senior Member
Joined
Jan 19, 2002
Professional Status
Certified Residential Appraiser
State
Texas
I live in a small town in north Texas, apx 6500 people, 2600 water meters, but it has a large parochial type university.
For the past 5 years the Planning and Zoning Committee has been working on a Master Plan for the city.
In the past, most of the town on the west side of the main road that runs north and south has been zoned R1/Single Family. The east side, where the university is, has been zoned R4/Multi-Family. It has single family, duplexes, apartments, etc.
Recently, this past year, the P&Z, at the urging of the City Council, is pushing to change the zoning for the whole town to single family, (except for the commercial zoning along the main road) and require that all other uses file a "legal non-conforming" permit that will have to be renewed every year. No renewal, you lose your CO, and can not occupy the property. You own a duplex rental property and forget to file, you lose the non-conforming waiver and can no longer operate it as a multi-family.

The city councils supposed purpose is to stop folks from renting garage conversions out to college students, and gas pipeline workers. And to "improve the property values in town".

Soooo, what kind of issues to you perceive in the future? Just something to comment on, especially since I will be continuing to do appraisals in this town.

Thanks,
Rick
 

jay trotta

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Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
Way to little info. - there must be a Town Planner, my suggestion would be go visit with them and get some perspective on what you can look forward to over the next several years.

Most changes are made with "future projections in mind".....that is the essence of change. Good Luck
 

Richard Carlsen

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Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Soooo, what kind of issues to you perceive in the future?
Several pop to mind right away without ever having experienced anything like this.

The first will be owner anger. You will most likely see and hear some arguments on appraisals you do on these properties in the future that tend to hearken back to the old use zoning.

Second, you will without a doubt, run into refi's or sales, that are non-conforming as they did not get the required annual permit. Were it me, I would condition every appraisal that I did in this area of change upon being supplied with a copy of a current permit. The condition would not be taken off until I had a copy of this renewed permit in my work file. The permit would also be copied into the addendum of every report. There is no way that I would go out on a limb based on someones verbal assurance over the phone that the permit was issued.

Third, this is another of those misguided local rulers deciding that it is in the best interest of the community to pass laws for the explicit purpose of raising property values. I've never seen that as part of their job description but that is just a personal opinion.
 

The Warrior Monk

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Certified General Appraiser
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New York
Third, this is another of those misguided local rulers deciding that it is in the best interest of the community to pass laws for the explicit purpose of raising property values.

I would've just stopped at the misguided part.:)

I have never heard of a similar scenario described by the OP. In my area, where the local planners are a PITA, when zoning is changed the existing uses become legal, preexisting, permitted uses...no variance or special exception permit required. Changes to the property, or course, will trigger all sorts of zoning issues.

The situation in the OP places an across-the-board burden on all of the affected property owners. That's likely to raise the ire of a significant part of the population, and possibly result a change in the plan.
 

Mike Boyd

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Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Some affected attorney will surely file a lawsuit against the town for unlawful "taking" of the property. I do not think the described use change could be enforced against existing improved properties. Some of the cities in my market area have changed all zoning to PD/planned development. Whether you are building a SFR, a MFR or a shopping center, the planed use must be submitted to the planning department and possibly to the planning commission before permits are obtained. However, once that process has been completed and a permit issued, it is permanent. This accomplishes the same goals except for the requirement that a new use permit be obtained each year.
 

Rick Neighbors

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Senior Member
Joined
Jan 19, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Zoning

Thanks all, especially Richard. That is what I am looking for. Thoughts that help me prepare for future appraisals. And I agree about misguided officials.....however anyone that can get enough votes can be a councilman in this town. No previous experience necessary. And no, we do not have a "town planner".

I personally have attended many of these P&Z meetings. I am currently the President of our Community Development Corporation more often called the 4B Board. One of my duties in this volunteer position is to try to attract folks to live and do business in our town. Difficult to say the least. I have been on this board for 7 years. My Secretary for my board is the local bank President. She has done a lot of research with her underwriters as to potential problems with loans in the current atmosphere. It does not look good, to say the least!

We have several misguided councilmen, a couple are way out there! How they got elected is anyone's guess, mostly due to voter apathy. Less than 10% of our voters actually use their rights as a voter. One of the councilmen is not even a property owner in this town, just rents. Source of frustration for several property owners that live elsewhere. One investor owns 9 properties and can't even vote in this town.

As our town is only 5 miles from the county seat, and that town is much larger, apx 5 times as large, we attract little in the way of retail or commercial business.

With the university here, rental property has always been a factor. Many folks have converted their garages into bedroom apartments for students and enjoy the rental income from those. The city has been lax in having code enforcement to say the least!

I predict that there will be several lawsuits in the future, and several folks have already hired attorneys. The proposed Master Plan called for zoning to be for future changes, with current use "grandfathered" in without the need for paperwork. But several of the councilmen are not happy with that and in their "infinent wisdom" have decided that their personal ideas for the future are the way to proceed. My own home, on the main road, has been zoned commercial, and I am only allowed to rebuild if the home does not suffer more than 85% damage.

So, I have already started working on the CYA issues in future appraisals in the area. I really feel sorry for "visiting Appraisers" that may not be aware of the issues.

Thanks,
Rick
 

Terrel L. Shields

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May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Reverse taking issue is very likely. A judge might even overturn the zoning. Apparently things are going pretty well in your area as any town with nothing better to do than worry over zoning certainly has too much time on their hands.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Reverse taking issue is very likely. A judge might even overturn the zoning. Apparently things are going pretty well in your area as any town with nothing better to do than worry over zoning certainly has too much time on their hands.


If allowed to continue, and nonconforming permits are pulled and not allowed, I would agree with Terrel there could be a very strong case for inverse condemnation. Typically zoning is not a taking, however, in this instance, where all the properties on which zoning is change will be listed as nonconforming and require annual review, I think zoning may well be looked upon as a taking of the property, particularly when financing is hampered because of the annual review and the potential for denial of continued use.
I see this as a real opportunity for an appraiser, for at least a case or two, until the possibilty of setting aside the zoning by a court is achieved.

The ramifications of your appraisal reports until that time are tremendous, and most probably will need to rely on extraordinary assumptions that denial will not occur and the use shall continue for the life of the property.
 

Walter Kirk

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Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I know nothing about Texas land use regulations but I have never heard of any landowner anywhere being forced to obtain a permit for a non conforming use. This sounds like a misunderstanding or a town council or lawyer trying to take more power than they are entitled to.

As to the effect on value, there is very little that you can prove until you can detect a market reaction.
 
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