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Septic vs Sewer

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Terry McDaniel

Thread Starter
Freshman Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
I can't remember the last time I posted for a reply on this forum...but, here goes. I have been contacted by a city in the area I live with the following request: "We are considering laying a sewer line to approximately 10 existing lots that are located inside the city limits. The lots have 7 existing houses and 3 vacant sites. The 7 occupied lots are all on septic tanks. How much will the site values increase with the sewer lines laid?" With that said, lots sales in this community have not occurred in several years in the area of the subject; or, in any other similar area in the community. It is not unusual in this community to have homes with septic tanks inside the city limits that have been converted to sewer; however, in order to value the difference the assumption would have to be made that the house remained at the same value over the period of years that the septic remained in place. That is not the case as the estimated value of the properties changed over a period of 15 years (length of time from septic to sewer). I have been appraising in this area for 18 years. Yes, I know what the city is doing. Charging them for the sewer and then raising the valuation for tax purposes. I am thinking along the following lines: A. What does it cost to put in the sewer and use that figure. B. I cannot complete the assignment because of the lack of information in order to develope a "comfortable number". C. It doesn't change the value as everything still rolls downhill. I would appreciate any advice. Terry Mc
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Terry, I don't see how it effects market value either way. A sewage system is a necessary improvement that all properties need. If city sewers are not available, then septics are needed. I have never been able to prove one home sold for more because it had city sewers. Now, if you were comparing the property to a city property with all city utilities then maybe there might be an adjustment. However, the subject neighborhood is still its own neighborhood and property values are based on that specific neighborhood and other neighborhoods may have other appeal that this neighborhood does not have (curbs, gutters, sidewalks, etc.). The same goes for water supplies. A home has to havea water supply. There are benefits for city water and there are benefits for a well, but overall they are both just a needed water supply. Just my opinion, of course.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Terry:

In your area does the city slap a special assessment on the parcels to pay for the sewer "improvements"?

In our area, typically the costs are borne by the propertyowner, making any such improvement an actual cost of ownership...
 

Terry McDaniel

Thread Starter
Freshman Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Lee Ann - Oh yeah! That's the purpose. To set the "cost of ownership" to the current site owners. I have read several of your replies on the forum and I would be interested to see what your take is on this. Thanks TMc
 

Terry McDaniel

Thread Starter
Freshman Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Tim - That's really what I think too. I personally think that the city is just trying to lay off the cost to someone. I have "always" said that septic = sewer and water well = water utility; however, when/if the landmass shifts under the house and the septics all break and the water well is no longer functional (West Texas - sandy loam soil over caliche - hairline cracks in walls and brick exteriors are common) it appears to me that the cost to cure is the homeowners and IF it were on city utilities, the cost to cure would fall on the city. Therefore, isn't sewer better than septic???? The more I think about this assignment, the less I like it. Thanks for your reply. TMc
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
septic = sewer and water well = water utility
For well over 90% of MY market, I quite agree!! Under circumstances similar to what you are describing I have found little or no market value difference for one system over the other.

We have an area in which the original sewer 'system' for several adjoining suburban subdivisions was several large lagoons... they have recently (over a great deal of objection, and at no little cost) been forced to connect to the municipal system. There appeared to be some turmoil in the first year of 'pending', now it appears that the market has chosen to ignore the fact that the homes in that area have 'specials'... beyond the normal taxation. Darn things appear to sell for as much as the ones across the highway with no specials.... Buyers are stupid!!

The more I think about this assignment, the less I like it.
Grin... or you could be bored.... If you do it charge them PLENTY!
Let us know what you wind up doing.
 
Joined
Jan 16, 2002
Professional Status
General Public
State
North Carolina
Terry

After reading through the posts, I would agree with most posters, that all else being equal, the utility of the site does not really change.

However, things in my market are usually not that simple.

The advent of sewer in neighborhood may change some lot values but not change others. The one acre site that never got built on because it would not perk and had limited value except as surplus land to an adjoining tract, now can be built upon and becomes excess land. The one acre site which did perk probably is built upon and there would be little change in value unless the neighborhood had a history of failing septic systems.

The issue of zoning or lot size also matters. The vacant one acre site which formerly could only support one residence now may be able to support three residences on three smaller lots.

So, in my opinion, the answer is "it depends." Possibly there are other issues which might make the value change when sewer becomes available, but this is the first that came to mind.

I still do not understand why the city wants the "value." I always thought the intent was for the city to have the properties recieving the new services to help offset the cost of the service, not have the city share in increased values (except through taxes down the road).

Regards

Tom Hildebrandt GAA
 

Daniel Williams

Senior Member
Joined
Jan 14, 2002
Professional Status
Appraiser Trainee
State
Illinois

when/if the landmass shifts under the house and the septics all break and the water well is no longer functional (West Texas - sandy loam soil over caliche - hairline cracks in walls and brick exteriors are common) it appears to me that the cost to cure is the homeowners and IF it were on city utilities, the cost to cure would fall on the city. Therefore, isn't sewer better than septic????
Terry,

I have Municiple water and an aeration (septic ) system. If BOTH went down due to breaks or ruptures I could/would have my aeration back on-line quicker and cheaper than I could the fresh water (municipal) line. I would ALSO be repsonsible for any expense from the "Tap" to my home! Same with the sewar (if i had it). In my parts a septic system can be on site and functional very quickly. any tie in to public systems could take a while....especial when dealing with government workers or during an emergency.

just my 2cents.
 

Terry McDaniel

Thread Starter
Freshman Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Point duly noted. You are, of couse, right about the replacement cost from the tap to the street. I do appreciate the info I received regarding this post. I ALMOST would concede that the septic system may be better than the sewer!! Thanks, TMc :eek:
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
Let me scatter a few pennies into this discussion:

At least here in the Thule Bushes of upstate NY .. where the woodchucks include the people .. taxes significantly impact values! City sewers cost dollars .. and the capitalized additional costs can measurably change (reduce) the value of the property.

I've always taken the position that the enhanced value of the property, due to its access to municipal services is offset by the decline in value due to the additional taxation. Therefore .. net 'zero' to total valuation, or so close that there is no way to effectively measure any difference ..
 
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