Unique Zoning Issue

[Laughing Heir]

Residential appraisal of a single family dwelling on some acreage. This is for mortgage financing.

The township adopted a zoning ordinance in 2003.

The parcel is irregularly shaped with a skinny portion (driveway) that is accessed by a state highway. The driveway portion is zoned 'highway commercial' and the remaining 9/10ths of the property is zoned 'residential', this includes where the improvement sits.

I haven't heard back from the part-time zoning officer and wonder if this is common in other areas and how some would suggest reporting this on the form/addendum.

The house's age predates the 2003 zoning ordinance by about 30 years.

This is not common for my region. Thanks in advance for any direction.

 

[Blueprint]

You are saying that one parcel is zoned differently via different sections?? Have you determined the HBU as residential??

I have never faced something like that. Hopefully you can get some seasoned input from peeps manana.

 

[Ray Miller]

Residential appraisal of a single family dwelling on some acreage. This is for mortgage financing.

The township adopted a zoning ordinance in 2003.

The parcel is irregularly shaped with a skinny portion (driveway) that is accessed by a state highway. The driveway portion is zoned 'highway commercial' and the remaining 9/10ths of the property is zoned 'residential', this includes where the improvement sits. I would place a zoning map in the report.

I haven't heard back from the part-time zoning officer and wonder if this is common in other areas and how some would suggest reporting this on the form/addendum.

I would then go to HBU, can the rest of the property be used as commercial or just the drive way portion? What is the value of the driveway portion? If the front drive way is used as commercial what affect would it have on the balance of the property?

Is all the property considered hiway commercail with the single family non-conforming legal?


The house's age predates the 2003 zoning ordinance by about 30 years.

This is not common for my region. Thanks in advance for any direction.

Lots of questions need to be answered before you can more foreward.

 

[RSW]

I had a small older home that I was asked to appraise once where most of the lot was zoned as residential but a small corner of the lot was zoned commercial. It was clear that the H&BU was commercial for the entire property since it was located right next to commercial buildings. I called the client and informed them of the situation and they cancelled the order.

It appears to me that the skinny portion of the subject is a legal access for the subject from the main road. To convert this to a commercial use may land lock the rest of the subject's site, which cannot be done.

The big question is what is the H&BU of the acreage? Is it agricultural, residential or commercial? How are other sites away from the main hwy being used? Is the area going through a transition from agricultural or residential to commercial?

 

[The Warrior Monk]

HBU is important in these types of assignments. If the commercial part of the property can split off and developed, that can impact value. If that portion is only large enough for access, then the commercial zoning might not be relevant.

Development in the area could obviously impact value, since the subject will be located to the rear of commercial-zoned properties.

 

[Marcia Langley]

If the HBU for the residential-zoned portion is for it to continue as residential the the access commercial-zoned portion might turn out to have an HBU as it is currently used which is a residential use.

If the HBU for the residential portion is to convert it to commercial, that is a different story.

If the commercial value of the driveway portion is greater than the value of the whole as residential use, then the HBU of the whole would be commercial.

 

[Laughing Heir]

This is the Township's zoning map.

The commercial portion is not wide enough by any stretch of the imagination to use as commercial, given the setbacks and min. lot size required for 'highway commercial' in this municipality.

Making this even more exciting is that the driveway provides a deeded easement to an adjacent property...without a maintenance agreement.

The site area is almost 5 acres, you can get an idea of the lot size and orientation from the zoning map.

 

[Marcia Langley]

I noticed two things from your zoning map.

There seems to be other parcels that are land locked. Do they have easements or does your locality allow landlocking? You said the commercial portion of the subject is burdened with an easement. That easement may reduce any commercial value and tend the HBU toward the present use.

Also, It appears there are other commercial lots that are smaller/narrower than the commercial zoned portion of the subject property. that will have to be addressed if you cite setback restrictions to lower an opinion of commercial HBU.

 

[Laughing Heir]

... Also, It appears there are other commercial lots that are smaller/narrower than the commercial zoned portion of the subject property. that will have to be addressed if you cite setback restrictions to lower an opinion of commercial HBU.

Good point Marcia.

This area is entirely built up with commercial properties as it has been established for a very long time. Zoning was adopted in 2003, so many of those parcels that are zoned highway commercial would not conform with the current ordinance if they were constructed tomorrow.

My supervisor has already begun his narrative on this; I appreciate all of the input - you gals and guys are making me look pretty intelligent!

 

[LordofTexas]

IMO, they are considering it mostly single family and I would treat it that way. Would it not be similar in thought to appraising a mixed-use property (say a beauty salon with a single family dwelling attached)? Previous underwriters I worked with used a 75% single family use rule before they would lend. Those properties were always zoned commercial with single family use.

Although Fannie Mae's guidelines are shown below and you can interpret it how you will; you ONLY have single family use on the majority of the site. So, appraise as an SFR with comments. A similar sale would be nice, hopefull?; in a perfect world.

Guidelines. If you haven't already, you should look them up.

•We will not purchase or securitize a mortgage secured by a property that is subject to certain land-use regulations (such as coastal tideland or wetland laws) that create setback lines or other provisions that prevent the reconstruction (or maintenance) of the property improvements if they are damaged or destroyed. (The intent of these types of land-use regulations is to remove existing land uses and to stop land development—including the maintenance or construction of seawalls—within specific setback lines.)

(Reguarding mixed use properties)

•The property must be a one-family dwelling that the borrower occupies as a principal residence.
•The mixed use of the property must represent a legal, permissible use of the property under the local zoning requirements.
•The borrower must be both the owner and the operator of the business.
•The property must be primarily residential in nature.
•The market value of the property must be primarily a function of its residential characteristics, rather than of the business use or any special business-use modifications that were made.