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Zoning Adjustments

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timindp

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Jul 6, 2007
Professional Status
Certified Residential Appraiser
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California
Do you guys adjust for zoning, like R-1 and R-2? Do you put it as a separate line item on the grid or under location?
 

Howard Klahr

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Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
It depends ... is there another locational characteristic that needs to be addressed? If not then it doesn't matter. If so you can split them up on separate lines if you wish.
 
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Don Clark

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Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Do you guys adjust for zoning, like R-1 and R-2? Do you put it as a separate line item on the grid or under location?
Not unless it has an effect on value caused by limitations on use, or it is a grad fathered use that the comparables do not have. But, i have never made such an adjustment in almost 40 years as an appraiser.
 

Tom4value

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Joined
Dec 4, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Nope. Here in MA, more than half of homes are located on lots that no longer conform to zoning. By law, they are grandfathered and can be rebuilt if destroyed by fire or other natural occurrence. No market data I have seen can justify an adjustment.
 

The Warrior Monk

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Mar 30, 2005
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Certified General Appraiser
State
New York
It don't think of it in terms of zoning, but rather lot utility. As an example for residential properties, I come across zoning designations in the same area where both have the same minimum lot size requirements, but one lot may be entirely cleared and another lot may be less the 50% cleared. The lot that may be entirely cleared typically has much greater utility, resulting in possibly a larger home being able to be built on the property, and more accessory structures being able to be fit on the property.

I may use zoning adjustments on commercial properties. For example, one type of zoning, such as "Office District" may be very restrictive in terms of usage allowed, but "Village Business" may allow all of the Office District uses, plus uses that tend to command higher rents.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
It don't think of it in terms of zoning, but rather lot utility.
I believe that these are two separate and distinct characteristics that would warrant separate analysis and consideration

Not unless it has an effect on value
Isn't that the basis of any adjustment?

i have never made such an adjustment in almost 40 years as an appraiser.
This issue is much more common in commercial properties as opposed to residential in that comparables are much more often located within the same development if not the same neighborhood which is frequently subject to the same zoning designation. However, there are circumstances where the issue would arise.

Do you guys adjust for zoning, like R-1 and R-2?
What is the specific difference that you feel warrants adjustment?

Also keep in mind that there can be private restrictions that may warrant adjustment and yet the zoning is the same. This would possibly occur in an area zoned PUD and yet proximate developments have HOAs with CCRs or other regulations that might warrant the need for adjustments. More often comps would just be selected from different development but in certain situation that might not be an option.

Remember it's not about the dirt but rather about the property rights
 

gregb

Elite Member
Joined
Sep 3, 2011
Professional Status
Certified General Appraiser
State
California
Do you guys adjust for zoning, like R-1 and R-2? Do you put it as a separate line item on the grid or under location?

Guess appraisal 101 means understanding the difference in Highest & Best Use between an R-1 and R-2 zoned site, which could impact value, marketability and market appeal. Different density allowances should be considered. In my area, there are R2 and R3 sites, virtually across the street from each other.
 
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