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Thread: Highest and best use - for the developer?

  1. #1
    Cyburbian Habanero's avatar
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    Highest and best use - for the developer?

    In a recent conversation another person, a planner, stated they felt the setbacks imposed on a particular tract limited the "highest and best use" of the property (the setbacks left more than enough room for development but the developer wanted to cram more into the lot). My question is this: as planners should our focus ever be on the "highest and best use"? Should we be concerned with getting developers the highest/best use out of their property for potential tax benefits? Thoughts? Ideas?

    I'm not sold on thinking I need to look out for the developer's best interest as I work for the municipalicy. Then again, when thinking of master planned developments, it seems like planners often jump to the "let's make this more than what it could be", ideas of integrating uses and trying to inflict so-called mixed use ideas on a development.
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  2. #2
    Unfrozen Caveman Planner mendelman's avatar
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    I would say that you need to balance the needs of the municipality, the property owner, and the requirements of the code. Setback variances can be recommended for some projects, but not others. It shouldn't be a completely unjustified recommendation, though.

    In the context of a PUD though, I think planners should work to get the best product as possible, and that may be to the immediate of the developer, but also the municipality.
    I'm sorry. Is my bias showing?

    Let's not be didactic in this profession, because that is a path to disillusion and irrelevancy.

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  3. #3
    Chairman of the bored Maister's avatar
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    "Best and highest use" is a phrase heard escaping almost exclusively from the mouths of developers and realtors. The implicit assumption is of course that whatever the proposed development is, it will enhance the tax values and naturally every city wants to increase revenues, right? So lemme build whateverthehelliwanttoalready! While increasing a tax base is helpful, it certainly ain't the Holy Grail.

    How does the proposed use fit within the context of the surrounding neighborhood/community? Does it enhance/impact the quality of life or otherwise provide benefit to the surrounding area? These are often considerations notably absent from folks minds who use the phrase 'best and highest' and it's our obligation as planners to ensure they are taken into account.
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    Cyburbian Cardinal's avatar
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    It is a term that I am starting to hear more often in these more difficult economic times. There is not market right now for what the site may be zoned, so the developer is trying to change its zoning because there may be a market demand for another project. Land use is not based on what is buildable right now, but on what is best for the community in the long run.
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  5. #5
    Cyburbian wahday's avatar
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    I would just echo the consensus here. My first question would be "highest and best use" for whom? Land parcels do not exist in a vacuum and the things built on them impact the surrounding areas in innumerable ways. I think the "balance" perspective Mendelman presented says it best.

    In architecture school, students are encouraged to think outside their individual parcel of land to consider how their building designs interact with and impact the larger context of the area. Planners and developers should be considering the same issues. Its not just about the income potential of a particular parcel - it has to also be balanced with the surrounding context, especially if this maximization of one piece of land reduces the income potential of another. Balance, balance, balance.
    The purpose of life is a life of purpose

  6. #6
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    As already echoed in this thread - "highest and best use" strongly reflects the perspective of the developer (although it could be argued that a Municipality also strives to provide its residents with the highest and best use of land
    possible).

    As a planner in the public sector I offer an objective verbiage comparison to the topic of this thread that my department looks for in reviewing and providing recommendations on land use proposals - "appropriate and compatible use".

  7. #7
    Cyburbian Rem's avatar
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    I hear the term get used as code to mean "the greatest commercial return". While I don't know of anywhere the term has been codified, I think it needs to be read in a holistic manner to make sense. In particular, it needs to recognise the "public good" (used in the economic sense) as an element of the meaning. If the term is used that way, it is a suitable and useful term for planning.

    Taken as a whole, the NSW Planning Legislation contains a set of objects that provide a holistic description of highest and best use, viz;
    5 Objects
    The objects of this Act are:

    (a) to encourage:
    (i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,
    (ii) the promotion and co-ordination of the orderly and economic use and development of land,
    (iii) the protection, provision and co-ordination of communication and utility services,
    (iv) the provision of land for public purposes,
    (v) the provision and co-ordination of community services and facilities, and
    (vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and
    (vii) ecologically sustainable development, and
    (viii) the provision and maintenance of affordable housing, and
    (b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and
    (c) to provide increased opportunity for public involvement and participation in environmental planning and assessment.

  8. #8
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    There are a whole host of issues here and what I find most annoying as a private sector planner is the public sector planner who feels its his/her role to arbitrarily make recommendations to developers, above and beyond their municipal code because they feel they know best but aren't capable of getting thier community to codify it.

    I'm as pro "doing the best for all involved as anyone" but what really gets me going is when a community tries to steer development and enforce codes that don't exist. There is this head-butting of sides when a developer spends thousands and thousands of dollars to design a project and then have someone at the municiapl level say "That's great, but we want you to do this." To which the developer invariably says "Well, this is my as of right plan, I spent enormous time and energy and dollars to develop it within the code, did my feasibility analysis and economic analysis and now you want me to redesign it?"

    There is a major reason why their is such an acrimonious relationship between developers and planners. Planners have ideas in their heads of how things shojld be that are in direct opposition to what they local code says and they feel somehow that it's their role to hold a developer to some unattainable and uncodifed utopia.

    You can argue all you want about a developer not making concessions in their projects, but much more powerful than "highest and best" is the phrase "as of right" which basically gives them the power to do as the code permits, without the constant "tastemaking" and arbitrary wants and needs of a community and it's utopian planners.

    The best planner in my area who happens to actually be a planning director for a community once said to me "It's not my role to arbitrarily review a project. It's my job to administer the code and ensure all projects meet the code. If the community has a problem with the developments they are seeing, then change the code."

    His point was, if everyone hates the codem then lets change it. If not, it's not his role to act outside the code.

  9. #9
    Unfrozen Caveman Planner mendelman's avatar
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    blfo, I don't see anyone in this thread saying they perfrom "arbitrary" plan review(s). Hab mentioned where a developer would need a variance to do a specific site plan and that part of the argument for the variance would be "highest and best use" (whatever that means).

    I agree with you (and I presume other cyburbians would to) that if it meets the code then it must be approved, especially for "as-of-right" projects,

    But a developer or planner or elected officials trying to justify some extra approval or relief simply by arguing "highest and best use", will have little wieght, at least where I am.
    Last edited by mendelman; 10 Apr 2008 at 10:20 AM.
    I'm sorry. Is my bias showing?

    Let's not be didactic in this profession, because that is a path to disillusion and irrelevancy.

    Six seasons and a movie!

  10. #10
    Cyburbian solarstar's avatar
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    In the wonderful land of property rights, we hear the term "highest and best use" from developers but don't use it ourselves. (How on earth do you define "best"?!?) We have to evaluate concurrency at the "most intense use allowable" within the proposed zoning, unless there is a PUD or similar mechanism in place that would reduce potential impacts.

    Bflo is complaining about arbitrary plan reviews, which is another topic. I may not like our code sometimes but it is what it is - it's not up to me to make up something different. I agree with mendelman on that point.

  11. #11
    Cyburbian Plus Zoning Goddess's avatar
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    Down here in FL, "highest and best use" is a developer and/or property appraiser term. For the property appraiser, it's what's the most intense use allowed right now. For the developer, it's what the hell can we get on this site? I don't think it's a planning term at all and I have had no problems with telling commissioers that in public hearings. It's nonsensical in planning terms. And it's always amusing to hear developers' objections to that description.

  12. #12
    Member Oz_developer's avatar
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    As a developer I would love to be able to convince councils to allow me to put a 10 storey apartment block in a low rise area because it will give them more ratepayers. However, because I don't want my city ruined, I absolutely agree that the codes should be enforced. If a developer can't make a project work under the codes, then he paid too much for the land. Tough luck buddy.

    However, I can see where there may be some special cases eg hospital development where a relaxation of the controls may be a benefit to the community.

  13. #13
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    Highest and Best Use?

    I am not a planner, but I have worked with and have friends that are. I am an entrepreneur/founder and CEO of a non-profit Community Housing Development Corp. I have a public sector background in redevelopment and community development as an affordable housing professional. So..........my opinion, as idealistic as it my be, is stick to what you know. As I have said, I am not a planner, but if I were I would not try and be the architect, developer or activist. If my job is to enforce and advise on planning ordinances, then just do that. Let the development process do its thing. Highest and best use is subjective in my opinion. Take a look at what the City of Hercules is doing with the zoning ordinance. It has taken the approach of Form Based Zoning and was the first city in the state of California, I believe, to implement this concept. I know its hard to just be an ordinary smuck, like Ray Leotta claimed to be in the movie "Good Fellas", but if were going to be ordinary smucks, then let's be the best smucks we can be.

  14. #14
    Cyburbian Streck's avatar
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    Confirming that "highest and best use" is a real estate appraisal term is Wikipedia:

    http://en.wikipedia.org/wiki/Highest_and_best_use

    This site provides good examples of its meaning.

  15. #15
    This is a real estate appraiser's perspective:

    highest and best use
    The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity (Dictionary of Real Estate Appraisal, 4th Edition, Appraisal Institute). .
    Legal permissibility consists of public and private controls, laws, and restrictions, of which zoning is often the most frequent or well known.

    Physical possibility is size, shape, topography, access, curb cuts, etc.

    Financially feasible considers the marketplace, including market rents, vacancy, absorption, economic life.

    Value and how the marketplace uses land is then derived from which use fits the criteria and results in the maximum value. Decisions like hold as vacant, build, continue "as is", demolish, convert, remodel, take into consideration the H&BU analysis.

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