Zoning vs. Property Value

[H]

There is a vacant lot here in town with the start of single family on one side and apartment complexes on the other. It is currently zoned Estates, Single-Family, 1 acre or more, but it is very unlikely that anyone will build a single-family residence there because: 1) they haven’t already and it is hard to find land in the area and 2) of the hard edge the 3 story apartment building and parking alley with dumpster cause by butting up to the property.

The current owners wish to build row houses on the lot where the backs would form a wall to the apartment complex and the fronts would face the residential. They say that this is sort of the in between?? of apts. and SF), however the SF home owners in the area have gotten together to fight this rezoning for reasons of property value.

There is no doubt that the homes closer to the apt. complexes sell for less a square foot than the ones down the street away form the complexes, but the questions are:

1)Does anyone know about the impact row houses would have on property values verses the vacant lot and apts. that are currently there?
2)Or does anyone know how I could measure this?
3)Does anyone have any known precedents, thoughts on reasons one way or the other, or just any general observations about this?

Obviously this is a case sensitive topic where certain externalities apply in one location and not in the other, but I am more looking for general guidelines.

I would put up photos, but I think it is best to keep the property confidential.

Thank for your help.

 

[Jeff]

Well for starters, that doesn't sound like much of a SFD district if you have apt complexes and row homes.

But that aside, an occupied dwelling of any type is obviously going to better stimulate the property values of a neighbors property as opposed to the vacant lot.

I think what you are trying to get at is will the SFD sell nextdoor to the apts?? That is kinda hard to tell without seeing how ghetto the apts are. The row homes would probably be a nice transition between the two, but....

 

[H]

Mike D said, "I think what you are trying to get at is will the SFD sell next door to the apts??"

Actually, no. I am trying to justify whether this will actually negatively impact the SF property value as the residents say or not, and why? I am looking for a way or formula to determine this.

 

[Lee Nellis]

There is no certain way to determine what you are trying to. Too many factors are involved. It depends on how good/bad the apartments are, how good/bad the row housing would be, and how good/bad the existing SFD are. Without knowing more about it, I would say that a less dense transition made with row houses is probably the very best the owners of the existing SFD can hope for (unless they are willing to buy the lot), but whether the row house project will sell will depend not only how good/bad it is, but on how affordable it will be and the overall state of your local market for housing. You can spend a lot of money having appraisals done in a situation like this, but it is very hard to find directly comparable situations. Even if you do, the appraisal can be rendered more or less irrelevant by changes in any of the variables. At any rate zoning is not supposed to be about individual interests. It is supposed to implement the community's vision. So, the place to start is by asking what is the community vision for this neighborhood of mixed densities?

 

[H]

Thank you both very much for your input on this topic, however, I can not stress enough that I am not asking about the selling of any properties. I am in NO WAY financially connected to the property. I am a (hopefully) non-biased planner who is trying to figure out what is best for this property. I am looking for formulas or ways to determine the effect on property value. Know any? Maybe Lee Nellis is right and there are way to many factors involved here. Lee Nellis is definitely right saying that “zoning is not supposed to be about individual interests. It is supposed to implement the community's vision.” I could not agree more. But what community? The one that lives there now? Or the one that wants to have more affordable housing in the area and cant afford SF? Which community vision is zoning for?

 

[Jeff]

Huston said:

PS.
PS. Know any formulas or ways to determine the effect on property value? Thanks for your help.

Also, how do you justify ”an occupied dwelling of any type is obviously going to better stimulate the property values of a neighbors property as opposed to the vacant lot.”? I agree, but how is this justified?

PPS. I am a planner, not a developer.

I can't justify an occupied dwelling has a better stimulus on property value, its just a hunch. An occupied dwelling is more desirable than a vacant one, but not in all cases. In Philly some of the occupied dwellings are more run down than the vacant, and the occupants are less than desirable.

If this is such a concern, why not have the municipality look into buying the property, and converting it to a minipark?

Really, without having more info about the neighborhood, I don't think anyone here is going to be much help. For example, my employer builds $400K row homes (called townhouses) and $1 million SFD's. Stick any of these on that lot and the property values will go up. This is obviously not the norm, but it illustrates how wide the array of housing types and affordability goes.

 

[H]

Response to Mike D.

Well that part about the park is not going to happen, unfortunately. It’s that money thing, you know.

As for the other, I guess the question is too vague, and I probably did not word my question correctly. I wasn’t looking for an answer to this property, per say. Again, I am looking to see if there is a formula to determine property values as related to zoning (as a whole). I take it that you are saying the answer is, “there is not a formula that you know of, because there are too many factors in the equation”. Is this what you are saying?

I was just using this property as an example because it is currently an issue and I am fully aware that an expensive dwelling unit brings the value up and a cheep run down dwelling unit or vacant lot would bring the value down, but this is not good enough for what I am trying to do. I need to prove this…and I don’t know how.

I do thank you for responding and appreciate your input thus far.

However, I will rephrase and ask again:

Does anyone know a formula for determining property value with relation to what is zoned/built in the area?

 

[Cardinal]

Response to Mike D.
Does anyone know a formula for determining property value with relation to what is zoned/built in the area?

Absolutely not. As Lee says, there are too many variables. Studies in land economics may sometimes establish correlations between a property and the characteristics of its surroundings, but these can be very closely associated with the particulars of the locations studied. There is no quantitative way to estimate these impacts beforehand (although it is perhaps more likely to do so after the fact).

From general experience, I would say that the single family will usually be less desirable with multifamily adjacent. I do know of instances of the opposite. It is up to the owner of the vacant lot to demonstrate why it is to the city's advantage to rezone the lot. If it were in my community, I would be leaning to a Planned Residential Development, preferably owner-occupied, and with a design highly sensitive to the adjacent single-family residential.

Regarding design, it sounds as if the developer plans to face the "side" of the building to the street and to run the row homes down the depth of the lot. I would not advocate this under most circumstance, and especially not here. You might encourage the developer to look at a design that gives the appearance of a large home, rather than many attached units. While you did not mention density, I would hesitate to consider more than 3-4 units on the lot. If the developer complains, offer to recommend that the zoning remain single-family.

 

[Hedwig]

zoning vs. property values

This discussion is of interest because of a large, complex development proposed adjacent to my neighborhood; it would include not only a big box and multiplex, but several hundred units of "affordable" housing at much higher densities than exist in our neighborhood. We already have the county poverty housing and several trailer parks. One of our concerns is the impact on property values. Our hunch is that for people who do not intend to sell their property, and who live very near the development, this project will depress their property values because the project will not be something you'd want to live next to. Do you know of any studies correlating the effects on local residential property values when big commercial developments are built nearby? What we see here is that developers are interested in local vacant property for commercial speculative purposes, and those of us who don't own such property but are trying to preserve our residential quality of life are very suspicious that we will end up seeing our neighborhood become a very undesirable place to live-- so that even if we wanted to get out, we couldn't.

Quijote

 

[mike gurnee]

There are no formulae. A market study done today would hold no water in 10 years, for instance. The duplexes across from me in another location were great neighbors, but who knows about the second and third generation of landlords?

We should all have comprehensive plans for such issues; and zoning changes should conform with the plan.

Now, back to reality. In this type situation, we created a transition area as a conditional use. Up to a four-plex may be permitted on a case-by-case basis where a single family distirct abuts a more intense use. Such a transition area is limited:

"It is the intent of this conditional use to provide a buffer between intense land uses and lower density single family residences. ... This special use is not intended to change the character of the R-2 district to one of higher density development. Therefore, such use shall be allowed only for the single zoning lot which abuts a land use incompatible with R-2 type development. Thereafter, the permitted conditional will be considered a compatible land use within the R-2 distirct."

Out here, this provision is limited to our medium density residential district, for local reasons. Something similar could work just as well with lower density areas.

 

[Hedwig]

zoning vs. property values

Thanks for the info-- what you've said confirms the wisdom of the adopted plan for the area, which the developer's plan violates. The plan has a commercial zone, transitional zone, then residential. This development would stick the big box deep into the transitional zone where it doesn't belong. The heartache (or heartburn!) we experience here is that we spend years developing a plan, and the plan gets violated or ignored because development interests consider it little more than a nuisance to get around or even completely irrelevant. Then both planners and neighbors alike feel that all their hard work is wasted and that there is no point to planning at all. Why plan, when developers can manipulate elected officials with impunity? As a citizen, I sued our board of county commissioners last year when a majority of them voted to grant a variance in a case in which the proper procedure was a rezoning. County land use staff's position was entirely ignored by the elected majority. They even ignored their fellow commissioner who was an attorney and told them that what they were doing was illegal. My case went nowhere because I was representing myself pro se, before a judge with certain political connections. All the best plans in the world, it seems, can't stand up to politics...

Quijote :-\ :-#

 

[jordanb]

I'm of the opinion that it is not the government's responsibility to protect property values. If the development has potential to seriously make the area less livable then you have a case, and it should be argued on those grounds rather than on "property value" grounds.

One of the problems is that perceptions of higher-density, rental, and affordable housing is much worse than reality. People think they are dens of crime, etc, when in actuality they have little effect. Thus property values can be affected by developments that have no real impact on quality of life. The government should not stop these developments simply because of xenophobic public perceptions.

Fact is, when you buy a house and expect its value to appreciate, you are making a speculative real-estate investment. No government anywhere signed anything saying they would protect that investment, so you shouldn't be able to go to your zoning administrator and whine and cry when someone wants to build something nearby that will impact it.

 

[Hedwig]

zoning vs. property values

Unfortunately, in the case of where I live, the negative effects I fear are based on what actually has already happened here, not on xenophobia. The sheriff's office, the local police and our neighborhood's overworked, underappreciated volunteer fire department have been kept busy with drug busts, domestic violence calls and other violent emergencies at particular apartment complexes and trailer parks in our area-- this is a matter of public record. In the city limits, certain public housing complexes are notorious for not only their poor living conditions but for the crime that goes along with them. My neighborhood is one of the poorest in the area, with many residents living on inherited semi-rural land; they very rightly fear the urban crime and violence that they've already seen has accompanied absentee-landlord apartment developments around here. Because of the relatively high cost of housing, those of us who are modest homeowners here do not have the choice to move laterally to somewhere safer. The answer has to be affordable home ownership, not more "affordable" rental units that churn people through and do nothing to contribute to social and economic stability in the neighborhood. But the "affordable" housing that is built for purchase rather than rent has turned out to be really poorly built, causing lots of problems for folks who can't afford the repairs. These new neighborhoods crumble quickly, in more ways than one.

Those of us trying to live here are not speculating. We do not want to sell our homes. But for those of us eking out a living as artists, our home is our bank, the only thing we can borrow against to live on when sales are slow-- which has been the case since 9/11-- and it is important to us to maintain its value-- value that we've created ourselves through sweat, improvement and maintenance, not speculative value. We already live in a "red-lined" area where it is harder for residents to get loans than it is in other places. Our census tract shows very clearly how challenged our neighborhood is. We argue that the question of where to locate new "affordable" housing is an issue of basic equity: it needs to be distributed around the city rather than continue to be concentrated on the southwest side, deepening the economic and social divide between the rich and poor sides of town. Santa Fe used to be more mixed-- it didn't used to have gated communities uphill and ghettos downhill, and the more we continue down that road, the worse it will be for the stability of the entire community.

Quijote

 

[jordanb]

The local government does have a responsiblity, I believe, to ensure that development does not unduly affect residents' quality of life. That's the prupose of zoning. But if you feel that that your quality of life will be impacted, then you need to base your arguments on the specific ways in which it will do that. Vacuous arguments about "property values" don't hold water with me as the government has no responsability to insure or protect your property value.

Of course the solution to your quality of life concerns may be to provide better city services or modify the project to address your concerns rather than to eliminate it altogether.

I've seen very good affordable housing projects, both rental and for sale, and I've seen bad ones. From your description, these sound like bad ones but I wouldn't want to base my opinion on your assessment alone. Perhaps you should look into the details of how to create good developments, and rather than opposing it outright, act to have something built that won't deteriorate.

 

[Hedwig]

zoning vs. property values

(Quote)Vacuous arguments about "property values" don't hold water with me as the government has no responsability to insure or protect your property value.

Gosh, maybe if our local elected officials agreed with you, it would be easier to promote "affordable" housing in wealthier neighborhoods.(!) As it is, those arguments, vacuous or not, appear to be effective when raised by folks from that side of town...

(Quote)I've seen very good affordable housing projects, both rental and for sale, and I've seen bad ones. From your description, these sound like bad ones but I wouldn't want to base my opinion on your assessment alone. Perhaps you should look into the details of how to create good developments, and rather than opposing it outright, act to have something built that won't deteriorate.

You're right. We have put some effort in this direction, and have been stymied because the drive to build the stuff comes from out-of-state developers who have the ability to arrange financing and hire local agents to walk the projects through all the hoops, including massaging the political process. They come in with a prepackaged plan, as low cost and high profit as possible, which is very hard to compete with if you want to do something of better quality and more modest profits. The minute these out-of-state interests enter the scene, they set the profit bar high, giving landowners the expectation that their land has a certain speculative value-- if it is developed at highest intensity for lowest cost. Those of us who can offer only ideas, not cash, are at a distinct disadvantage. Nevertheless, it's really all we can continue to do: put the ideas out there and try to get buy-in from the elected officials, who have slightly more ability to take a vision under their wing and shepherd it through...

Quijote

 

[permaplanjuneau]

density v. poverty

I think the central problem with discussions like this is that the populace-at-large (including many planners, politicians, and property owners) sees density as a determining factor in the level of crime that an area experiences. The real problem, of course, is poverty, which drives people to crime (ignoring the un-punished crimes of shady politicians and greedy developers) when all other options have failed.

So, as has been said earlier in this thread, these row houses could be built in such a way as to bring a new economic demographic into the neighborhood--or they could be built in such a way that the tenants will be one step from homeless at best and contribute to the decline of the neighborhood at worst.

This is something that is purely up to the developer, permitting agencies, and the community itself. You know the situation, so all I can say beyond that is good luck.

Finally, I had the same thought as Cardinal, in that the building(s) could be designed as "big houses" with several residential units, thus creating a good transition from the single-family homes to the apartments.

Whatever you do, you should fight any design that turns its back on neighboring properties. Especially in an area that is already experiencing an increase in crime rate, it is important to keep "eyes on the street" and on any other spaces where muggings, rapes, etc. could occur, such as back alleys and side yards.

(said the guy from the town where skateboarding and being drunk in public are the big crimes)

 

[Hedwig]

I think the central problem with discussions like this is that the populace-at-large (including many planners, politicians, and property owners) sees density as a determining factor in the level of crime that an area experiences. The real problem, of course, is poverty, which drives people to crime (ignoring the un-punished crimes of shady politicians and greedy developers) when all other options have failed.

Thanks for making these points. When I asked the developer of the proposed high-density project near us how to ensure a preponderance of owner-occupancy rather than speculative purchasing of "affordable" housing by absentee landlords, who churn exploited poor people through their apartments as equity-building cash cows, he actually admitted this is a problem with the project, and that it is a problem he can't solve-- he said that the national builder interested in the project has seen the value of its homes increase so much so quickly that they are being snapped up speculatively for rentals. What we end up with is instability for the tenants and the neighborhood, with crime a natural accompaniment-- and other social effects, such as school performance. I'm proposing something different, but I think the key will be to get people interested in living in the development involved from the beginning so that the stakeholders are potential residents, not potential absentee landlords. This requires good design, good quality and support from local government for the neighborhood itself rather than for the developers...
Thanks for the point about eyes on the street, too. It is difficult to balance this need with the need for buffering of homes against the assault of noisy traffic going by, but it's a necessary concern and makes all the difference in one's experience of living in and walking around a neighborhood.


Quijote

 

[Gedunker]

<snip>...how to ensure a preponderance of owner-occupancy rather than speculative purchasing of "affordable" housing by absentee landlords, who churn exploited poor people through their apartments as equity-building cash cows, he actually admitted this is a problem with the project, and that it is a problem he can't solve.... What we end up with is instability for the tenants and the neighborhood, with crime a natural accompaniment-- and other social effects, such as school performance.<snip> Quijote

In Indiana, as I suspect in about every other state, the government cannot regulate ownership versus tenant occupancy (runs afoul of the Fair Housing Act), nor can we regulate affordability (at least outright -- we do it in other ways). It is essential that we create affordable housing and housing alternatives for all people in the community. It is equally essential that, after we provide such housing, we must ensure that the housing is safe, sound and decent. Just my 0.02