Site Analysis: Land Characteristics and Regulations

Site Analysis: Land Characteristics and Regulations

This chapter explores the critical aspects of site analysis, focusing on land characteristics and relevant regulations. Understanding these factors is paramount in property valuation as they directly influence a property’s utility, desirability, and ultimately, its value. We will delve into the scientific principles underpinning these characteristics and regulations, providing a framework for informed decision-making in property valuation.

1. Physical Characteristics of Land

The physical characteristics of land exert a significant influence on its value and potential use. These characteristics dictate the suitability of the site for various purposes and influence the cost and complexity of development. An appraiser must meticulously describe and interpret these characteristics, considering their interaction with improvements and neighboring properties.

1.1 Size and Shape

The size and shape of a land parcel are fundamental attributes affecting its utility.

• Dimensions: This includes street frontage, width, and depth. These dimensions are usually expressed in feet and tenths of feet for ease of calculation.
• Area: The size of a parcel is typically measured in acres for large tracts or square feet for smaller parcels. Conversions: 1 acre = 43,560 square feet.
• Frontage: The length of the property bordering a street, lake, river, or other significant feature.

The impact of size and shape varies depending on the intended use. An irregularly shaped parcel might be suitable for residential development but not for commercial or industrial applications. A triangular lot, for instance, may have limited utility compared to a rectangular lot of similar area.

Mathematical Considerations:

• Area of a rectangle: A = L * W, where A is area, L is length, and W is width.
• Area of a triangle: A = 0.5 * B * H, where A is area, B is base, and H is height.

Example:

Consider two lots, one rectangular (100 ft x 100 ft) and one triangular (base 100 ft, height 200 ft). Both have an area of 10,000 sq ft, but their utility might differ based on zoning setbacks or construction requirements.

Practical Application:

Analyze comparable sales of lots of varying sizes and shapes within the subject’s neighborhood to observe how these factors influence pricing. A regression analysis could reveal the correlation between lot size and property value.
Value = β₀ + β₁ * LotSize + ε , where β₀ is the intercept, β₁ is the coefficient for LotSize and ε is the error term.

1.2 Corner Influence

Corner properties offer frontage on two or more streets, potentially affecting their value positively or negatively.

• Advantages: Easier access, higher visibility, increased flexibility in building design.
• Disadvantages: Loss of privacy, increased traffic noise, higher costs for sidewalk maintenance, stricter setback requirements.

The favorability of a corner location depends on the intended use.

• Commercial: Corner locations at intersections of major thoroughfares are highly desirable for businesses like gas stations or drug stores due to increased exposure.
• Residential: Interior lots, particularly on cul-de-sacs, may be more desirable due to reduced traffic and increased privacy.

Experiment:

Conduct a survey of local residents and business owners to gauge their perceptions of corner locations. Analyze sales data to compare the values of corner lots with interior lots, controlling for other factors like size and improvements.

1.3 Plottage Potential

Plottage refers to the increase in value that occurs when two or more adjacent sites are combined to create a larger site with greater utility. This potential arises when the combined unit value is higher than the sum of the individual parcels’ values.

• Mechanism: Combining smaller lots can enable uses that are not feasible on individual parcels, leading to higher returns.
• Example: In an industrial park with predominantly half-acre lots, assembling two lots into a one-acre parcel might attract businesses requiring larger sites, thereby increasing the value per square foot.

Mathematical representation of Plottage:
Vt > (V1 + V2 + … + Vn), where Vt is the total value of the combined lot, and V1 through Vn are the individual values of the uncombined lots.

However, plottage can also result in a decrease in value per square foot if assemblage yields a lower value per square foot in the marketplace due to negative economies of scale.

Practical Consideration: Developers often need to pay a premium to combine adjacent properties.

1.4 Excess Land and Surplus Land

Distinguishing between excess land and surplus land is critical in site analysis.
* Excess Land: Land that is not needed to support the existing or planned improvements, can be sold separately, and has an independent highest and best use.
* Surplus Land: Land that is not needed to support the existing or planned improvements, cannot be sold separately, and does not have an independent highest and best use.

The key difference lies in the separability and independent utility of the land.

Example

• Excess Land: A residential property with two standard lots when only one is needed for the house, where the second lot can be sold separately and developed.
• Surplus Land: A large industrial site where the excess land at the back lacks street access and cannot be sold separately. It might still contribute to the property value through potential expansion or storage.

Valuation Implications:

Excess land needs to be valued separately, considering the cost of legal separation. Appraisers must avoid simply adding the value of excess land to the value of the primary property. The sum of the parts might not equal the whole.

1.5 Topography

Topography refers to the land’s contour, grading, natural drainage, geological features, and overall physical usefulness. These characteristics influence site development costs and suitability.

• Steep Slopes: Impede construction and increase development costs.
• Natural Drainage: Can be advantageous, but sites downstream or serving as drainage basins may have limited utility.
• Upland vs. Lowland: Upland areas typically support more intensive uses than low-lying, poorly drained areas.

Data Sources:

Topographic maps from the U.S. Geological Survey (USGS) provide detailed information on land elevations, rivers, roads, and other features. These maps are referred to as quadrangles or quads.

Practical Application:

Use contour lines on topographic maps to assess the slope of a site. Calculate the slope using the formula:

Slope = (Vertical Distance / Horizontal Distance) * 100%

1.6 Geology and Soil Analysis

Geological conditions and soil composition are vital considerations for both improved properties and agricultural land.

• Soil Suitability: Important for building foundations, septic systems, and the construction of large structures. Special pilings or floating foundations may be required for certain soil types, impacting development costs.
• Agricultural Qualities: Agronomists and soil scientists assess soil fertility and suitability for specific crops.
• Engineering Properties: Engineers test soil consistency and load-bearing capacity.

Data Collection:

• Soil surveys from the U.S. Department of Agriculture (USDA) provide detailed soil maps.
• Geotechnical investigations determine soil properties and bearing capacity.

Illustration:

The Soil Triangle illustrates the proportions of sand, silt, and clay in different soil types. (Refer to Figure 12.5 in the PDF).

Soil Profile analysis
Describes soil horizons as shown in Figure 12.6 in the PDF.

1.7 Floodplain and Wetlands Analysis

Proximity to flood zones and wetlands can significantly affect property value and development potential.

• Floodplains: Areas susceptible to flooding, often regulated by the Federal Emergency Management Agency (FEMA).
• Wetlands: Areas saturated with water, typically supporting specific vegetation and subject to environmental regulations.

Data Sources:

• Flood Insurance Rate Maps (FIRMs) from FEMA indicate flood zones.
• Wetland maps from environmental agencies identify wetland areas.

2. Regulations Affecting Land Use

Land use regulations are established by local, regional, and federal authorities to control the development and utilization of land. These regulations are not typically listed in recorded property titles, so direct verification from controlling agencies is essential.

2.1 Zoning Regulations

Zoning regulations dictate permitted land uses, building height, setbacks, lot coverage, and other development standards within specific zones or districts. Understanding these regulations is paramount for determining the highest and best use of a property.
Compliance with zoning regulations is paramount when determining the highest and best use of a property.

2.2 Assessment and Tax Information

Real property taxes are typically based on ad valorem assessments (according to value). These assessments are influenced by market conditions and statistical methodology. Assessors will often equalize taxes to achieve parity among assessment levels in a given district. Although assessed values may not perfectly reflect market value, they can be informative, and tax rates can highlight future trends.