Do Zoning Changes Impact Property Value?

[Nathan Gesner]

I already know that a change in zoning can directly impact the value of a property, but I'm looking for more than personal knowledge.

BACKGROUND: I have a client involved in a zoning dispute with Planning and Zoning.The property was approved for commercial use 15 years ago, so the owner built some storage units on part of the land. He wanted to finish developing the property by adding more storage units, but the current Director of P&Z told him the zoning has changed and will only allow him to place "tourist-related" businesses on the property. I have been asked to testify about how a change in zoning devalues the property.

I am seeking cold, hard facts to back up my testimony. I can generate some anecdotal examples, but would really like to see a professional study, existing court case, etc. If you have something, I would appreciate the help!

[Kevin Sobilo]

@Nathan Gesner, I don't think you need to focus on the "zoning change" action as precipitating the change in value.

I would just find comparable parcels in the changed zone that have sold and use those. Basically I would do a market analysis of the property as if it were in that new zone by looking for comps in that zoning and adjusting for the difference. Tbh, if its really that critical to their argument I would just pay an appraiser for a limited scope appraisal which in my area runs about half price because they don't need to visit the property to do it. 

[Luka Milicevic]

@Nathan Gesner

I don't have what you're looking for, but would definitely agree with you. 

In my market of Nashville, zoning changes have massive impacts on value and also immediate impacts too.

Best of luck in your search and I hope you find exactly what you're looking for. 

[Nathan Gesner]

Quote from @Kevin Sobilo:

I plan to find a couple of comparable properties with different zoning to demonstrate how zoning increases/decreases value. I just don't have a big market, so it's tough to find something like this particular property as evidence.

I was thinking of something more general, like a formal study of various markets, but I haven't found anything except general articles or blogs.

[Kevin Sobilo]

Quote from @Nathan Gesner:

Quote from @Kevin Sobilo:

I plan to find a couple of comparable properties with different zoning to demonstrate how zoning increases/decreases value. I just don't have a big market, so it's tough to find something like this particular property as evidence.

I was thinking of something more general, like a formal study of various markets, but I haven't found anything except general articles or blogs.

All real estate is local. So, a specific kind of zoning change in one market might have an opposite impact as the same kind of zoning change in another market or at least a very different change.

If its that hard to find comps, I would probably have them hire an appraiser because they can use less than ideal comps and better adjust for the differences and also have a methodology and rationale for how they chose the comps used and how they adjusted. Plus since its an appraiser's specific area of expertise that adds to the credibility as well.