Can I determine the value of a lot if a zoning change is made ?
Hello,
I have a decent sized 10,550 sq ft. lot with an (1930) old/small 1br house on it. Most of the value of the lot is in the land or potential. Its zoned RM-6, so only one multifamily dwelling unit can be placed every 6,000 square feet. So effectively one unit or less than Residential zoning would allow. Because of SB-9 in CA you can split residential lots and put a duplex on each, plus an ADU ( I believe). Multifamily should be increasing density not decreasing it from residential zoning.
I am interested in figuring out if trying to change the zoning will bring more value. I believe it takes a long time and have heard 15K application fee for a zoning change.
If zoning was changed to say RM-3, that would allow probably 3 multifamily units, depending on setbacks. How can I determine with more certainty what the land would be worth in this scenario ?
Can an appraiser figure this out ?
Land use planners usually tell me they don't calculate value but they can help with the zoning change and potential for it.
Side note: The land used to be zoned commercial and was changed I believe in the 90's sometime. It would be a good commercial location because the land is on a busy street near other businesses.
Who could tell me how much the lot would be worth if zoning was changes to commercial ?
#1 All Forums Contributor
- Investor
- Virginia
@Steve Hungerford
Talk to a real estate broker to give you an idea what it’s worth
Quote from @Chris Seveney:
@Steve Hungerford
Talk to a real estate broker to give you an idea what it’s worth
I have a broker and talked to him. Brokers can't/won't do these calculations. They don'r have the interest and/or expertise to do this. Possibly a commercial broker but the only value what it is currently zoned for. Plus its too small for them to spend much time on.
I would possibly start by contacting the municipal zoning administrator or staff. Ask them about the re-zoning process. You can find out from them the process, the fees, and whether what you want to do is feasible. Another possible starting point is talking to your real estate attorney. An attorney should be able to help you know what to say and what to ask before you talk to the zoning people.
For valuation, you are talking about value based on a development. So that highly depends on who the intended buyer/user is. For example if you are aiming for multifamily, it might be helpful to get some drawings. Then you can quote costs for drawings. You can present that to lenders for the financing piece. Another approach that works is comparing nearby properties. An appraiser should be able to give you a current appraisal. They should also be able to give a valuation estimate using the new zoning classification. They would carry out the same appraisal procedure, except they would use the new zoning for comparable property and so forth. You could also ask the city tax assessor how they would assess value with new zoning classification. In any case all you can do is estimate I believe. I hope this works out for you.
Quote from @Ryan Seib:
I would possibly start by contacting the municipal zoning administrator or staff. Ask them about the re-zoning process. You can find out from them the process, the fees, and whether what you want to do is feasible. Another possible starting point is talking to your real estate attorney. An attorney should be able to help you know what to say and what to ask before you talk to the zoning people.
For valuation, you are talking about value based on a development. So that highly depends on who the intended buyer/user is. For example if you are aiming for multifamily, it might be helpful to get some drawings. Then you can quote costs for drawings. You can present that to lenders for the financing piece. Another approach that works is comparing nearby properties. An appraiser should be able to give you a current appraisal. They should also be able to give a valuation estimate using the new zoning classification. They would carry out the same appraisal procedure, except they would use the new zoning for comparable property and so forth. You could also ask the city tax assessor how they would assess value with new zoning classification. In any case all you can do is estimate I believe. I hope this works out for you.
Thanks for the response! I did find out the process and costs, I believe its a 15K application fee. You lose that money even if they don't approve the zoning. Its crazy to me. The counties have too much power. I did talk to an attorney, basically he told me the same thing as the county did, sounded very un interested. I talked to another attorney, they told me they can't help as they do work for the county, therefore a conflict of interest.
The problem with getting drawings up front is that is very expensive. If a person can determine it brings enough value, then investing in the drawings makes sense. As far as comparables, there are too few to go by. You would have to go really far back in time. This is a unique area of the county and vacant lots of this size or close to it are rare and then add the unique zoning of Residential multifamily.
I am hesitant to spend the 15K rezoning fee because it may not get approved and I don't know the increase or not in value. The better zoning couldn't hurt. The thing again is the county needs more housing and residential multifamily is intended to accomplish that. However the county has zoning that is not fully utilizing the lot and actually makes the ability to add housing harder under RM than if it was residential zoning (because of SB-9). Its crazy as they would make more in revenue and accomplish the goals of more housing by changing the RM-6 to say a RM-3. They stubbornly say no and I guess want to collect their 15K in rezoning fees to even consider it. There should be a law that says Residential Multifamily can't be more restrictive regarding density than Residential zoning. I know that as far as ADU's that is the case. Maybe there is a law like this, not sure.
Quote from @Steve Hungerford:
Quote from @Ryan Seib:
I would possibly start by contacting the municipal zoning administrator or staff. Ask them about the re-zoning process. You can find out from them the process, the fees, and whether what you want to do is feasible. Another possible starting point is talking to your real estate attorney. An attorney should be able to help you know what to say and what to ask before you talk to the zoning people.
For valuation, you are talking about value based on a development. So that highly depends on who the intended buyer/user is. For example if you are aiming for multifamily, it might be helpful to get some drawings. Then you can quote costs for drawings. You can present that to lenders for the financing piece. Another approach that works is comparing nearby properties. An appraiser should be able to give you a current appraisal. They should also be able to give a valuation estimate using the new zoning classification. They would carry out the same appraisal procedure, except they would use the new zoning for comparable property and so forth. You could also ask the city tax assessor how they would assess value with new zoning classification. In any case all you can do is estimate I believe. I hope this works out for you.
Thanks for the response! I did find out the process and costs, I believe its a 15K application fee. You lose that money even if they don't approve the zoning. Its crazy to me. The counties have too much power. I did talk to an attorney, basically he told me the same thing as the county did, sounded very un interested. I talked to another attorney, they told me they can't help as they do work for the county, therefore a conflict of interest.
The problem with getting drawings up front is that is very expensive. If a person can determine it brings enough value, then investing in the drawings makes sense. As far as comparables, there are too few to go by. You would have to go really far back in time. This is a unique area of the county and vacant lots of this size or close to it are rare and then add the unique zoning of Residential multifamily.
I am hesitant to spend the 15K rezoning fee because it may not get approved and I don't know the increase or not in value. The better zoning couldn't hurt. The thing again is the county needs more housing and residential multifamily is intended to accomplish that. However the county has zoning that is not fully utilizing the lot and actually makes the ability to add housing harder under RM than if it was residential zoning (because of SB-9). Its crazy as they would make more in revenue and accomplish the goals of more housing by changing the RM-6 to say a RM-3. They stubbornly say no and I guess want to collect their 15K in rezoning fees to even consider it. There should be a law that says Residential Multifamily can't be more restrictive regarding density than Residential zoning. I know that as far as ADU's that is the case. Maybe there is a law like this, not sure.
That sounds like an excessive zoning fee. Often those fees are statutory. I would want to inquire what that fee is made up of, who it is paid to and so on. Wow, though.
That sounds like an excessive zoning fee. Often those fees are statutory. I would want to inquire what that fee is made up of, who it is paid to and so on. Wow, though.
I will inquire. I actually heard 20K before so it might even be higher than I stated. No wonder so many people are leaving CA. Governments out of control taking away homeowner rights. In my humble opinion.