I’m a city planner, and, in the course of dealing with residents, I’ve been told many times that XYZ project will “lower my property values.” These projects have at times been things like asphalt plants and used car lots. They’ve also been quarter acre lot residential subdivisions a mile away from the complainant. And, I swear to God, the other day a guy told me that if his neighbor is allowed to put a porch on the front of his house it will reduce the property values of the neighborhood.
Now, I know that some of this stuff is legitimate, but most of the time I’m sure it’s not. I have a hard time believing that a new subdivision a mile away from your subdivision will have any effect on your property values. But I’m not an appraiser, so I don’t know that for sure. So I’m asking, what kind of things actually can reduce property values? I’m thinking things like having a railroad track behind your house, a smelting plant down the road, a new mall next to your neighborhood, stuff like that. What else can affect property value? What do appraisers look for that would make someone’s property values go down?
Anything that people don’t like will lower the property values. If I don’t like the subdivision going up chances are others won’t like it as well and will be less likely to want to buy there thus driving down property values.
The subdivision could drive property values down by putting more units on the market, lowering the value of older units. This is, however, inevitable. If the planning doesn’t take it into proper consideration, it can also increase traffic, overcrowd neighborhood schools, drop water pressure, etc.
Most of the time, when people say ‘property values’, they aren’t really planning to sell. They really mean ‘the quality of my life’ or ‘but I want things to be exactly the way they were when I bought this house’, but know that saying that won’t get them anywhere.
Persistant graffiti can drive down resale values. So can pot-holed streets and heaving sidewalks. There’s a ‘broken window’ theory that says that the first broken window left unrepaired, or the first pile of litter allowed to become a fixture, is the thin edge of the wedge to neighborhood decay. The theory is that code enforcement that cracks down on the first broken window is the key to maintaining good neighborhoods.
Old guy dying in his house and then being eaten by his cats. (Ne shitteth vous pas. This lowered the property value of the apartments across the street, whose owner then unsuccessfully sued the dead guy’s estate, whose beneficiaries in turn unsuccessfully sued the City for not looking in on the dead guy enough when he was alive, despite the beneficiaries living in the same city.) I guess this is not the sort of thing you can plan for, though, so you are on your own as to how to predict which cats are going to eat which old dead dudes.
As a CCIM I sell real commercial estate for a living, and although your question seems to be asking mostly about residential values the answer (as others noted) is that almost anything can reduce the desirability of a location. Some things are more obvious than others re industrial businesses that create loud noises and high truck traffic (ie most of what I sell ), public nuisance neighbors etc., even the proximity of power lines. In the end it’s a balancing act, and you have to weigh common sense objections vs finely pointed aesthetic ones (ie the porch).
I would strongly suggest you take some some real estate appraisal courses as part of your (personal) professional education. It would be valuable information for you to have, and would look impressive on your resume.
The wrong sort of people moving into the neighborhood. Wrong being defined by local prejudices and attitudes. Often associated with zoning disputes over the construction of religious facilities.
Wouldn’t this issue be something that a person applying for a job as a city planner would be expected to have some familiarity with? Perhaps not as much as a professional appraiser, but certainly more than the average guy on the street – or on a message board.
Not to speak for urban planners (there are a few doper urban/city/municipal planners IIRC) but the job of urban planner really doesn’t focus on being able to make finely parsed determinations as to the merits of value impact arguments, and beyond this other than the really obvious obnoxious stuff, most value impact arguments by property owners are fairly subjective and invariably involve a good deal of NIMBY self interest.
If something is zoned properly for a specific use and has the appropriate municipal services, those uses will be (should be) inherently allowed. I’m assuming thrillhouse15 is talking about situations where variances or special permits need to be obtained or some level of approval is necessary for the project being discussed.
It’s a very fine edge that planners have to walk in these situations in that it’s good to be knowledgeable about the nature of real estate value, but it’s really not the planners job to administrate or “protect” individual real estate values. Imagine if a planner refused a big box retailer a building permit because it will negatively impact the older downtown shopping district. The logical response by the retaler and other interested parties in favor of the project would be “Who the hell are you to micro manage the local economy. If my plans meet construction requirements, give me my permit and shut up!”
Here is a job description for a planner. Nowhere does in mention (overtly) appraisal skills. Having said this IMO you really need to have a decent basic, common sense grasp of real estate valuation concepts if you’re going to be a decent planner.
"Wrong"also being defined by the historic record of how said “undesirables” impact property values, once the influx of these “wrong sort of people” reach a critical mass. Circular reasoning, perhaps, but that’s the history of white flight and no one said mass psychology is particular admirable.
Actually, there’s a cold logic to white flight, or to any similar flight. When the first wave of “wrong people” move in, the departure of an established white family or two creates a stampede mentality–a mass psychology often driven by fear, not hate or prejudice. Yes, the first whites out may be bigots, but they typically also enjoy the highest resell rates. The most tolerant whites, by contrast, stay put and are often rewarded with lower property values, as supply outstrips demand and the flight syndrome stigmatizes the neighborhood. Ultimately, rational self-interest can drive (initial) flight as much as bigotry. Now, what maintains those lowered property values for the LT is something else all together.
BTW, I’m not endorsing or applauding anything. Just pointing to the historic record–a record that applies to more than one population.
What I was really asking, more than anything, is “what does an appraiser look for, outside of the property itself, that determines the value of the property.” I know what kind of things make a property less desirable, and to an extent that lowers the value. But I was looking for things that lower the appraised value. I’ve been told by appraisers that a new subdivision, unless it’s adjacent to the property in question, has no bearing on the property’s value. I was looking for things that actually have a negative impact on a property’s value, from an appraiser’s point of view (I’m not sure if there are any appraisers on the board, but I thought there was a good chance).
Also, as it was pointed out, as a planner, I don’t look too much into the impact a new proposal will have on an existing property’s value as much as I look at the zoning and land use compatibility. To an extent the two things are related, but not to the extent the citizens I referenced in my original post think they are. To many of those people, I’m just a guy whose job it is to make sure their way of life never changes, and they use the term “property value” as a convenient euphemism.
Not always. In a lot of cases, the proposed development has the proper zoning and shouldn’t have any problems getting official approval (short of some political interference, but that’s really a discussion better saved for the Pit). The “subdivision a mile down the road” example I keep referencing was just that. A new subdivision with the zoning already in place, no special variances or permits required. But a few people didn’t like the idea that more people would be living in the same general area as them, so they complained about their property values, with nothing really to back their arguments up (except for some yelling).
The thread in a nutshell - there are far too many variables out there to determine if a NIMBY (multi-family, group home, wireless facility, etc) affects real estate values. What will lower property values are externalities that would make it difficult to sell compared to comps. This may include increased traffic, neighbors from Hell, blocked views of a natural feature that would normally add value to the property, and downward socioeconomic transition which may or may not be related to race. Effects of externalities may be offset by decreased housing supply and increased demand in a booming market.
), public nuisance neighbors etc., even the proximity of power lines. In the end it’s a balancing act, and you have to weigh common sense objections vs finely pointed aesthetic ones (ie the porch).