Highest and Best Use Analysis Flashcards

Which of the four tests of highest and best use addresses whether a use is permitted by zoning, building codes, and private restrictions?

Answer: Legally permissible

The legally permissible test screens uses against zoning, codes, deed restrictions, and other legal limits.

A parcel can legally and physically support a 10-unit apartment building, but construction costs exceed the projected value. Which test does this use fail?

Answer: Financially feasible

A use that costs more than the value it produces fails the financial feasibility test.

Highest and best use analysis is typically performed for both the site as though vacant and the:

Answer: Property as improved

Appraisers analyze highest and best use both as if vacant and as improved.

When the value of a property as improved is less than the land value minus demolition cost, the indicated action is usually to:

Answer: Demolish the existing improvement

If land value net of demolition exceeds improved value, the improvement no longer represents the highest and best use and removal is indicated.

Which factor is part of the physically possible test?

Answer: Soil load-bearing capacity

Size, shape, topography, and soil capacity are physical characteristics affecting what can be built.

Highest and best use must result in the highest:

Answer: Land or property value

The maximally productive use yields the highest land or property value among legally, physically, and financially viable uses.

An interim use is best described as a use that:

Answer: Is temporary until a higher use becomes feasible

An interim use is a temporary highest and best use until conditions allow a more productive future use.