Property sustainable value versus highest and best use analyzes

Abstract

Sustainable development of all the urban environment elements (including properties) is a very information requiring decision making process that absorbs data from many different fields. Since economic aspects of that kind of development are one the fundaments of the concept, property assessment procedures quite often support sustainable development. The current market value definition interpretation provided by valuation standards of international rage (EVS, IVS) and highest and best use of property (H&BU) have also become widely discussed and troublesome issues. The discussion is vital due to the fact of H&BU consideration in wider context, including sustainable development and sustainable value. The authors in order to improve clarity of the paper proposed a definition of sustainable value. The use of modified methods of sensitivity and scenario combined analysis as a solution enabling sustainable value quantification with the use of H&BU property assessment theory and practice was proposed. The obtained sustainable value coefficient, determined according to proposed methodology, enabled consideration of all the highest and best use tests. Additionally, it enabled consideration of sustainability context. It was described by maximal productivity of property strongly correlated with socioeconomic and socio-cultural phenomena. Highlights 1. The concept of sustainable development involves much more than the "green" issue, thus can create an added value for real estate analysis (especially based on "highest and best use" assumptions). 2. Even though the "highest and best use" notion has been defined its' interpretation causes many ambiguities and problems. 3. "Highest value" is a condition that requires taking into account all the circumstances (physical, legal, financial and productivity) with maximum: return rate/ developed area/increase of build-up area. 4. Maximal productivity in highest and best use context means directly not to give any decreases in sustainable value or/and give possibility to increases the sustainable value in the future. 5. "Sustainable value" can reflect not only economic issues (reflected directly by property value) but can exceed its' meaning to a broader sense including

Profiling the Suitability of Sustainability and Highest Best Use Approach for FELDA Land Development

“…The purpose of sustainable development is to seek the balance among three main components which are economic, social and environment. According to Walacik et al (2020), the concept of sustainable development involves much more than the 'green' issue, thus can create an added value for real estate analysis (especially based on 'highest and best use' assumptions). Previous scholars offered many definitions regarding the term of 'Highest Best Use' (HBU).…”

“…HBU is the use of the most possible and optimal of an asset, which is physically possible, has been adequately considered, legally permitted, legally financially viable, and generates the highest value from the asset (Pratama, 2019). Besides, Walacik et al (2020) claimed that highest value is a condition that requires considering all circumstances (physical, legal, financial and productivity) with maximum return rate / developed area / increase of build-up area. Maximal productivity in HBU context means directly not giving any decreases in sustainable value or / and give possibility to increase the sustainable value in the future (Walacik et al, 2020).…”

“…Besides, Walacik et al (2020) claimed that highest value is a condition that requires considering all circumstances (physical, legal, financial and productivity) with maximum return rate / developed area / increase of build-up area. Maximal productivity in HBU context means directly not giving any decreases in sustainable value or / and give possibility to increase the sustainable value in the future (Walacik et al, 2020).…”

Representative Residential Property Model—Soft Computing Solution

“…It is also a vital ingredient of the urban environment. The measurable indicators such as house price or value are used to design the environment [ 1 ]. Due to social aspects, residents choose a place based on two contradictory criteria: on the one hand, people want safety, familiarity, and the avoidance of nuisance; on the other hand, they want grandeur, excitement, and stimuli at the same time [ 2 ].…”

Reflecting Sustainability in the Analysis of Highest and Best Use: Evidence from Polish Municipalities

“…In the literature on the appraisals of enterprises' assets (Lorenz & Lutzkendorf, 2008;Runde & Thoyre, 2010;Lambourne, 2021) there is already a debate on how to embed sustainability into the highest and best use analysis and how it can be operationalized (Walacik et al, 2020). In municipal real property asset management, a reflection of sustainability in the mentioned analyses has so far received only limited attention among researchers of the subject.…”