Resources for real estate analysts and valuers: new Lum Library acquisitions and eminent domain resources.
This is a column about all manner of resources for appraisers and real estate market analysts--books, articles, publications, presentations, data, and websites. This edition of Resource Center discusses three books recently acquired by the Lum Library and explores online information sources on eminent domain related matters. (1)
This edition of Resource Center looks at resources to help appraisers become more conversant with architecture, with report writing, and with issues related to eminent domain. These topics are the subject of three newly acquired books for appraisers available in the Appraisal Institute's Y. T. and Louise Lee Lum Library. After discussing the content of the books, we will expand on the issue of eminent domain by taking a look at online resources on that topic.
How Do You Describe That?
In report writing and communication classes, participants often ask about examples of the right or correct or best way to present the subject information, appraisal problem, research, valuation approaches, conclusions, and recommendations. Appraisers, in fact, have broad leeway in presenting their written appraisal report. This next new book in the Lum Library offers some interesting writing examples of various sections of appraisal reports, covering many elements and issues found in the reports.
Real Estate Appraisal Practice: A Collection of Examples
By Jeffrey A. Johnson and Tony Lesicka (Minnesota: Appraisal Practice Education, LLC, 2013) 461 pages
As the title implies, Real Estate Appraisal Practice: A Collection of Examples is an assemblage of parts of actual appraisal reports. The purpose of this text is to enable readers to see how different appraisers have written various sections of appraisal reports and have handled assorted appraisal problems. Over 130 examples of parts of different appraisal reports are included. The basic format for discussion for each example is first, an explanation of the particular appraisal problem; second, presentation of the quoted material from the submitted appraisal report section covering the problem; and third, the book authors' review comments about the quoted material from the appraisal report.
Topics in the twenty-seven chapters of examples include, but certainly are not limited to, the following:
* Extraordinary assumptions/hypothetical conditions
* Certification/identification of the appraisal problem
* Scope of work
* Identification of subject
* Land description
* Improvements description
* Tax/assessment data
* Marketability study
* Highest and best use of land as though vacant
* Highest and best use of property as improved
* Land valuation
* Cost approach
* Sales comparison approach
* Income capitalization approach
* Estimate of exposure time
* Net realizable or "go dark" value
* Net liquidation value
* Insurable value
As an appraiser, you may sometimes sit down to write a report, and when you come to a particular appraisal problem and challenge find yourself at a loss for words. Or maybe you find your writing coming out rather awkward in explaining something out of the ordinary. Or maybe you just want to change the way you've been explaining something for a long time. This book can give you some ideas on how to rework your report writing. You might not agree entirely with the wording in an example, but you can still use the example to help stimulate your report writing and thinking about various situations, conditions, problems, and challenges. However, beware of plagiarism--always use your own words--and avoid using language that is not appropriate for the particular assignment you are writing about.
What Style Is That?
The first new book in the Lum Library is about the architectural styles you will find in American homes in various parts of the country.
A Field Guide to American Houses, 2nd ed.
By Virginia Savage McAlester (New York: Alfred A. Knopf [C]1984, 2015; Second printing Dec. 2014) 848 pages
Appraising houses includes describing the architectural style or fashion, and often the shape and anatomy, of the houses as well as the homes in the neighborhood. Appraisers should be able to identify the architectural style of a house and its various components, which may not match. A Field Guide to American Houses, second edition, is a practical, helpful, and downright interesting book that will help appraisers to describe subject properties and to identify comparable properties.
The second edition of A Field Guide to American Houses is even more complete than the first, with expanded content, photos, exhibits, and aids for the reader. This hefty book is about architectural styles of homes popular in the United States from earliest colonial times to the present, with ever-changing technology, materials, and influences. Even though about 80% of homes today have been built since 1940, it's important to know the names of styles from earlier eras because some of them have been incorporated into the homes built in the last seventy years.
This book is designed with the user in mind. It's big and extensive, yet practical and useable. It even provides helpful advice on how to analyze a home in the "How to Use This Book" section.
Confronted with an unfamiliar house to be identified ... file reader may approach the problem three different ways. The simplest is to thumb through the any pages of house photographs, looking for examples similar to the unidentified house.... A second and more systematic approach is to turn to the Pictorial Key and Glossary ... this illustrates a variety of different types of such common architectural features a windows, doors, and roofing materials, with a listing of the styles in which each type commonly occurs.... A final approach is to become familiar with the few historical precedents on which American house styles are based. These are reviewed in the introductory chapter on Style.
The pictorial key provides clear, concise drawings of basic forms of architectural components with examples of forms and key shapes for various types of roofs, dormers and roof elaborations; chimneys; railings; porches and supports; windows; doors; exterior walls; foundation; decorative elements; house shapes, and so on. There are countless pictures throughout the volume.
The chapters are basically arranged in the chronological order in which styles and house types have arrived on the scene. Beginning with the chapter "Folk Houses," the chapters proceed as follows:
* "Colonial Houses" (1600-1820)--Post-medieval English, Dutch, French, Spanish Colonial, Georgian, Federal, and Early Classical Revival
* "Romantic Houses" (1820-1880)--Greek and Gothic Revival, Italianate, Exotic Revivals, Octagon
* "Victorian Houses" (1860-1900)--Second Empire, Stick, Queen Anne, Shingle, Richardsonian Romanesque, Folk Victorian
* "Eclectic Houses" (1890-1940)--Colonial Revival, Neoclassical, Tudor, French Period, Chateausque, Beaux Arts, French Eclectic, Italian Renaissance, Mission, Spanish Revival, Monterey, Pueblo Revival
* "Modern Houses" (1900--present)--Prairie, Craftsman, Modernistic, Bankers Modern, Minimal Traditional, Ranch, Split-level, Mainstream modern, international, Contemporary, Shed, Other 20th Century Modern, 21st Century Modern, Mansard, Ranch, Millennium Mansion, New Traditional, American Vernacular
This book also includes an appendix, with information on approaches to construction and reference materials.
What's the Latest on Eminent Domain?
The field of eminent domain, and appraisal practice in it, is dynamic and subject to relatively frequent changes in law, agency policy and practice, and court rulings. Many appraisers find appraising for eminent domain purposes an interesting specialty for all or part of their practice. Keeping current is important however. If you are looking into eminent domain valuation, or already involved in it, the below will direct you to some relevant helpful information resources. First, we'll look at a book on this topic, Principles of Right of Way, fourth edition.
Principles of Right of Way, 4th ed.
(Gardenia, CA: International Right of Way Association 2012) 415 pages
The Lum Library has recently added to its collection the textbook Principles of Right of Way, fourth edition. This is the current edition of the basic textbook of the International Right of Way Association (IRWA). Eminent domain actions often are related to right of way issues, so if your appraisal practice involves eminent domain, you will want to take a look at this book. Also, appraisers who specialize in right of way assignments to any significant degree would benefit from having this book within their reach; appraisers who only occasionally have right of way assignments, or who want to do more in the right of way field, also would benefit from this publication.
As a basic text, this volume provides a good overview of the field of eminent domain with broad coverage of real estate fundamentals, valuation concepts, and particularly acquisition negotiations, valuation, and asset management. This text has a valuable sixty-nine page glossary of right of way associated terms used in the United States, and a separate thirty-two page glossary for the Canadian user. There is also a respectable bibliography.
This text is consistently well written, clear, and concise. The individual chapters are written by experts in the particular topic area, so the book is a collection of experts' teaching, ideas, and some opinion. Table 1 shows what is covered in each chapter. Appraisers getting into right of way appraising will find of particular interest chapters 5, 6, 7, 10, and 11.
General Information Resources on Eminent Domain
If you want to learn more about eminent domain, there also are many online resources available to you. For the best search results, it is important to be familiar with the terminology related to eminent domain.
The US Constitution's Fifth Amendment is the foundation of eminent domain policies and procedures in the United States. Eminent domain law flows from the Fifth Amendment's simple, straightforward statement: "Nor shall private property be taken for public use, without just compensation." It is this "takings clause" that limits the governmental power of eminent domain and requires compensation for what is taken. (2) The concept and the right of government to take private property goes by different names. For example, resources may refer to it as expropriation, appropriation, or involuntary conversion (a term used by the federal government and Internal Revenue Service). The process or the act of taking by government is often called condemnation. Be sure to search for these various terms when conducting your eminent domain research. (3)
A good general Internet search engine will provide some interesting reading on condemnation or eminent domain. As with most searches, always try more than one search engine and try more than one search term. In your search engine, just enter a search for any of the following related terms:
* across the fence value
* corridor valuation
* corridor value easement abuse
* eminent domain abuse
* eminent domain and public good
* eminent domain and public welfare
* eminent domain cases (or laws)
* eminent domain damages
* eminent domain examples
* Fifth Amendment
* just compensation
* partial taking
* public use
For a basic summary of the elements of eminent domain, you may want visit the ExpertLaw website and read the "Eminent Domain" (www.expertlaw .com/library/real_estate/eminent_domain.html). This excellent article addresses the process involved in a taking, types of takings (complete, partial, temporary, easements and rights of way), value definitions, just compensation, and other key points. Wikipedia also has a good summary article on the topic, with a list of resources and links to significant court cases (https://en.wikipedia.org /wiki/Eminent_domain). In addition to the United States, the Wikipedia article has a brief overview of, and links related to, eminent domain in France, England, Wales, Germany, Italy, Australia, Chile, India, Pakistan, Philippines, and other counties
Another good place to look for an overview on eminent domain is the American Bar Association website (www.americanbar.org/aba.html). Here you will find many eminent domain articles and references. Just enter "eminent domain" in the search box on the home page and you will find a plethora of articles, reports, papers, and books on eminent domain issues and court decisions. Among the treasures you'll find are "A Primer in Eminent Domain and Takings Law under the US Constitution," "Valuing Real Property in Eminent Domain," "Municipal Eminent Domain and Utilities," "An Indecent Proposal? Using Eminent Domain to Seize Mortgage Loans," "Effect of Eminent Domain on Foreclosure Sale," and "Trade Fixtures in Condemnation," to name just a few.
Newspaper archives also can be a good general resource of information on eminent domain issues, both local and national. For example, a search of the New York Times's website will provide chronological coverage (http://goo.gl/k4jEek or http://topics .nytimes.com/top/reference/timestopics/subjects/e /eminent_domain/index.html) of past articles on eminent domain events, rulings, and trends (such as use of eminent domain to fight blight and to seize underwater mortgages). A Chicago Tribune (www.chicagotribune.com) search will also produce rich results. Similar extensive results can be found when searching the LA Times, St. Louis Post Dispatch, San Francisco Chronicle, Denver Post, Dallas News, and other major city newspapers. Beyond your local and regional newspapers, also search USA Today, and the Wall Street Journal. Major broadcast news networks also are worthy of a search--check out CNN, ABC, CBS, NBC, PBS, NPR, and FOX News.
Information Resources for Eminent Domain Laws and Regulations
Laws related to eminent domain vary depending on the location and the entity involved in the taking. A mix of court decisions, legislation, and regulations come into play. Fortunately, there are many resources to keep you informed. (4)
For background information and a summary of early cases that laid the foundation for eminent domain at the federal level, consult the US Department of Justice's summary "History of the Federal Use of Eminent Domain" (http://goo.gl/cW05M8 or www .justice.gov/enrd/history-federal-use-eminent -domain). For additional foundational information, with thoroughly footnoted sources, take a look at FindLaw's summary "National Eminent Domain Power" (http://goo.gl/qk4hlM or http://constitution .findlaw.com/amendment5/annotationl4.html). This excellent summary will help your understanding of what's behind some of the debate today involving eminent domain abuse and just what is "public use."
Aspects of just compensation and public use have been, and continue to be, matters of considerable debate. For example, cases reported in The Appraisal Journal's "Cases in Brief" section often touch on the issue of what is just compensation. The issue of public use has become more hotly debated since the 2005 US Supreme Court decision in Kelt) v. City of New London, which involved a taking of private property by a public government entity for the purpose of redevelopment by private developers. An Internet search for eminent domain abuse will give you a sense of the controversies in eminent domain actions.
Certainly, the Supreme Court decision in Kelo is one of the most significant developments in eminent domain in the past ten years. In the wake of this decision, many states as well as the federal government took action to protect private property from public takings on behalf of private parties. The Appraisal Journal and Valuation have reported on these actions; to read these articles, visit the Appraisal Institute's Lum Library homepage and enter the term "Kelo" in the search box.
For the latest legal developments on eminent domain, check out the "California Eminent Domain Report," which includes analysis of eminent domain issues beyond just California. Especially look through the "Topics" section located in the right column of this frequently updated site (http://goo.gl/dfv2XH or www.californiaeminentdomainreport.com/). Note especially the sections on "Court Decisions," "Inverse Condemnation and Regulatory Takings," "Redevelopment," "Right to Take," and" Valuation." You also can do a key word search on this website; for example, entering the term "Kelo" in the search box will produce articles on the fallout from this key court decision.
For local laws, regulations, and administrative rulings on eminent domain, check your state legislative government site. State laws can easily be found using the FindLaw website (http://statelaws .findlaw.com)--just pick the state of your choice. On the FindLaw website you also can browse state laws by topic by entering "eminent domain" in the search box. Another website, USLegal, offers a summary on eminent domain along with a list of links to state eminent domain laws (http://eminentdomain .uslegal.com/). Note, you will also want to go to your state's administrative code online and do a similar keyword search. Finally, the National Conference of State Legislatures has a good summary of the Kelo decision with options to drill down to specific state actions post-Kelo (http://www.ncsl.org/research /environment-and-natural-resources/eminent -domain-overview.aspx).
You will also find information on eminent domain on state departments of transportation websites. The US Federal Highway Administration website provides a list of state departments of transportation with five links (www.fhwa.dot.gov /webstate.cfm). In addition, the Iowa Department of Transportation website has a very helpful chart with links to departments of transportation and right of way information in all fifty states (http://goo.gl/06zS2F or www.iowadot.gov/rightofway/text_based.html).
Federal Agency Eminent Domain Information
If you deal with federal agencies you will need to be familiar with the Uniform Appraisal Standards for Federal Land Acquisitions, or the "Yellow Book," with its principles related to appraisal of federal land acquisitions. These principles apply whether the acquisition is by voluntary means or condemnation. The Yellow Book is available as a downloadable PDF on the US Department of Justice website (http://goo.gl /NCimUp or www.justice.gov/sites/default/files/enrd /legacy/2010/11/ 16/Uniform-Appraisal-Standards.pdf).
The Federal Highway Administration (FHWA) is frequently involved in eminent domain and taking actions, and on the FHWA website you can find specific information on its compensation programs (www.fhwa.dot.gov/real_estate/) and its acquisition policies (www.fhwa.dot.gov/real_estate/uniform _act/acquisition/real_property.cfm).
You will also find information on FHWA's Realty Competency Building (RCB) program. The program's online database includes information and links to resources for professionals "necessary to gain the knowledge and skills that will build to their professional capacity." The database's RCB Navigator search engine (www.fhwa.dot.gov/real _estate/rcb_navigator/) directs the search based on the profession (e.g., appraiser, attorney, developer, planner) and the type of information desired, such as training and web-based learning, publications, legislation, guidance, and research. Depending on the information you are looking for, RCB Navigator may tailor the search results to your level of expertise (e.g., general interest or technical proficiency).
Under the publications section of FHWA's website (www.fhwa.dot.gov/real_estate/publications/), you will see information and reports on acquisitions, alternative uses of highway right of way, appraisal review, appraisal scope of work, the fixed residential move cost schedule, outdoor advertising, the Transportation Equity Act, the Uniform Relocation Assistance and Real Property Acquisition Policies Act (Uniform Act), Uniform Act Frequently Asked Questions, the Uniform Act Final Rule, and the Real Estate Acquisition Guide.
The FHWA also offers a number of resources specifically related to the Uniform Act:
* Content of the act and its related regulations (www.fhwa.dot.gov/real_estate/uniform_act /legs_regs/)
* Guidance on the act and rules (www.fhwa.dot.gov /real_estate/uniform_act/policy_and_guidance/)
* Guide on property valuation (www.fhwa.dot.gov /real_estate/uniform_act/property_valuation/)
* Guide on preparing a scope of work (www.fhwa .dot.gov/real_estate/uniform_act/property _valuation/sow4.cfm)
You also may want to check out the FHWA's Office of Real Estate Services newsletter, which reports on current and past developments in various states and regions (www.fhwa.dot.gov/real_estate/newsletter.cfm).
Johnson, Jeffrey A., and Stephen J. Matonis. Applications in Litigation Valuation: A Pragmatist's Guide. Chicago: Appraisal Institute, 2012. Available in Lum Library and for purchase from the Appraisal Institute.
Eaton, J. D. Real Estate Valuation in Litigation, second edition. Chicago: Appraisal Institute, 1995. Available in Lum Library and for purchase from the Appraisal Institute.
(1.) For easy direct access to the URL addresses noted throughout this article, read this column online; go to http://www.myappraisalinstitute.org/taj /default.aspx, and click "View Current Issue." (Log-in required.)
(2.) Governments may also condemn personal property Including Intangible property such as contract rights, patents, trade secrets, and copyrights. See "Eminent Domain," Wikipedia, https://goo.gl/Oc3m9v or https://en.wikipedia.Org/wiki/Eminent_domain#Condemnation.
(3.) International terminology also varies; eminent domain may be referred to as compulsory purchase (United Kingdom, Ireland, New Zealand), resumption (Hong Kong; Australia), compulsory acquisition (Australia), or expropriation (South Africa, Canada).
(4.) In addition to the websites described here, you may want to take a look at the legal resources described in the Summer 2015 edition of "Resource Center." The Appraisal Journal (Summer 2015): 242-243.
(5.) Kelo v. City of New London 545 U.S. 469 (2005); copy of opinion available at http://caselaw.findlaw.com/us- supreme-court/545/469.html.
Dan Swango, PhD, MAI, SRA, is president of Swango Real Estate Counseling and Valuation International in Tucson, Arizona. He is experienced in valuation and consulting involving equity investment, debt security, risk reduction, profit optimization, estate planning and settlement, buy/sell opportunities, and eminent domain. Swango is an instructor and communicator with domestic and international experience. He is namesake of The Appraisal Journal's Swango Award, past Editorial Board chair and editor-in-chief of The Appraisal Journal, and a current member of the Journal's Review Panel.
Table 1 Content of Principles of Right of Way, 4th ed. Chapter Topic Sample contents 1. Acquisition of Introduction and historical perspective Property for Public Use 2. Real Estate Real estate basic concepts; market Fundamentals characteristics; real estate economics; valuation principles 3. Legal Aspects Key definitions of a legal nature; of Real Estate characteristics of various types of estates, leases, easements, other rights; types of ownership; adverse possession, encumbrances and liens; effects of recording statutes 4. Contracts Elements of a contract; contract assignments; remedies for breach of contract; statutes of limitations; parole evidence rule; rules for contract interpretation; Uniform Commercial Code 5. Eminent Domain Definitions, origin, and history of Theory eminent domain; condemnation authority; basic elements; federal before and after rule; state summation method; other losses and benefits; legislative actions 6. Environmental Environmental definitions; history; Considerations processes in eminent domain; National Environmental Policy Act (NEPA); other major US environmental laws and executive orders, and agency directives; Canadian Environmental Protection Act (CEPA); environmental risk management; site assessment process 7. Interpreting Development and use; the Engineering three-view-concept; plan development; the Plans plan view; the profile view; utility alignment maps; highway construction plans; other plan components; highway right of way plan; centerline survey plan or layout map; aerial photography 8. Property Basics, types of property descriptions; Descriptions public land survey system and characteristics; state and provincial plane coordinate systems; metes and bounds; point, centerline and reference descriptions; metric conversions; surveyor's measures 9. Planning and Basis of land use regulations, planning Zoning and economics; basic plan studies and implementation; regulations and controls 10. The Appraiser The appraisal problem and process; and the determination of the scope of work; Valuation property and market analysis; data Process collection; values needed; cost methods; reconciliation; appraisal reporting 11. The Appraisal Basic terminology; the larger parcel; of Partial value allocations; rights to be acquired; Acquisitions value of the part taken; effects of taking on remainder; remainder parcels; damages and benefits; unique right of way considerations; appraisal reports; methods to report value components in the appraisal report; the federal (before and after) rule and the state (summation) method 12. Skills and Introduction to negotiation; negotiator Attitude for attitudes; communication skills needed; Successful suggestions for working with property Negotiation owner 13. Negotiation Negotiation defined; styles of with Property negotiation; characteristics of Owners integrative and bargaining negotiation; power and the acquisition process; effective psychological basis; developing trust; problem solving useful concepts; challenges in negotiation strategy; administrative settlements; willingness to use the court 14. Asset Asset management in public realm Management of particularly; asset management plan Public and goals; key elements of asset management Quasi-Public plan and tools; policies and procedures; Property property inventory and management activities; surplus asset sale; secondary and multiple-use license and lease; real property leasing; lease components
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|Title Annotation:||RESOURCE CENTER|
|Author:||Swango, Dan L.|
|Date:||Sep 22, 2015|
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