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Good Morning,

I have been a real estate appraiser for about 26 years. I have recently joined the Wisconsin Department of Transportation, and am appraising properties for acquisition. The issue of proximity damages is something new to me. Does anyone have a good definition for proximity or proximity damages (as they relate to right of way)?

Any help would be appreciated.

Thanks,

Steve.

The post entitled "Proximity" has been moved to the Valuation Forum by Moderator Theather on 11/15/07.

IN THE SUPREME COURT OF TEXAS
No. 00-0070
Interstate Northborough Partnership, et al., Petitioners
v.
State of Texas, Respondent
On Petition for Review from the
Court of Appeals for the Fourteenth District of Texas
Argued on January 3, 2001


You might find reviewing this case interesting. Proximity damges are a tricky subject and Looking to your states supreeme court records for a decision can sometimes be helpful.

The following link should get you to this case in Texas on the Subject.

http://www.supreme.courts.state.tx.us/h ... 000070.htm

Randall

Steve,

I have been appraising for right of way acquisition for about 10 years. About 8 years in New York and a little over two years in Virginia. Proximity damage is difficult to support in a non-active market, as damage, due to proximity is best supported by market data. I have found over the years that proximity damage is usually greater when a residence is located on a heavily traveled road, then a less traveled road, as well as in a predominantly owner occupied neighborhood. In an active market, developing comparable sales with various front yard setbacks is the best way to support a reasonable figure for proximity damage.

Proximity damage seldom comes into play with a commercial property, unless visibility actually diminishes or parking is lost as a result of a change in proximity. Then you would address the damage under a visibility or parking catagory.

Proximity damage or any other potential damage is best supported by market data, wheather utilizing the sales comparison or income appraoch.

I hope this will help!

Rico
ricksmail@adelphia.net
Office (540) 332-8949

From The Appraisal Dictionary: proximity damage
An element of severance damages that is caused by the remainder's proximity to the improvement being constructed, e.g., a highway; may also arise from proximity to an objectionable characteristic of a site or improvement, e.g., dirt, dust, noise, vibration.

Proximity is another way of saying that a prudent investor would not build the improvement at the locatiion where it is situated in the after condition. As with any other damages, there needs to be evidence from the marketplace that they exist and their amount. And what is perceived as damage in one segment of the market may have no value impact in another segment.

As an example of proximity damage, picture a rural residence located 200 feet back from the road. The new highway right of way now comes within 10 feet of the dwelling. Is there proximity damage, and if so, how much?

If the dwelling does not contribute to H&B use, no damages due to proximity to the improvement. If the dwelling is at the bottom end of the housing market, probably still no damages. If, on the other hand, it is an estate-level dwelling, there may be significant economic impact.

While noise, dust, etc may be a player in proximity damages, they are not the only factor. Market expectations for the property being valued are also a factor. For example, a purchaser of an estate home does not expect to find the property line 10 feet from the dwelling, regardless of the other intrustions.

The goal of the appraiser in a before and after assignment is to let the market define the impact, and then examine the types of damages according to state law. If in fact there is damage due to dust, in Wisconsin it is most likely compensible, in another state, non-compensible.

Glenn

Forgive a naive question, but isn't the damage due to dust, traffic, etc, contained in the values of the after-situation comparables? Isn't including such things in damages double-dipping?

I have recently written an article that will be published in the Right of Way Magazine in March/April issue. Proximity damage can occur when a road is widened and the roadway is within the safe line distance from the property resulting in increase noise, dirt, traffic, vibratin, dust, and diminished privacy. The safe line theory is the point where the residence is not adversely impacted by the roadway. Once the safe line is crossed then it is damaged by proximity. Two Proximity Damage articles in the right of way magazine October 1988 -Residential Proximity Damage Study and January/February 2003- Mity Damage do you draw the line?

Damage is only applied to the residence.

Before SFR $100,000
Less Proximity Damage -$40,000
After value SFR $60,000
Plus After land value $200,000
Whole property after value$260,000

Proximity damage is usually estimate at 0.5% to 2.0% per front yard setback from the road way line.

The University of Idaho has a great research paper on this subject.
They created a model based on over 1,800 properties which can
isolate road proximity as an independent variable.

http://www.webs1.uidaho.edu/niatt/resea ... N05-08.pdf

If anyone knows of any other studies, please post links. Thx!

-Stever