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Real Estate Economics: Chapter 8 Neighborhoods: Clusters of Land Use and Value

Terms in this set (3)

The Neighborhood as the Basis of Value
How neighborhoods make a bridge between these community land-use patterns and the value of individual parcels.
What is a Neighborhood?
A neighborhood is a cluster of properties of relatively similar land use and value.

Neighborhoods frequently have occupants with similar characteristics.

In residential areas, occupants may have somewhat similar income levels, education, and status.

Neighborhoods exist because topography, transportation, and social and political influences have different effects on each type of land use.

Similar uses will be influenced in similar ways and will tend to cluster together.

Land uses can conflict,such as airport locating in a residential neighborhood.

This potential problem is usually addressed by zoning ordinances, which restrict land uses in a zone to a few narrow categories.

Variances are granted only when applicants show that the proposed use is not injurious to the existing uses allowed in that zoning category.

Similar controls can be achieved by the use of private deed restrictions.
Neighborhood, Location, and Property Values
There's an old saying that there are 3-factors that determine the value of a property --

"Location, Location, Location!"

This saying emphasizes that real estate has a fixed location, which means the value of any individual parcel is determined by, and can't escape, the features or forces that surround it.
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