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March 19, 2009
How much is land worth?
There is an empty plot of land 20x60 next to a house I am considering. It is zoned for a shed or a pool (?). How would you approach the owner to purchase it, and how would you value it? The idea would be to join it with the lot next to it, not to build or add FAR, but to extend the garden.
Comments
A similar lot, though larger 20x 100 sold near us western CHN) for about 700,000 US
Posted by: crownheights2007 at March 19, 2009 11:04 AM
While it's not your intention to use the lot to facilitate adding square footing to your house because of the increased FAR, that is, inevitably, the basis of the land value. At the height of the boom developers were paying around $200 per buildable square foot for land. I have no hard numbers to back it up, but I suspect that in the current market the going rate is more like $75 - $100/SF. So, if you're in an R6B zone, which allows a FAR of 2, then I would guess the land in question is worth between $180k and $240k.
Posted by: johnife at March 19, 2009 11:09 AM
Does the fact that the parcel is zoned for a pool or shed, not R6b, make a difference? Or would it be easy to change that zoning?
It's a short parcel next to the corner lot.
Posted by: Maly at March 19, 2009 12:27 PM
I do not believe there is any such thing as a "pool or shed" zone. Go to the link below to find the zoning map for your particular location to see what the zoning actually is.
http://www.ci.nyc.ny.us/html/dcp/html/zone/zonedex.shtml
Posted by: johnife at March 19, 2009 12:47 PM
I see what you mean. Thank you. It is zoned R6, and the building designation is Z0 (pool shed etc). In reality, it's an empty lot. The FAR is 2.43, does it mean the value (if the current price is $75-100) would be 220,000 to 290,000?
Am I getting this right?
Thank you very much for your help.
Posted by: Maly at March 19, 2009 5:45 PM
The "building designation" of pool or shed is just what the current structure is (or most recently was). It doesn't restrict what can be built on the lot; rather, the zoning laws do. In all probability it would be legal to build a house on the lot, but the zoning law is extremely complicated, and you should consult a qualified land use attorney, which I am not.
Posted by: zinka at March 19, 2009 11:53 PM
Maly,
Yeah, you've got the idea. I would add, however, that my $75-$100/SF number is predicated on the location being in a good neighborhood (think Park Slope / Boerum Hill). If the house you're looking at is in Bushwick "your results may differ", as they say. Also, I second zinka's suggestion re a zoning expert.
Posted by: johnife at March 20, 2009 9:47 AM
Something to add re pool/shed: The primary purpose of this designation is to set the property taxes, which are lower if there isn't a permanent structure on the lot. If you build something different, it gets reassessed, and may have higher property taxes.
Posted by: zinka at March 20, 2009 11:28 AM
The unhelpful answer is that it's worth whatever the owner is willing to sell it for.
In the good times, the lot could be easily sold to a developer but in today's environment there's not many buyers.
The land only has value to you if you buy the house. You may only want the house if you are able to buy the empty lot. So you should consider negotiating both simultaneously.
Posted by: the chicken at March 20, 2009 1:08 PM
There's a big difference between the going rate for air rights and actual land, though. I think the value of land would be based on what could be built, discounted by the fact theres' nothing there, no?
Posted by: Bessie at March 20, 2009 5:23 PM
I know of several recent sales for tear downs (essentially the land under the house) where prices were over $500 per sq ft. PS, Windsor Terrace, South Slope
Posted by: IMBY at March 22, 2009 10:11 PM
20X60 = 1200 sf = smaller than minimum lot size for any residential district in NYC.
However, they can develop the property for up to a two family as long as the lot existed before 1968.
Still, its a reasonably objectionable restriction given the zoning (it basically filters out any developers who might want to develop the 2600 - 3600 sf you can build here for 3 families, and just leaves families who might want to rent out the basement unit) so you might be able to get a slight discount than you would otherwise.
Here's some more info on determining the build able sf:
2.43 is the maximum achievable floor area using standard R6 zoning, if you have a height factor of 13
(height factor is a funny little calculation i won't go into, but for the purposes of brevity, it means the building is more or less 13 stories high). Not plausible here, really.
If, for instance, you built a 2 or 3 story building, your max FAR is going to be more like 1.28 to 1.62.
Also, optionally, you can use contextual zoning. Depending on whether you're fronting a wide (75' or more, including sidewalk) or narrow street, the FAR is then 3.00 or 2.2.
Its pretty much impossible to tell without doing a formal zoning analysis based on a survey or Sanborn map. If you're serious about purchasing, its worth the couple hundred of bucks for an architect (don't know how much attorney's charge) to do a zoning analysis for you...
Posted by: young archi at May 7, 2009 4:27 PM
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