Are Damages to Remainder Parcels in Right-of-Way Acquisitions Stationary? A Spatial Analysis of Appraisal Report Data

Abstract

The acquisition of private property by right-of-way projects causes economic changes to the remainder of the property. An issue is the deviations in remainder parcel values between appraisers. Therefore, it is vital to understand whether appraisers in different locations consider and value the same or different factors. The objective of this paper is to identify spatial heterogeneity in the factors contributing to damages (as percentages) to remainders of affected parcels. Data on 507 appraisal reports for affected remainder parcels in Tennessee were collected and coded, creating a unique database with 23 variables. Applying a geographically weighted Gaussian regression model uncovered whether relationships were stationary over space. Results show that the local model outperforms the global model with an improved adjusted R² of 0.81 compared with 0.77 in the global model. The most significant factors contributing to damage percentages that varied spatially are ratio of acquisition, adverse change in utility, major acquisition of landscape, highest and best use changed to assemblage, and major damage to access (landlocked). A larger area, corner parcels, and all categories of existing land use compared with residential use tend to lower the percentage damage to the remainder. Nashville is less severely affected by major damage to access, presumably for its high price of land. This study can assist appraisers in getting an early estimate of damage during partial takings. Property owners will have clarity about the impact of the eminent domain procedure on their land’s price.