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Date: Frig 20 Feb 1998 16:10:32 -0500 • To: Jim Ericson<moundsview@freenet.msp.mn.us> From: Chris Richardson Subject: Re: Commercial encroachment Dear Jim Ericson Any time that an external obsolescence, noise, traffic, parking lot and advertising lights, maybe even just a large building that blocks sunlight, there is some loss of value to residential property, most evident when the homes are single family and perhaps less when they are multifamily rentals. You are asking about the effect of one store but the public may perceive a trend, or developers may perceive an opportunity to create a trend, a neighborhood in transition with changing property values. Downward due to adverse neighborhood conditions and a shortened remaining economic life of the individual buildings due to the liklihood of removal and replacement with commercial structures, and this can bring with it speculation that land values will increase sharply. The reality is usually much less dramatic, especially where the public is convinced that this store will be the exception, but in some cases the residents have strong opposition. In Warner NH McDonalds fought for four years before being granted permission to build and the site plan involved changes from their usual style, using instead antique store front, no towering sign. Rite-Aid pharmacy is fighting with the town of Hopkinton NH for the right to build, denied twice and now headed for court, in a town with a strong presence of antique colonial homes. • In both of these cases it was not just the immediate neighbors but the whole town that felt it was impacted and would suffer a loss in appeal. The case of a loss in value would be very hard if not impossible to prove for all but the immediate neighbors, but for those in sight of the new commercial building I think a good case could be made for loss of value, much through loss of marketability evidenced in longer market times, smaller pool of potential buyers and even if the offers didn't come in lower time is money, but generally there is evidence of lowered offer amounts as well. Now, as to how much?? What I could pull out of my files might not be what you would see in your community and certainly would have no direct applicability. You should contact a local appraiser and he could cite a few examples based on similar neighborhoods, price range of homes, and if he has kept a file of paired sales he might be able to state what a loss of value was between being next to a commercial district and several blocks hack You could probably expect somethin in the range of 5% or 10%but probably not a whole lot higher. Additional variables would include the amount of screening, especially trees which could block lights and deaden sound, and the presence of adverse conditions that were already there such as being on a busy road so an increase in traffic wouldn't really be noticed. These are the sort of things that someone familiar with the neighborhood could comment on, but absent any commercial conditions I feel pretty strongly that homes in close proximity would suffer some loss. Sony I can't be any more specific, but I hope this has been some help. Get back to me if you have more questions. Regards, • Chris Richardson