Start Date
30-11-1988 10:00 AM
End Date
30-11-1988 12:00 PM
Description
Within the City of New York, in a distance of but three or four miles, it is possible to find similar houses selling for prices ranging from more than a million dollars to less than a tenth that amount. Within the last decade certain neighborhoods in New York City have experienced tenfold increases in property value while other neighborhoods have barely kept pace with inflation. Gentrification, deterioration, and sharp geographic variation are common to most older North American cities. They are responsible for the differentiation and change in property value attributable to location. Mass appraisers have traditionally relied on a manual, fixed neighborhood approach to calculate location value. In cities like New York this approach is now obsolete. Rather than divide the city into a large number of somewhat arbitrary fixed neighborhoods, mass appraisers in New York City identify points and lines of high or low property value which are called Value Influence Centers (VICs). Mathematical functions relate the change of value, or slope, from these centers to any location depending on the distance and direction to the various VICs. The value of a location is represented as the height of a point on the threedimensional surface formed by the VICs and their connecting slopes. The entire surface, called a Location Value Response Surface (LVRS), may be graphically displayed with generic 3D software. An LVRS display, particularly when compared with real world features (transportation a~teries, topography, service area boundaries), is even suggestive of its own adjustments. LVRS techniques have proven equal to the task of accurately assigning large differences in location value over small distances in space. Temporal changes in the LVRS for New York City have been accomplished by adjusting the positioning of VICs and the parameters of their connecting slope functions. This paper and presentation include a demonstration of the entire process by which location value of a property is calculated, using examples from New York City appraisal research. The utility of graphic display will also be illustrated in the New York context.'
Publication Date
November 1988
Recommended Citation
Eichenbaum, Jack, "Location as a factor in determining property value" (1988). International Research Symposium. 25.
https://researchexchange.iaao.org/irs/irs88/sessions/25
Location as a factor in determining property value
Within the City of New York, in a distance of but three or four miles, it is possible to find similar houses selling for prices ranging from more than a million dollars to less than a tenth that amount. Within the last decade certain neighborhoods in New York City have experienced tenfold increases in property value while other neighborhoods have barely kept pace with inflation. Gentrification, deterioration, and sharp geographic variation are common to most older North American cities. They are responsible for the differentiation and change in property value attributable to location. Mass appraisers have traditionally relied on a manual, fixed neighborhood approach to calculate location value. In cities like New York this approach is now obsolete. Rather than divide the city into a large number of somewhat arbitrary fixed neighborhoods, mass appraisers in New York City identify points and lines of high or low property value which are called Value Influence Centers (VICs). Mathematical functions relate the change of value, or slope, from these centers to any location depending on the distance and direction to the various VICs. The value of a location is represented as the height of a point on the threedimensional surface formed by the VICs and their connecting slopes. The entire surface, called a Location Value Response Surface (LVRS), may be graphically displayed with generic 3D software. An LVRS display, particularly when compared with real world features (transportation a~teries, topography, service area boundaries), is even suggestive of its own adjustments. LVRS techniques have proven equal to the task of accurately assigning large differences in location value over small distances in space. Temporal changes in the LVRS for New York City have been accomplished by adjusting the positioning of VICs and the parameters of their connecting slope functions. This paper and presentation include a demonstration of the entire process by which location value of a property is calculated, using examples from New York City appraisal research. The utility of graphic display will also be illustrated in the New York context.'