DEMPSEY APPRAISAL-CONNECTICUT, INC.

Real Estate Appraisal &

Consulting Services

Paul D. Wahrenburg, President                                                                                                                                                  123 Prospect Street

                                                                                                                                                                                             Stamford, Connecticut,  06901-1285

                                                                                                                                                                                                       Telephone 203-967-3852

                                                                                                                                                                                                       Facsimile  203-938-9258

                                                                                                      

 

 

 

May 5, 2002

 

Harry Keleshian 

15 Stallion Trail

Dennis Patouhas

17 Heronvue Road

Greenwich, CT  06831

 

                                                                                                                         Re: Greenwich Planning & Zoning’s F.A.R.

                                                                                                                                Restrictions in its Conservation Zones.

Dear Mr. Keleshian & Mr. Patouhas:

 

Pursuant to your request, I have reviewed the Town’s floor area restrictions and in particular its maximums regarding property in its Conservation Zones. Specifically, I have addressed the economic impact of Section 6-29 of the  Greenwich Municipal Code on both land value(s) and the economic incentive regarding establishing said zoning alternative.

 

As you are no doubt aware, the Commission established the provision for the rezoning of residential property at lower density, where such action is deemed to best conserve and preserve in a manner that is environmentally sound and satisfying one (1) or more of the purposes outlined in Section 6-23 of the Greenwich Municipal Code. The provision provides for alternatives to permitted residential development, when such alternatives will more appropriately assure conservation of land as prescribed by the Division’s general land use policies. Requirements stipulate that 40% - 60% of the total tract be protected from further development and be retained as conservation land. These percentage requirements vary from the R-C7 to RA-C4 zones and are further subject to a number of other discretionary factors including minimum tract size stipulations, prior to subdivision.  The balance of the land available for development is then subject to the conservation overlay of the original zone, while down-zoning the minimum land area requirement.

 

Review shows that the Planning and Zoning Commission has rather broad based power(s) regarding establishing any Conservation Zone. As per Section 6-24, “Planning and Zoning on its own motion, on the petition of the Conservation Commission, or on the petition of one or more property owners, upon finding that a Conservation Zone will more effectively accomplish the purposes of Section 6-23 than the corresponding residential zone, may establish a Conservation Zone”.

 

Strict interpretation of the Subdivision Regulations as well as review of the Commissions polices at present, indicate that any approved Conservation Zone overlay would diminish by substantially more than half the floor area maximums available to the land. This is clearly conceptualized in drawing upon a hypothetical subdivision in the RA-4 (Four Acre) Zone. Assuming the approval of a conservation overlay, one would be required to place a minimum of 50% of the total land into Conservation. This minimum can furthermore be increased to 60% or more, in the RA-CC4 (Conservation Cluster) Zone. The down-zoning of any potential Conservation Zone lot yielded from any subdivision, although half the land area requirement of the lot, is still subject to the F.A.R. maximums of the corresponding original zone. In other words, and given the above hypothetical example, if a RA-4 lot with a .0625 F.A.R. maximum is rezoned into a Conservation Zone, yielding a land area totaling of 2 acres or more, it is still subject to the .0625 F.A.R. maximum. This is inconsistent with the higher .09 F.A.R. maximum in the RA-2, Two Acre Zone, a pattern which manifests itself in  analysis of all the other residential zones, as well. Taking the math of the example further, one can theoretically build up to +10,890 SF given a 4.00 acre lot. Assuming the conservation overlay, providing for a 2.00 acre lot with a corresponding or greater land area equivalent retained in conservation, one can only build up to a maximum of +5,445 SF, a density significantly deficient what is already permitted by the RA-2 Zone (+7,840 SF), with a restricting .09 F.A.R. maximum.

 

The above clearly demonstrates that the development potential in the RA-C4 zone essentially reduces the maximum buildable to actually less than what the RA-1 Zone (.135 F.A.R) allows for. The reduced potential from such Conservation Zoning results in a number of consequences. Just a cursory review of the Greenwich market establishes the majority of new construction as built to F.A.R. maximums. The smaller the house, the lower will be its value. Analysis furthermore, clearly establishes “bracketed” price ranges by size. These bracketed price ranges greatly exceed construction cost(s), relative to sizing and can be attributed to an escalating premium on the basis of size. For instance a +5,445 SF new home in any of the Town’s 1 – 4 acre zones can be shown to sell for a threshold of no more than say +$3,000,000 - +$5,000,000. In contrast a new +10,890 SF new home in any of the Town’s 1- 4 acre zones can be found as selling for as much as +$7,500,000 - +$10,000,000 and possibly higher. These significant differences in price far exceed constructions costs, which might theoretically range from a low of +$250/SF to a high of +$500/SF. The obvious premium on the basis of size can directly be related back to the contribution of the land component and its available potential.

 

The above pattern can furthermore, be shown as manifesting in virtually all of the lower price and size ranges of the market. Lower land potential directly relates back to lower land value(s). It is my opinion, that this is clearly enough to discourage responsible Conservation Zone reclassification in all but the “worst-case” examples. The irony is that this probable outcome greatly negates the intent and purpose of the Conservation Zones as established by Planning & Zoning. These issues further carry over with respect to any overlay of the Conservation Zone on the part of Planning and Zoning regarding any tract property or existing development within such an area. The diminished development potential available to any property owner will certainly reduce in impact and loss in value.

 

Regarding the separate but indirectly related issue of legal, nonconforming (undersized) lots, Planning and Zoning’s F.A.R. maximums were found as also having a significant impact upon value. In those instances where F.A.R. restrictions reduce the development potential to less than that of the lower zone, irregardless of equal or greater than land area totaling, there is a measurable loss in value. This is an obvious issue in certain districts of the Town that have since been rezoned to lower density. This is the case involving of several RA-1 (1 acre) neighborhoods, since reclassified under RA-2 (2 acre), as well as a number of RA-2 (2 acre) neighborhoods, since rezoned to RA-4 (4 acre) restrictions. For instance a 1 acre lot prior to zoning change and subject to an F.A.R. restriction of .135 could theoretically have yielded development up to +5,881 SF. Rezoned to RA-2, the same 1 acre, legal, nonconforming lot is now able to yield a maximum development potential of only +3,920 SF. This is a “significant” loss to the land in terms of both development potential and value. The reality of this interpretation, is that the maximum development potential available to the rezoned 1 acre lot is actually “less” than what is permitted in the R-20 zone, and virtually identical to that available from a 12,000 SF lot in the R-12 zone (+3,780 SF). The math is fairly obvious. In theory, the rezoned 1 acre lot is worth only a little more than a significantly smaller lot conforming to the R-12 zone’s restrictions.

 

I trust this preliminary analysis is of assistance. If I can answer any further questions or develop these findings into a more complete and thorough economic modeling or study, please don’t hesitate to call.

 

                                                                               Sincerely,

                                                                               Dempsey Appraisal-Connecticut, Inc.

 

 

 

                                                                               Paul D. Wahrenburg, President

 

 

CC:  Peter Lauridsen