A small house is situated n a larger lot in a mixed-use neighborhood. The city decides that the area will, in the future, be zoned commercial. What will most likely happen to the property's value?
A. It will increase, because of the fears of new businesses built nearby
B. It will increase in anticipation of the changing uses
C. No effect, since the house is a nonconforming use
D. No effect, until the change actually occurs
Answer: B. It will increase, in anticipation of the changing uses.
Under the principle of anticipation, a property's value is based on expectations of what will happen to the property in the future. Generally commercial land is worth more than residential land. A small house on a large lot would be viewed as a tear down.
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