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Residential Properties Taken Under Eminent Domain: Do Government Appraisers Track Market Values?

12 Pages Posted: 29 Dec 2006  

Terrence M. Clauretie

University of Nevada, Las Vegas - Department of Finance

William Kuhn

Uiversity of Nevada-Las Vegas

R. Keith Schwer

University of Nevada-Las Vegas

Abstract

Local governments often use powers of eminent domain to take residential properties for public use. In such cases, the local government will use their appraisers to calculate an offer on the property. If the government's goal is to avoid costly (use of administrative resources) litigation it may have an incentive to over-appraise the properties. Such over-valuation would transfer the cost to taxpayers. This study compares the appraised value of sixty properties taken through eminent domain in Clark County, Nevada to comparable properties sold in free market
transactions. The findings indicate a 17% over-appraisal of the properties taken by eminent domain. The findings also indicate that a government may use simple rules for appraising the properties, whereas the market employs more complex rules.

Keywords: eminent domain, over valuation, over appraisal, residential

JEL Classification: L85, R11, R12, R15, R21, R31, R38, R51, R58

Suggested Citation

Clauretie, Terrence M. and Kuhn, William and Schwer, R. Keith, Residential Properties Taken Under Eminent Domain: Do Government Appraisers Track Market Values?. Journal of Real Estate Research Vol. 26, No. 3, 2004. Available at SSRN: https://ssrn.com/abstract=954020

Terrence M. Clauretie (Contact Author)

University of Nevada, Las Vegas - Department of Finance ( email )

4505 S. Maryland Parkway
Box 456008
Las Vegas, NV 89154-6008
United States
(702) 895-3223 (Phone)

HOME PAGE: http://business.unlv.edu/finance/directory_display.asp?user=188486107#

William Kuhn

Uiversity of Nevada-Las Vegas ( email )

4505 S. Maryland Parkway
Las Vegas, NV 89154
United States

R. Keith Schwer

University of Nevada-Las Vegas ( email )

4505 S. Maryland Parkway
Las Vegas, NV 89154
United States

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