Wetlands: The Elusive Value

Date of Award

1993

Document Type

Thesis

Degree Name

Master of Science -Valuation

Department

Business

First Advisor

Susan B. Dunton

Second Advisor

Theodore R. Laputka

Third Advisor

Robert P. Brooks

Abstract

Wetlands are essential complex ecosystems; mostly semi-aquatic lands that are inundated by water for varying periods of time during the year. Until recent times wetlands have been looked up on by landowners and developers as a nuisance that required draining and conversion in order to provide usable, developable land . This conversion resulted in an excessive loss of wetlands in the continental U. S. which triggered action by federal, state and local governments to save this valuable resource . As the pendulum swings, obtaining a permit from the proper authority to drain or convert wetlands be came an extremely difficult, expensive, and time consuming process.

Properties that are partially or totally inundated with wetlands are considered by many to have no value and in some cases a negative value despite the social and many economic benefits of wetlands. Many argue that the government regulations on wetlands result in a "taking" for which just compensation should be made to the property owner as provided in the U. S. Constitution. Certain types of wetlands enhance property value by providing commercial, recreational, public service, and aesthetic benefits . In some jurisdictions government regulation of wetlands have actually presented some profitable opportunities to enterprising developers of mitigation banks.

The real estate appraiser assigned the task of valuing a property that is partially or totally inundated with wetlands must understand the different types of wetlands and be familiar with the government regulations regarding wetlands in the jurisdiction where the property is located. He/she must be careful to properly define the value being sought, perform a thorough highest and best use analysis and study the market's concept of the wetlands being appraised. Proper methods necessary to arrive at a value conclusion are defined and explained throughout this research study .

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