Market Versus Assessed Values of Industrial Land

Abstract

The purpose of this paper is to identify the manner in which parcel scale, micro‐location, and macro‐location influence the market values and the assessed values of parcels zoned for industrial use. The implicit prices exhibited by the market for industrial parcels in the west suburbs of Detroit are somewhat different than those which are embodied in the assessment process in the same area. The market exhibits plattage (i.e., a value increment from subdivision), but there is little recognition of it in the assessment process. Also, there appears to be no recognition of the market frontage effect in the assessment process, and assessors appear to have different views of the importance of industrial parks than estimates from the market indicate would be appropriate. However, the market and assessment models are remarkably similar with regard to the impact of north‐south location and landfill permits.