Conforming Use
A property use that complies with current zoning regulations and is consistent with the predominant land use pattern in the neighborhood. Conforming uses generally support maximum property values.
A conforming use matches what the neighborhood has developed into and what zoning allows. A single-family home in a residential zone surrounded by similar homes is a conforming use. A non-conforming use (legal but not matching current zoning, typically "grandfathered") may have limited value because it cannot be expanded or rebuilt if destroyed. The appraiser considers whether the subject's use conforms to the neighborhood pattern and zoning, as non-conformity can affect marketability and value.
Related Terms
Highest and Best Use
HBUThe reasonably probable use of a property that results in the highest value, considering uses that are legally permissible, physically possible, financially feasible, and maximally productive..
Legally Permissible
The first test in highest and best use analysis: a use must be allowed under current zoning, building codes, environmental regulations, deed restrictions, and other legal constraints to be considered..
Neighborhood Analysis
The appraiser's evaluation of the area surrounding the subject property, including property values, market trends, land use, demographics, and external factors that influence value.
External Obsolescence
A loss in property value caused by factors external to the property, such as a busy highway, industrial proximity, declining neighborhood, or unfavorable zoning changes.
More in Highest & Best Use
View allPhysically Possible
The second test in highest and best use analysis: a use must be physically achievable given the property's size, shape, topography, soil conditions, access, and available utilities..
Financially Feasible
The third test in highest and best use analysis: a use must generate sufficient income or value to justify the cost of development, including land cost, construction costs, and a market rate of return..
Maximally Productive
The fourth and final test in highest and best use analysis: among all financially feasible uses, the maximally productive use is the one that produces the highest residual land value (or highest property value for improved properties)..
Interim Use
A temporary use of a property that is expected to change in the foreseeable future as market conditions evolve or when the property becomes ripe for development to a higher use..