TIF and appraisals
I have been asked to expand on my professional opinion of what effect a designation of a blighted area could have on property values in these designated areas.
As a Real Estate Lender, we make decisions everyday on whether the collateral being offered is sufficient to secure a loan. We rely heavily on the appraisal/valuation, whether done by a professional appraiser or done in-house. We look at the subject property and how it compares to the neighborhood and to other similar properties. The end result is to come up with a value for that home as it sits in its present location.
The home's value is in part affected by the neighborhood it resides in, but the simple fact that it is blighted or not should not change the value. The neighborhood is what it is. The positive thing about being in a blighted area is the fact that this designation creates opportunities for that neighborhood to get fixed up, thus the possibility of the subject home's value to actually increase.
I believe the entire emphasis behind this designation is to allow for special programs such as TIF to be utilized so that the neighborhood can be revitalized, which should result in increased values. I can't really see a downside to this, but there is great potential for upside movement in values.
I would hope that those owning a home in the areas that are to be designated as blighted areas can see past a "label" and see the potential this creates for making their neighborhoods a nicer place to live and allow that pride of home-ownership to shine even brighter.
Randall C. Korgan
McCook National Bank