Background
In determining valuation of an expropriated interest, arbitral tribunals must consider existing planning and zoning regulations. However, the admissibility of evidence concerning post-expropriation planning and zoning changes can often become a pivotal issue in determining the probable highest and best use, as well as the market value of the subject property.
Consider a scenario, for example, where following the effective date of an expropriation, a city council enacts a new zoning ordinance reclassifying an area previously zoned for agricultural use into a mixed-use residential and commercial zone. Here, the admissibility of evidence pertaining to the post-expropriation zoning change emerges as an important issue in determining the fair compensation owed to the landowner. On one hand, admitting such evidence may risk being unduly influenced by circumstances that arose after the expropriation, perhaps neither predictable nor anticipated. On the other hand, refusing to admit such evidence may lead to overlooking crucial factors relevant to a landowner’s claim. Accordingly, the issue presents arbitrators with a delicate balancing act.
While the law concerning the admissibility of post-effective date planning evidence is mixed, two overarching principles emerge from the series of cases discussed below:
- Post-effective date planning evidence is generally admissible when it pertains to an ongoing process affecting the use of the subject lands that existed prior to the date of expropriation.
- Admissibility hinges on demonstrating the relevance and logical probative value of the evidence regarding the issue at hand.
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