Land immediately adjacent to a golf course or park is often valued higher. Land immediately next to railroad tracks or industry, not so much while the discount drops off steeply just a few blocks away.

Water rights, drainage, soil quality, contamination, roadway access all matter a great deal for more commercial land.

I'd argue that the factors you've listed are relatively easy to factor into an appraisal.

Property taxes, in comparison, are really hard to compute. Each jurisdiction has different rules. There are different valuation methodologies. If you add a 2 car garage, what the useful life. What depreciation schedule should be used. How should inflation be accounted for.

I agree with your comment generally and am not sure what part of the original comment doesn't make sense to you.

EDIT: Reread my original comment and see your point now. I phrased the "easy" part too strongly. I mean "easy" in relative terms... compared to what's being done currently, but agree the wording wasn't great.

As an aside, I've often been surprised how little some of these features get valued. For instance, I've looked at neighborhoods where one side of the street backs to other houses and the other side backs to parkland. The nicer side is generally more expensive, but it's not a huge effect, and often homes on the bad side go for more money (because of the building itself).

Mark to market. If you sell your home, then that value is the fixed price of the home until the next sale event.

And don't you think it's funny: we can't have rich people moving here because that would drive up land taxes, and we can't have poor people moving here because that would drive down the total resale value. I guess people should only be allowed to live among their exact socioeconomic equals ...

> this wouldn't happen very often

Then, I suppose we would have no reason for the term "gentrification", if it's that damn rare.

No, it's really easy to wave your hands and come up with a number that you claim is "the value of the land". But since that number is not based on actual sales of the land in question, it's just hand-waving. Not to mention that if you ask five different economists to do the estimating, you'll get more than five different answers. Much of the article that prompted this thread is trying to deal with this problem: there are so many widely varying estimates of land value, and no compelling reason to believe any one more than the others, because none of them are based on actual sales of the land whose value they're trying to estimate.

> since that number is not based on actual sales of the land in question, it's just hand-waving

Actual land is sold in a lot of markets. That sets a great benchmark for "comparable transaction" types of valuation analyses which tend to be the most reliable.

If one acre of land is sold, there is a great baseline for the whole surrounding area.

I passed all 3 CFA exams and agree it's not an exact science, but as far a valuation analyses go, this one is pretty easy. Valuing something like intellectual property, goodwill impairment analyses, 409a valuations are much harder.

But much more land with improvements on it is also sold, and that's the land that all these hand-waving formulas claim to be determining the "value" of--not the total value of land + improvements, but just the value of the land itself.

It likely wouldn't work with real estate, but low cost motorsports has a simple solution to this problem. If there is a $1000 limit on the value of the car before all the standard safety additions, then the owner has to accept $1000 from any other competitor for the car. This massively disincentives anyone from undervaluing their race car as it will simply be purchased for way less than it's worth. In real estate this would just result in wealthy people snapping up anything they thought was even slightly undervalued. Maybe value purchases can only happen when challenging a valuation with strong court-backed protection for the owner to ensure the valuation has been applied justly.

I'm not sure I agree with this, since construction costs are subject to a lot of government interventions that distort the market.

> The toughest part is making sure the process isn't corrupted

Exactly.

>There would be an annual value assessment for each plot of land

It seems the OP has better examples of how it would be done than that link.

Maybe that's just me...