2005/06/15 Council Agenda Packet

PROFESSIONAL APPRAISAL OF IMPACTS Because of the great number of variables that have the ootenn al to cause a particular real estate market to perform -rratically at a small area level, it was decided to solicit a "best available professional opinion" from real .estate appraisers regarding the market effect of adult entertainment businesses on proximate land values. The Indianapolis Division of Planning approached the Indiana University School of Business' Division of Research for assis- tance in polIino the real estate appraisal community on the sub- ject. The University proposed that the survey be national in scope and offered to design and pretest_ the survey instrument. Dr. Jeffrey Fisher of the University's School of Real Estate collaborated in drafting the instrument and conducted the ini- tial test at a workshop in early September. Analysis of this pretest indicated the need.for minor adjustments to the form. In its final format, the instrument (cf. Appendix II ) posited a hypothetical middle income, residential neighborhood in which an adult bookstore was about to locate. Respondents were asked to numerically rate the impact of this business on both residential and commercial property values within one block and three blocks of the store. They were also asked to race a num- ber of potential other uses as to whether they would increase or decrease property values. Finally, survey participants were asked to express what they generally felt the effect of adult bookstores was on property values. The survey sample was drawn at two levels. Using the membership J of the American Institute of Real Estate Appraisers as the sur- vey universe, a twenty percent random sample of members was constructed for the entire nation. In addition, MAI (Member Appraisers Institute) members who practiced in 22 Metropolitan Statistical Areasl (MSAs - as defined by the U. S. Bureau of the Census) of a"size similar to Indianapolis were surveyed at the one hundred percent level. In January of 1984, 1527 questionnaries were mailed. As of February 22, 507 (33%) had been returned. These returns were split evenly between the 20% (249 returns) and 100% (258 returns) samples. In the national sample the rate of return by geographic region 2 was Fairly consistent: East,41 - 27%; North Central, 56 - 28%; South, 89 - 25%; and, West, 63 - 24$.Return rates frcm the 100% MSA survey varied from 14% from Newark, N. J. to 62; from Cleveland, OH. E VER00045