Section 12: Computation of Housing Supplement
Overview
In determining the amount, if any, of a housing supplement,
select and tabulate comparable properties on form
. Based
upon an analysis of these comparables (described on form
), select the one property
that is most comparable to the subject. Identify this comparable
with an asterisk on form
ROW-R-107 Supplemental Payment
Estimate, Replacement Housing
. Consider the probable
selling price of the selected comparable as the cost of the replacement
dwelling and, from this amount, subtract the value of the subject
property. The resultant amount is the maximum amount the 90-day
owner-occupant is eligible to receive in purchasing a replacement
dwelling. Establishing Subject’s Value
Subject Located on Typical Residential Site
.
When a dwelling is on a tract of normal size and typical for residential
use in the area, the subject’s value is the amount offered to the
owner for the parcel, or the acquisition cost of the parcel established
by the acquiring agency. This includes any damages to the remainder
for a partial acquisition, but not the value of the remainder.Subject Located on Non-residential Land
.
When a dwelling is on a tract that has a higher and better use than
residential, the subject’s value is the approved value of the dwelling
plus the approved value of a portion of the land that represents
a tract typical for residential use in the area. If the acquisition
is less than a typical residential site, add a proportion of any
damages that would apply to the remainder of the typical site to
the above value to establish the subject’s value.In either situation, “major exterior attributes” (excess land
if applicable, and improvements separate from the residence) not
replaced at the selected comparable replacement property should
be subtracted (carved-out) from the parcel’s approved value. Examples
of “major exterior attributes” include, but are not limited to,
such improvements as swimming pools, fencing, specialized landscape
features, tennis courts, storage sheds, etc. Their values can normally
be found on the approved form
ROW-A-10 Tabulation of
Values
attached to the appraisal report. Carve-outs of Excess Land and Improvements
A carve-out of excess land and improvements usually involves
one of the following circumstances.
- The acquisition involves land and improvements not necessary for use of the dwelling by its occupants (usually rural properties or a resident-business combination). In these instances, the subject’s value is the approved value of the dwelling unit, and residential improvements, plus the approved value of land associated with the residential use of the property, (OR) the total approved value of the acquired property, less the value of excess land and major exterior attributes not replaced at the selected comparable site.
- The selected comparable contains less than half of the acquired land associated with the residential use of the displacement property. When this occurs, a carve-out of excess land value at the displacement site will be performed in order to reflect the same amount of land located at the comparable site. If the selected comparable contains land in excess of land acquired at the displacement site, all or a portion of damages to the remaining land at the displacement site may be included in the subject value for relocation purposes.
- The acquisition involves two or more dwelling units, one of which is owner-occupied, on a typical city lot, or involves a business and an owner-occupied dwelling unit on a typical city lot. In these instances, the value of the owner-occupied dwelling, improvements associated with the owner occupied dwelling and the value of the land used with the occupied dwelling are added together, (OR) the excess land, non-owner-occupied dwelling(s), business, and other major exterior attributes not replaced at the selected comparable dwelling are carved-out of the approved value of the acquired property to provide the basis for computing the housing supplement.
When a carve-out of excess land and/or improvements is necessary,
complete and attach form
to form
. In the
tabulation, include the itemized amount of land and improvements
being subtracted from the acquisition cost of the property. In the
tabulation, also show any damages subtracted from the parcel acquisition
cost for land or for improvements on the remainder that have no
relationship to the displaced residence. The itemized values, including
damages, must correspond to those in the approved appraisal report.
Exclude improvements having no relationship to use of the dwelling.
An exception might be made in rural areas where small barns and
sheds are typical of homesteads in the area, excluding large outbuildings,
corrals, and pens associated with operation of a farm or ranch as
a business.
Show all itemized assets included in the subject’s value in
the subject’s quality or yard improvements index, as applicable.
The amount of land carved out for the dwelling site should be governed by
what is typical of the area, and its value in computing the supplement
is the appraised value for that part of the parcel.
Subject is a Duplex or Triplex
When the subject is a duplex or triplex, the unit occupied
by the displacee should be carved-out as in the preceding subsection.
In calculating supplements for displacees from these properties,
any dwelling unit that is comparable to the quarters actually occupied
by the displacee, such as an apartment or unit in another duplex
or triplex, or a single family residence, may be chosen as a comparable.
The comparable dwelling should be the same as that acquired (i.e.,
if the acquired property is a triplex, then the comparable should
be a triplex). If comparables are not available, then use structures
of the next lowest density. Never use a higher density structure
as a comparable. Use the value of the owner’s living as the base
for the replacement housing computation, and not the value of the
whole property. Therefore, the housing supplement is equal to the
difference between the carved-out value of the owner’s living unit
plus the approved value for the land, and the carved-out value of
a comparable living unit plus land in the most comparable available
property.
Portion of Subject Rented Out
If the owner-occupant of a single-family dwelling rents out
a portion of his/her dwelling, calculate supplemental
payments to the owner-occupant in the normal manner, as though there
is no tenant. Calculate the tenant’s rental supplement by choosing
replacement properties that are comparable to the rooming facilities he/she occupies.
Subject’s Value Established by LPA
Where an LPA makes an appraisal, such as for the acquisition
of ROW for a Farm to Market road, furnish TxDOT with information
to support the subject’s value and to permit a constructive review of
the recommended replacement housing supplement forms. Minimum supporting
information includes:
- a sketch of the floor plan;
- a photograph of the subject dwelling; and
- a copy of the LPA appraisal report.