Land development refers to altering the landscape in any number of ways such as:
- changing landforms from a natural or semi-natural state for a purpose such as agriculture or housing
- subdividing real estate into lots, typically for the purpose of building homes
- developing property or changing its purpose, for example by converting an unused factory complex into condominiums
The prudent landowner or developer on any size of project will inevitably want to maximise profits, minimise risk and control his cash-flow. This is a process called Profit Enhancement. This means identifying and developing the best scheme for the local marketplace, whilst satisfying the local planning process. Essentially, Development Analysis puts development prospects, and the development process itself, under the microscope, identifying exactly where enhancements and improvements can be introduced. These improvements aim to align with best design practice, political sensitivities, and the inevitable social requirements of a project, with the overarching objective of increasing land values and profit margins on behalf of the landowner or developer. Development Analysis can add significantly to the value of land and development, and as such is becoming a crucial weapon in the landowners and the developer's armoury. It is an essential step in Kevin A. Lynches (1960) book The Image of the City, and is considered nowadays to be an essential step to realising the value potential of land. The landowner can share in additional planning gain (significant value uplift) via an awareness of the land's development potential. This is done via a residual development appraisal or residual valuation. The residual appraisal calculates the sale value of the end product (the Gross Development Value, or GDV), and hypothetically deducts costs, including planning and construction costs, finance costs and developer's profit. The 'residue', or leftover proportion, represents the land value. Ergo, in maximising the GDV (that which one could build on the land), you concurrently enhance the land value. Furthermore the land value is highly sensitive to issues such as supply and demand (for the end product), build costs, Planning and affordable housing contributions, and alike. Conversely, understanding and enhancing the effect of value 'drivers' will have an equally positive effect. Therefore, understanding the intricacies of the development system, can equate to massive differences in the landowners sale value. If development analysis is left to the developer however, then it will be he, and not the landowner, who will receive all of the betterment.
Famous quotes containing the words land and/or development:
“The first day that we landed upon that fatal shore
The planters they came round us full twenty score or more,
They rank’d us up like horses, and sold us out of hand
Then yok’d us unto ploughs, my boys, to plow Van
Dieman’s Land.”
—Unknown. Van Dieman’s Land (l. 9–12)
“This was the Eastham famous of late years for its camp- meetings, held in a grove near by, to which thousands flock from all parts of the Bay. We conjectured that the reason for the perhaps unusual, if not unhealthful development of the religious sentiment here, was the fact that a large portion of the population are women whose husbands and sons are either abroad on the sea, or else drowned, and there is nobody but they and the ministers left behind.”
—Henry David Thoreau (1817–1862)