4.3.1. Highest and Best Use Definition. 

Definition of Highest and Best Use 

The highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future. 

A highest and best use must be reasonably probable. The determination of market value must take into account all considerations that might fairly be brought forward and reasonably be given substantial weight in bargaining between buyer and seller.277 But the Supreme Court has stated: “Elements affecting value that depend upon events or combinations of occurrences which, while within the realm of possibility, are not fairly shown to be reasonably probable, should be excluded from consideration.”278 

A significant practical implication of this legal rule is that a specific highest and best use can only be considered “if the use is likely to be reasonably probable ‘in the reasonably near future.’”279 Accordingly, there must be proof of “present or future demand, the connecting link from adaptability to value.”280 Similarly, if a property could not legally be used for residential development without rezoning or some variance or permit, that use cannot be considered in determining value unless there is “a reasonable probability that the property would be rezoned or that a variance could have been obtained in the near future.”281 This requirement “ensures that the landowner is put in as good a position as he would have occupied if his property had not been taken, but that he does not profit” from a government acquisition for public purposes.282 

The fact that a parcel’s highest and most profitable use “can be made only in combination with other lands does not necessarily exclude that use from consideration if the possibility of combination is reasonably sufficient to affect market value.”283 But “there must be a reasonable probability of the lands in question being combined with other tracts for that purpose in the reasonably near future.”284