4.3.2.4.1. Exceptions.A narrow exception to the general rule that zoning and other land use regulations must be considered in determining a property’s highest and best use may arise under the scope of the project rule.347 As discussed in Section 4.5, the scope of the project rule ensures that compensation does not reflect changes in market value due to the influence of the government project prompting the acquisition. In most valuation assignments, zoning and other land use restrictions are not a form of project influence—they are simply “the legal framework of land use restrictions to which virtually all private real estate is subject,” and so they must be considered regardless of whether the scope of the project rule applies.348 

However, in limited circumstances—and only with appropriate legal instructions—application of the scope of the project rule may allow or require the appraiser to disregard the impact of a zoning restriction on a piece of property.349 The Eleventh Circuit recently stated this narrow exception as follows: 

[I]n order to have a zoning restriction excluded from a calculation of a property’s value, a landowner must show that the primary purpose of the regulation was to depress the property value of land or that the ordinance was enacted with the specific intent of depressing property value for the purpose of later condemnation.350 

Federal case law makes clear that this narrow test is not satisfied simply because the government advocated for or against a local zoning decision. Thus, the Second Circuit held it was improper to consider an improbable prospective rezoning (and therefore a more profitable use) even though the government’s opposition was the primary obstacle to rezoning: “Clearly the United States, like any adjoining landowner, was a proper party to resist zoning.”351 The Second Circuit’s reasoning has been widely adopted by federal courts, most recently by the Eleventh Circuit.352