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Editor’s Note: The goal is to help appraisers stay in business, broaden their client base and expand their expertise.  And, says author and appraiser Sue Hoell, to help meet the current and anticipated demand for competent appraisers for public projects in rural areas, small towns and urban areas.


Appraising Outside the Banks: Public Projects

By Sue Hoell


Strong demand exists for appraisals associated with federal, state, and local public projects.  A “project” might include a new regulation or a change in use of public property, as well as new physical structures and infrastructure and disposal of property no longer needed by a government agency.  Public agencies need rigorous, factual, competent appraisals to support their offers to private property owners.  Private property owners may want to contract for their own appraisals when part, or all, of their property is required for a public purpose.  Frequently, government agencies sell or exchange real property with each other. Both of these situations may require appraisals.


Public projects in urban areas can include the acquisition or disposition of property supporting schools, public buildings, streets, open space and hiking and biking trails.  Projects in suburban areas are apt to include the expansion of sewer, water and gas pipelines, power lines, public roads, a new or re-aligned interstate off-ramp, airport expansion, or waste processing locations.  Rural areas can include acquisition of all or parts of farm land, recreational land or timbered land for highway projects, public campgrounds, wildlife preservation, wetlands projects and many other types of environmental protection projects. 


Development of new public infrastructure is among the top priorities of the federal government as it works to solve the current jobs crisis.  You can be at the head of the pack in providing the appraisals needed to move these projects forward. 

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Getting Up to Speed

Appraisals associated with public projects differ in several ways from appraisals required by lenders.  Guidelines are provided in the Uniform Appraisal Standards for Federal Land Acquisitions, in state statutes, by case law, and by regulations specific to a particular project funding agency. While investigation of these authorities for each set of appraisal conditions may sound daunting, or at least time-consuming, with practice it can also become a new area of appraisal specialization.

Too often, non-lender clients assume that a licensed appraiser is competent to provide appraisals for any purpose.  They don’t understand the difference in Scope of Work between lending conditions and public project conditions.  Sometimes appraisal practitioners are unaware of their own lack of competence when offered an engagement associated with a public project.  The client may need a quick turn-around, leaving little time for the appraiser to study unfamiliar regulations and guidelines.  Courses on eminent domain and “partial interests” may not be immediately available.  Mentors may or may not be immediately available.  Projects tend to have strict time constraints on each step of the process.  Appraisals cannot be accepted if they fail to comply with applicable regulations and guidelines.


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Scope of Work: Lending vs. Public Projects

  • Public Projects often impact only part of a property or property interest.  This adds a new twist to traditional appraisal steps, requiring the appraiser to learn about the project and exactly how it will impact the property or property interest.   Before and after methodology may be applicable.

  • Federal agency appraisal standards, state statutes, case law, and regulations specific to a particular project funding agency may require compliance.

  • The appraiser may need to understand engineering plans.  Meetings with engineers and agency officials may be necessary. 

  • Engagements often address existing easements and new easements.  The appraiser must understand accepted methodology for appraising different types of easement conditions.

  • Typically narrative appraisal reports are used rather than form reports.

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Stepping Up

These types of appraisals are interesting for a variety of reasons: Learning about proposed public projects and how projects impact the community; working with engineers and staff to solve problems created by a project and gaining an understanding of how community conditions are addressed and the steps required to bring projects to fruition.


Fees are generally consistent with the time and expertise required.  Qualified appraisers are asked to bid on projects. Time frames range from a week to six months. A contract could be anywhere from $400, for the simplest, most straight-forward appraisal to $90,000 or more for an appraisal contract involving multiple properties.  Because property conditions and project conditions vary so much, there is no standard fee or timeframe.   


In most cases the appraiser needs a General Certification, however, residential appraisals are also needed for some public projects.  For the appraiser interested in pursuing public project appraisal engagements, the following steps are recommended: Take a course in “The Yellow Book” i.e. Uniform Appraisal Standards for Federal Land Acquisitions.  The Yellow Book doesn’t apply to all public project appraisals but it applies to many of them: know where it does and does not apply. Carefully read, highlight, dog-ear, and understand the Yellow Book.   Reread and comply with each part that is applicable to each particular appraisal engagement, before completing the engagement. Read the most current edition of Real Estate Valuation in Litigation, by Jim Eaton and refer back to applicable parts when completing appraisals for public projects.  The book instructs on a wide array of public project appraisal conditions. Know where to find federal, state, and local regulations, as well as case law relevant to appraisals for each type of public project. Expand your skills in writing narrative appraisals.  Forms developed for the banking industry are not applicable to non-lender appraisal engagements. Keep your eye on news articles on proposed or anticipated federal, state, and local projects likely to require appraisals.  Identify, and take time to meet, the folks who hire appraisers for these projects. When you are ready, sign up on the Federal Central Contractor Registration website


A good place to start might be the online course offered by The University of Montana-Helena.  The course is called Introduction to Appraising for Public Projects.  Find more information on the course at; Sidebar: Introduction to Appraising for Public Projects.


About the Author

Sue Hoell is a Certified Distance Education Instructor.  She has provided appraisals, reviews, and policy development for federal, state and local government agencies for the past 22 years.  She has authored several articles and book reviews for various appraisal publications, and currently serves on The Appraisal Journal Editorial Board.






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