Highest and Best Use
Standard Definition
The legally permissible, physically possible, financially feasible, and most productive use of a property, determined during appraisals.
Detailed Examination Analysis
Highest and best use is an appraisal concept. Appraisers analyze a property to determine the use that will generate the highest net return over time. The proposed use must meet four criteria: it must be legally allowed (zoning), physically possible (lot size/soil), financially feasible, and yield the highest value.
Real-World Examination Scenario
"A vacant lot is located in a commercial zoning district. While it could be used for a small garden, its highest and best use is determined to be a multi-story retail development."
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