Costs of Right-of-Way Acquisition: Methods and Models for Estimation

Transportation infrastructure and other major projects often require the taking of real property, or right-of-way (ROW). Accurate estimation procedures are needed to facilitate budgeting and timely completion of projects. The costs of partial takings, commercial properties, remainder damages, court costs, utility relocations, and other ROW-related items are difficult to anticipate. Hedonic price models and large sample data analysis may be useful tools to help agencies track and predict ROW costs and the likelihood of damages. Hedonic price models for estimation of costs associated with taking property are proposed using recent acquisition data from several Texas corridors and full-parcel commercial sales transactions in Texas’ largest regions. Results indicate that damages depend heavily on parking, access, and location, the size of the taking is not as important as the value of improvements, and utility costs are highly variable. For the commercial property value models, improvement square footage and the condition of the property were very significant predictors, with a property in excellent condition being worth $22–$28 (2003 U.S.D.) more per square foot of improved area than a similar property in only fair condition.