Higher And Better

[dbigtex56]

The phrase "higher and better" is tossed around as if it means something.

Some people think that it means that certain irreplacible attributes ought to be protected; others think that economic forces are the sole criterium.

What does "higher and better" mean to you?

[TheNiche]

The phrase "higher and better" is tossed around as if it means something.

Some people think that it means that certain irreplacible attributes ought to be protected; others think that economic forces are the sole criterium.

What does "higher and better" mean to you?

In academia, this is a technical term which applies to the realms of economics and finance.

In economic terms, the "highest and best use" of a factor of production (land, labor, capital) is arrived at by allocating that factor such that opportunity cost in terms of utility is minimized. In the realm of finance, the concept is the same but with opportunity cost in terms of net profit being of chief concern.

However, the most frequent use of the term is exceptionally technical, used (and sometimes misused) by competent (and sometimes incompetent or dishonest) appraisers. For anybody that is interested, the appraisal bible is called "Appraisal of Real Estate" and it is put out by the MAI Institute, which certifies master appraisers.

It defines the highest and best use of real property as follows: "The reasonable probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." In dealing with vacant land, it is pretty straightforward. What can be built that will achieve the highest profits? With respect to highest and best use of existing improvements, where the general public would tend to see it as more contentious: "An existing property should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one."

**DISCLAIMER: I AM NOT AN APPRAISER. DO NOT RELY UPON THIS POST IN LEGAL DISPUTES OR ANYTHING ELSE WHICH UNDER ANY CONCEIVABLE CIRCUMSTANCES COULD EVER PUT ME IN JEOPARDY.**

[tmariar]

I'm not disagreeing with Niche but, not having any background in real estate, the concept of "highest and best use" has a somewhat different significance for me. I associate the concept with the philosophy of utilitarianism, and the position that any given resource should be put to its highest and best use - i.e., the use that will maximize its benefits. It is very popularly applied in the field of economics, as Niche mentioned, going back to philosophers such as Jeremy Bentham. But also has applications in fields like law, politics, social planning, etc., where it goes hand in hand with the related utilitarian notion of rights allocation so as to bring the greatest good to the largest number of people. (Even then, it's not always just people taken into consideration - see Peter Singer's Animal Liberation, for example.)

Some obvious problems in achieving the utilitarian ideal in resource allocation include what benefits you deem important to maximize and how you measure maximization of those benefits - those issues arguably undermine some of the supposed neutrality of using a utilitarian approach for resource allocation. While the economic benefits of a particular use may be the easiest to measure, taking other benefits into consideration is not inconsistent with with the classic concept of utilitarianism, which is often discussed in terms of what will bring the most "happiness" to the most people. (Obviously, "happiness" is difficult to measure, especially if you're in the money doesn't buy happiness camp.) So, from a philosophical approach, the highest and best use of a parcel of property with a high market value might still arguably be to use it as a community garden, for example - utilitarianism doesn't dictate free-market economics, in other words, though free-market economics relies heavily on a variety of utilitarian theory.

In school, utilitarianism is often studied in connection with competing philosophies that are critical of utilitarianism. There are some significant ones, and the American legal and social systems have arguably been influenced more by rights-based philosophies than utilitarianism. A rights-based philosophy would arguably seek to protect "certain irreplacable attributes", as you mention - but then again, so would certain brands of utilitarianism. Free-market economics, however, is likely to place less value on such intangibles, or take them into consideration only to the extent they have economic value.

[memebag]

What does "higher and better" mean to you?

Sounds like something you would hear at a rave. Over and over and over.