Definition
A remnant parcel, also referred to as an uneconomic remainder, is a segment of land that remains after a larger, more developable parcel has been subdivided or sold. Commonly, this leftover piece of land is of insufficient size, shape, or location to function effectively for independent development. Due to its impractical nature, a remnant parcel often holds lower market value and may be seen as a burden for the landowner.
Examples
- Highway Expansion Projects: When a government entity acquires land for highway expansion, small parcels adjacent to the expanded highway may remain that cannot be used for substantial development or residential purposes.
- Commercial Development: During the development of a commercial shopping center, irregular land strips or small corners leftover from the original parcel might not be suitable for any meaningful commercial use.
- Urban Rezoning: In cities, rezoning can leave behind small remnants of land that do not meet the minimum lot size for building new structures under current zoning laws.
Frequently Asked Questions
What happens to remnant parcels?
Remnant parcels are often deemed uneconomic or unusable for large-scale development. They might be combined with adjacent properties if viable or repurposed for small-scale uses such as auxiliary parking or landscaping.
Can remnant parcels be sold?
Yes, remnant parcels can be sold, although finding interested buyers might be difficult because of their limited utility. Sometimes they are purchased by adjacent property owners who might find additional land useful.
Are remnant parcels taxable?
Yes, remnant parcels are still subject to property taxes based on their assessed value, despite their limited commercial viability.
How can the value of a remnant parcel be assessed?
The value of a remnant parcel can be assessed based on location, size, shape, and any potential utility it might offer to adjacent properties or specific small-scale uses.
Related Terms with Definitions
- Uneconomic Remainder: Similar to a remnant parcel, it’s a piece of land left after a larger tract has been subdivided or sold which lacks sufficient usefulness or value on its own.
- Easement: A right to cross or otherwise use someone else’s land for a specified purpose.
- Zoning: Municipal or local government laws that regulate how property can be used in certain areas.
- Land Assembly: The process of merging smaller parcels of land to create a larger parcel for development.
Online Resources
References
- Investopedia. (2023). Real Estate Terms. Retrieved from https://www.investopedia.com/
- National Association of Realtors. (2023). Land Economics. Retrieved from https://www.nar.realtor/
- U.S. Department of Housing and Urban Development. (2023). Land Use. Retrieved from https://www.hud.gov/
Suggested Books for Further Studies
- “The Economics of Land Use” by Stephen Malpezzi
- “Real Estate Development - Principles and Process” by Mike E. Miles, Laurence M. Netherton, and Adrienne Schmitz
- “Urban Real Estate Investment: A New Era of Opportunity” by David M. Geltner and Norman G. Miller
Real Estate Basics: Remnant Parcel Fundamentals Quiz
### What is a remnant parcel?
- [ ] A fully developable piece of land.
- [x] An uneconomic remainder of land left after the sale or subdivision of a larger parcel.
- [ ] A large plot meant for agricultural use.
- [ ] Government-owned land for public use.
> **Explanation:** A remnant parcel is the uneconomic remainder of land left over when a larger, more valuable parcel has been divided or redeveloped.
### Which of these is a potential use for a remnant parcel?
- [ ] Large commercial development
- [ ] Residential housing complex
- [x] Auxiliary parking
- [ ] Independent business operation
> **Explanation:** Due to their limited size or impractical shape, remnant parcels might be used for auxiliary functions such as overflow parking or landscaping.
### What type of value does a typical remnant parcel have?
- [ ] High economic value
- [x] Lower market value
- [ ] Same value as larger parcels
- [ ] Operational business value
> **Explanation:** Remnant parcels often hold lower market value because their limited size and impractical layout reduce the potential for independent development.
### Who might be a likely buyer of a remnant parcel?
- [x] An adjacent property owner
- [ ] A multinational corporation
- [ ] A large real estate investment trust
- [ ] Foreign governments
> **Explanation:** Adjacent property owners might be interested in buying remnant parcels as they can incorporate them into their existing properties, potentially for small-scale uses.
### Can you build large structures on a remnant parcel?
- [ ] Yes, all the time.
- [ ] No, never.
- [x] No, typically remnant parcels are impractically small or irregularly shaped for big constructions.
- [ ] Yes, if rezoned.
> **Explanation:** Remnant parcels are usually unsuited for large construction due to their size or shape.
### Are remnant parcels subject to property taxes?
- [x] Yes
- [ ] No
- [ ] Only if developed
- [ ] Only if commercial properties
> **Explanation:** Despite their limited usefulness, remnant parcels are still subject to property taxes based on their assessed value.
### What is the impact of zoning laws on remnant parcels?
- [x] They can restrict development possibilities.
- [ ] They ensure maximum utility.
- [ ] They eliminate property taxes.
- [ ] They increase property value.
> **Explanation:** Zoning laws can restrict the development possibilities for remnant parcels by establishing minimum lot sizes and usage regulations that these irregular plots may not meet.
### Why are remnant parcels often hard to sell?
- [ ] They are highly sought after.
- [x] Their impractical size, shape, or location reduces their appeal.
- [ ] They require no taxes.
- [ ] They are typically in high demand areas.
> **Explanation:** Remnant parcels are hard to sell due to their impractical size, shape, or location, making them unattractive for large-scale development.
### How can the value of remnant parcels be maximized?
- [x] By combining them with neighboring plots.
- [ ] By marketing them individually.
- [ ] Demolishing all small structures.
- [ ] Removing built-in easements.
> **Explanation:** Combining remnant parcels with adjacent plots can maximize their utility and potentially increase their market value.
### What key factor determines the usability of remnant parcels?
- [ ] The beauty of the surrounding landscape.
- [ ] Proximity to highways.
- [ ] Size and shape of the land.
- [x] Both size and shape of the land combined with location.
> **Explanation:** Both the size and shape of the land significantly impact the usability of remnant parcels. If they are impractically small or oddly shaped, their utility is severely limited.
