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Value non-livable units as a function of livable units within building #27

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dfsnow
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@dfsnow dfsnow commented Feb 14, 2024

This PR updates the valuation methodology for non-livable condominium units such as parking spaces, storage areas, and common areas.

Previously, the valuation methodology was:

  1. Non-livable units were assigned a fixed value ($30K)
  2. Livable units were assigned a predicted value from the model
  3. All units (livable and non-livable) had their valued summed to get the building total value
  4. Unit values were then apportioned back out by multiplying their percentage of ownership by the building total value

This method had two major downsides:

  • It relied on an arbitrary, fixed non-livable value that didn't vary by geography
  • The non-livable space values impacted the value of livable units by virtue of being included in the building total value

New Method

The new method replaces the old method. It has the following steps:

  1. Livable units are assigned a predicted value from the model
  2. Livable unit values are summed to get the livable unit total value
  3. Non-livable units are assigned a value using their percent of ownership relative to the livable unit total value. The formula is bldg_total_livable_value * (pct_ownership / bldg_total_livable_pct_ownership)

Here is a worked example: condo demo 2.xlsx

The result is non-livable values that are proportionate to the value of the livable space and not dependent on an arbitrary fixed value.

Closes #25 and #8.

wrridgeway and others added 6 commits February 13, 2024 22:48
This commit changes the valuation methodology for non-livable units
(parking, storage, etc.). It pegs their value to their proration rate
multiplied by the total value of a buildings livable units. This
obviates the need for a fixed non-livable unit value.
@dfsnow dfsnow added this to the 2024 model parity and updates milestone Feb 14, 2024
@dfsnow dfsnow marked this pull request as ready for review February 14, 2024 17:55
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@wrridgeway wrridgeway left a comment

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This looks great 👍

@dfsnow dfsnow merged commit fb4fbfc into master Feb 14, 2024
11 checks passed
@dfsnow dfsnow deleted the 25-value-nonlivables-as-a-function-of-livables-within-building branch February 14, 2024 19:35
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Value nonlivables as a function of livables within building
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