DEPENDENCY, PRINCIPLE OF


In real estate, the Dependency Principle is an economic principle which states that the use and thus the value of a particular parcel of land can change as a result of modifications of other parcels or other changes in the land-use pattern or environment.

The Dependency Principle is based on the idea that the value of a piece of land is not just determined by its own characteristics, but also by the characteristics of the surrounding area. For example, if a new highway is built near a piece of land, the value of that land may increase because it is now more accessible.

Similarly, if a new shopping center is built nearby, the value of the land may increase because it is now more desirable. Conversely, if a landfill is built nearby, the value of the land may decrease because it is now less desirable.

The Dependency Principle is important in real estate because it helps to explain why the value of a piece of land can change over time. By understanding the factors that influence the value of a piece of land, real estate professionals can make better decisions about buying, selling, and developing property.


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