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Property Management Tools and Techniques

1. Introduction

The Federal Highway Administration’s (FHWA) Office of Real Estate Services (HEPR) sponsored the research reported on here to review tools and techniques that SDOTs are using to manage, or inventory, their real property assets. The report is based on information collected from SDOTs during three separate one-day meetings convened in February and March 2012 in Austin, Texas, Charlotte, North Carolina, and Sacramento, California.[1] The report synthesizes the content of the meetings’ discussions in order to ultimately convey the components of an ideal property management system.

1.1 Property Management at State Departments of Transportation

State department of transportation property, sometimes called “ airspace,” includes the spaces located at, above, or below the highway’s established grade line and structures, along with property lying within the approved right-of-way (ROW) limits. In the past, an engineering-based mentality driving asset-based decisions led to a prevailing perspective that ROW was simply the land upon which transportation improvements were built. Now, SDOTs are increasingly viewing their properties as valuable assets as well, especially given the volume of properties they hold–in some states, the SDOT is among the top state agencies in terms of land ownership. Their properties are valuable resources that must be managed in order to ensure that highway improvements and their related facilities function safely and efficiently. As such, the importance of developing a precise and reliable understanding of what properties the SDOT holds; why the properties are being held; and where the properties are located is growing. Questions along these lines have historically been easier to ask than answer. However, the increased scrutiny and opportunity to leverage assets is leading to a renewed focus on the state of the property management practice at SDOTs.

“Property management” in the highway transportation context refers to the administration of property acquired for highway purposes to ensure that the public interest is served. It entails a variety of responsibilities from rental and clearance of improvements for a project to the leasing of improved airspace after a project is completed. Property management during the acquisition, or pre-construction, phase of a project involves the clearance of structures, improvements, pests, and hazardous materials from the acquired ROW. During post-construction property management, the owning agency has the opportunity to generate income from available airspace. As explained in FHWA’s Project Development Guide,[2] highway ROW is a capital asset that belongs to taxpayers, and the SDOT has a responsibility to conserve, protect, and obtain the highest return possible for that asset. This could include activities such as preventing encroachments, protecting access control, disposing of excess land, and renting property excess to current project needs.

1.2 Property Inventories

Effective property management practices can help protect the public and its investments. One component of the record-keeping process is the property inventory. Accordingly, each SDOT has the responsibility to maintain, lease, or sell its properties and to keep an inventory identifying where such lands are or, in the case of sold properties, were located. That inventory is not only essential to a successful property management program, but it is also required. Per FHWA’s property management regulation (23 CFR 710 subpart D) SDOTs should keep an up-to-date inventory of information on:

Since the parcels that SDOTs manage number in the thousands, SDOTs have developed computerized solutions to house their inventories.[4] Some SDOTs have highly functional, sophisticated tools to inventory their real property assets, while others are in the early stages of developing them or have chosen to use other tools, such as spreadsheets, to support the property management function. For example, some state transportation agencies have integrated Geographic Information Systems (GIS) into their ROW management operations, providing them with an accurate electronic record of parcels, sales, abandonments, trades, leases, encroachments, and road exchanges.[5] Others have yet to use GIS or other imaging techniques to map their properties and instead have opted to track their properties in “flat,” or static, files in software like Microsoft’s Excel.

Regardless of the method implemented and the costs associated with system development, the property inventory plays a key role organizing and overseeing the ample property assets SDOTs own or control. A limited or inaccurate inventory could result in a greater likelihood for unidentified uses or unapproved encroachments. It might also create lost opportunities for deriving income from leases or sales, among other unwanted or avoidable breakdowns.

Updated: 09/05/2014
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