How Does a Change in the Development Intensity Index Affect Land Value?

Purpose: This study aims to determine the market value of land when the development intensity changes due to planning regulations. This issue is particularly relevant in situations where direct comparative analysis is limited due to an incomplete or restricted real estate market. Design/Methodology/Approach: The study employs a literature review, case study, and valuation methods, including: (1) analysis of planning conditions before and after regulation changes; (2) collection of comparable land transaction prices; (3) market analysis of land use and development intensity; (4) comparative approach for the after changes scenario; (5) Tiemann’s formula for the before changes scenario; (6) validation with market data. Findings: A change in planning regulations that reduces the permissible development intensity also reduces land value. In the analysed case, the property’s value dropped by almost 40%. The study confirms that higher development intensity corresponds to higher land values and demonstrates that the adopted methodology yields results consistent with observable market prices. Practical Implications: The proposed valuation method is applicable in markets with limited transaction data, enabling more accurate estimation of land value under changing planning conditions. It supports property valuers, municipal authorities, developers, and policymakers in assessing the financial implications of zoning changes and making informed investment or compensation decisions. Originality/Value: The paper presents a method for valuing land in restricted markets by combining comparative approaches with Tiemann’s intensity adjustment. This method addresses its underuse and provides a replicable solution for similar contexts.