The End of Highest and Best Use

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Highest and best use is one of those industry jargon phrases that has come to bear the weight of law. But when is the last time you were somewhere and said, “WOW, this place really is the highest and best use?” The phrase has become meaningless and, worse, dangerous when we apply it to how places change. It suggests waiting until a mythical perfect time to start while we overthink projects and clear out inherited places, buildings and cultures that do not conform to an academically derived end-state of highest and best use.

Instead, we have adopted layering as one of our core operating principles. The most impactful, interesting and memorable places are not a monolithic optimization of highest and best use but a layering of artfully practical decisions that became higher (ie more diverse and complex) and incrementally better (ie more beautiful and valuable) over time. And they are almost never thought of in terms of use but in terms of culture, experience, beauty and value. Layering is inherently an inclusive and diverse incorporation of these elements where highest and best use is not.  

Whether we are doing a 200-acre master plan for a new district or an infill growth strategy for an older one, we have found the following advantages of layering:

Get started with confidence

Highest and best use suggests we build a hypothetical ideal at whatever cost right out of the gates without going through any of the intermediate states of growth. A layering approach suggests getting to work at a smaller scale sooner without being overly concerned about long-term opportunity cost. If we can get a project going, generate cash flow and get to market quicker, we need not wait to shoot the moon. And because we did not over invest, we can modify or even replace this initial investment in the future without losing our shirt.

Manage change

We are in the change management business. On one hand, we want to make sure we are growing and bringing about positive change. On the other, we want to make sure that the lives we are now part of are able to ride that change. Highest and best use simply takes too long and comes out too big at one time to be smart. Perhaps more problematic, it often comes as a shock to the neighborhood it is part of when it does eventually happen. Layering brings smaller, more digestible phases online sooner that helps both the market and the neighborhood absorb it easier. It also prioritizes adapting existing streets, spaces and structures rather than starting over. This allows a connection to the past when building new which is easier to be part of if you have been living with that previous condition - good or bad - for years.

Build interesting places

People are drawn to places with character. Character is derived from many small moves instead of a few large monolithic ones. Highest and best use is characterless as it implies waiting until the largest defensible project can be realized. Layering, however, accrues more character as it realizes scale and complexity over a greater number of phases. At each phase, it makes the most out of what came before.

Be resilient to an unpredictable future

Highest and best use assumes little in the way of change, that everything from our households to our businesses are static. But change is not only a reality, its pace and unpredictability is accelerating. Layering is smarter in that it accepts that each move is both a confirmation of what came before and a test for what might be ahead.