THE SIGNAGE FOUNDATION FOR COMMUNICATION EXCELLENCE, INC.

Whether signage may be a causal factor in lowering the income potential of a real estate parcel was the subject of study by the outdoor advertising division of the California Department of Transportation. The division employed the appraisal firm Haskell Berry to determine if the presence of outdoor or third party signage (billboards) adversely affected the income potential of other commercial activities sharing the site. The purpose behind the study was to ascertain how much monetary compensation, if any, must be paid to the outdoor owners when the outdoor signs had to be removed via a regulatory taking. At the time, many in CDOT argued that outdoor signage reduced the property value and/or income potential of adjacent businesses and sites; they further argued that because removal would increase property values and income potentials, removal should not be compensated monetarily. Researchers found no basis for the argument that outdoor signage decreased land values or income potentials. On the contrary, it was concluded that signage had no adverse affect on either the property value or income potential of adjacent properties. An additional conclusion was that all types of signage increased site economic productivity and sales for the businesses to which each type referred.

The Federal Highway Administration, in implementing the 1965 Highway Act, mandates monetary compensation for the taking of outdoor advertising along the interstate highway system. The federal compensation schedules are based on extensive research on the economic value of outdoor signs to the businesses they advertise. One study heavily relied upon was the California study mentioned above. (Also, see the 1970 Property Relocation and Acquisition Act and the "Legal" chapter.) As consumer mobility and discretionary income increases, the compensation paid for the taking of outdoor structures has also increased significantly.