In the building residual technique, what assumption does the assessor start with regarding land value?

In the building residual technique, the assessor fundamentally assumes that the land value is a critical component that underpins the overall valuation process. This technique involves estimating the value of a property by considering the income that the property generates after deducting the costs associated with the building itself. Essentially, the approach posits that the value of the building (or improvements) is determined by the income it produces, while the land value must be a separate, fundamental element in this equation.

By treating land value as a fundamental assumption, the assessor recognizes that even if a building has a certain revenue-generating capacity, the land it sits on also has intrinsic value that should not be overlooked in the valuation process. This perspective ensures that the analysis considers both the land's worth and the improvements made upon it, ensuring a more comprehensive assessment.

While the other options may touch on aspects relevant to property valuation, they do not encapsulate the primary, foundational role that land value plays in the building residual technique. The emphasis on the land's fundamental assumption is crucial for arriving at an accurate and fair value assessment within this framework.