Let me start with a golden rule: location, location, location. When it comes to property they are not 'making' any more land. There is only one patch of dirt in any one location on the planet. The actual or proposed use is critical to understanding the value after location, location, location.

'Highest and best use' tells us that the specific location, the specific piece of dirt, will have its greatest value when the land is used for the right purpose. Maybe the highest value will come from grazing and farming or even a wind farm or a mobile phone tower.

The mineral rights or water rights associated with the land may have more value of what is above the land. In other situations, the structure attached to the land is where the bulk of the value is stored. That said it is the use of the structure that really creates the value.

A home, an office, a factory, a place to park cars or dock a boat are all uses which might define the value. Some of the time the government will decide that a road or other public facility is required so the government will buy out the existing owner for the current market value plus some premium.