The value of an existing single-family home is worth $400,000. The local zoning regulations would permit a four-unit rental housing structure to be built and the local demand supports the need for more rental housing. The demolition cost of the single family home is $50,000 and the construction cost of the rental housing is $100,000. Upon completion, the rental housing is worth $600,000. What is the propertys highest and best use (HBU) and what is the value of the property?

Single family home; $1,000,000

Rental housing; $450,000

Rental housing; $600,000

Single family home; $400,000