They have to try to look for comps (usually none), look at what market rent is in the area, calculate NOI and value under the income approach, calculate a rebuild cost, etc. 

I think if you took a ride down to the coast and interviewed people looking to rebuild the hardest hit areas of Katrina they would share my theory that the TRUE Go Zone incentive is to rebuild the coast.

But for the icing on the cake, feast your eyes on what the Prudent man would invest in during times of rebuilding one's balance sheets, Treasury Bills.

The city does need full injection of funds to rebuild the failed and failing infrastructure.Thank 

When we rebuild this place as we will one day I look to get out of electric baseboard.

So I am rebuilding an old sports car to kill the time until we get out of here.

We are looking to do our first new construction. inventory is tight in intown Atlanta especially parts of Decatur.We are getting ready to do our first tear-down and rebuild in Atlanta (in-town).

BTW all the people casting doom and gloom for companies like Tesla, should get a life as the brilliant guys like Elan Musk, who have founded multiple successful companies just don’t fade away in oblivion and will keep on innovating and rebuilding the world.

Is it best to do a total gut or tear down and rebuild?

and then re-building the entire house under neath.Lesson number 2 - in hindsight we should have dozed the house and started fresh with a larger new house.However we learned alot about the process, construction, changing direction when things go wrong, being flexible and rolling with the punches.We ended up with a nice place that we paid almost 100% of the appraisal price for, but we only owe 40k and it cash flows well.