There is absolutely no justification for this.

The justification for eminent domain would be the cost of defending the current set up, health costs and environmental cleanup costs. 

Assuming you raise the rent over comps (with justification), you should be able to break even or come out ahead because of the seasonality in the Mid-South...too hot to cut in the summer, too cold for growth in the winter.

I’m not arguing the necessity, or the fairness, or the justification of taxation, consumer protection, civil rights, etc, just stating the effect is distortion in the market.But, as I stated the taxation of a 0 - 20% rate on capital gains (ok 3.8% - 23.8%) is not only very low by the standards of the last 84 years, but also preferential to the marginal rates on earned income, investment income, and short term capital gains.  

What is the primary justification for them trying to implement something like this? 

Call the buyer's agent when the appraiser makes the appointment and ask if they can meet the appraiser with their price justification packet. 

. = $6.0M – $7.1MStep 3: Justification of ARV at $7.1MWaterfront Location: High demand for oceanfront properties in Jamestown.Luxury Market Trends: High-end buyers are paying $1,200 – $1,500 per sq. ft. for new construction.Comparable Sales Support: 4 Dewey Ln and 597 Beavertail Rd confirm the $1,500/sq. ft. estimate is realistic.Low Inventory: Waterfront lots in Jamestown are scarce, increasing property value.Your ARV analysis looks pretty solid based on the comps you’ve used.

I’m just waiting on a quote from an electrician and HVAC technician so that I can give them some justification for my numbers, if need be.

In the video I show how I end up replacing most of the suggested comps with comps pulled from Redfin and the justification behind it, but the punchline is that it helps you come up with an accurate number doing what @Hem Kumar said: "...make adjustments for unique features and amenities..."

If there is only one coming into the building this could be justification of one loan however may not work.