If you tenants know you own the building, and they are already needy tenants, it can be burdensome for you being that close for them to knock on your door, and presumably you are going to want to live in a specific neighborhood(s) so you are a little more limited in your options.If you, personally, are comfortable with either, then it comes down to actual opportunities available.  

We actually have two lots will be building the second duplex later this year.

It's much much tougher now to find a deal that'll actually compensate you for the work.

That actually makes me think I should reach out to some property managers and SF owners and see what their average annual maintenance costs are.

1) Online esimates are estimates and your actual appreciation can be less or more.2) While $25,000 - $40,000 of apprecation sounds exciting, it will likely be eaten up by selling costs at the time of sale assuming the price of the home is $400,000 assuming 8% as the cost to sell the home(6% realtor costs and 2% other selling costs).

The development of actual buildings creates huge depreciation potential.4.

I know it's been a hot topic forever, but is there any real traction happening currently that could actually make it to the top for approval?

Once you have found your deal using your simplified analysis, only then do you need to get into the nitty gritty and see if it actually is a good fit for your needs. 

Actual size is 2.81 acres.  

I was thinking about that actually, my best case scenario would be to find an off-market property and use sellers financing, or at least one of those.