Functional obsolescence can be caused by which of the following?

Functional obsolescence refers to a decrease in the value of a property due to changes in design, technology, or market preferences which make the property less desirable or inefficient compared to other properties. Over-improvement of the property is a clear example of functional obsolescence. This occurs when a property is enhanced beyond the typical standards or expectations for its neighborhood or intended use, leading to a situation where the improvements do not yield a corresponding increase in value.

For instance, if a homeowner adds luxury fixtures or amenities that are not commonly found in similar homes in the area, the property can become less attractive to potential buyers or renters who do not value those enhancements due to the market demands.

The other choices, while they can impact property value, do not directly link to the concept of functional obsolescence in the same way. Changes in neighborhood demographics might affect demand but do not inherently make a property functionally obsolete. Natural disasters can cause damage and lead to economic obsolescence but are not tied to the functional design of the property itself. Improper zoning can create legal issues but does not directly alter the physical function or design of a property. Therefore, over-improvement is the most relevant cause of functional obsolescence among the provided options.