For instance the City of Corpus Christi, Texas recently finished a widening of a street behind one of the shopping malls. This required condemning the corner house on several of the cross streets to gain the additional real estate to expand the street from two lanes and an open drainage ditches to two lanes each direction plus a middle turn lane. It was a much needed improvement to relieve traffic on nearby streets, but several of the home owners were not happy with the amount paid for their property. Most were not able to buy similar houses in equivalent neighborhoods without going further into debt than they already were. Others were retirees who had paid off their mortgages and had intended to live the rest of their lives in those homes. Considering the benefits to nearby businesses and people driving by the area, I don't see why they shouldn't have been paid at least the value of commercial realestate for their land.
That would be a valid approach. Value the right-of-way as if it were commercial parcels. That would knock the value of residential property into the big leagues.