When special assessments are to be levied by the percentage of the tax value of the property assessed or by the foot frontage of the property bounding and abutting upon the improvement and there are lots or lands subject to such assessment which are not assessed for taxation, the City Auditor shall fix, for the purpose of such assessment, the value of such lots as they stand and of such lands at the depth which he considers a fair average of the depth of lots in the neighborhood, so that the value so fixed will be a fair average of the assessed value of other lots in the neighborhood. Where lands are not subdivided into lots, but are assessed for taxation, the City Auditor shall fix the value and depth in the same manner; but the above rule shall not apply in making special assessment according to benefits.