Understanding Zoning Laws
Jesse King | June, 2024
As a commercial real estate broker specializing in multifamily and mixed-use land, I frequently encounter the complexities of zoning laws. These regulations play a pivotal role in determining how land can be used and developed, making them a crucial consideration for any investor or developer in the commercial real estate market.
What Are Zoning Laws?
Zoning laws are municipal or local government regulations that dictate the use and development of property within specific areas, often referred to as “zones.” These zones can include designations such as residential, commercial, industrial, agricultural, and mixed-use, each with its own set of rules and restrictions. For instance, a commercial zone may permit the development of retail stores and office buildings but prohibit residential housing.
Why Are Zoning Laws Important?
1. Guiding Development: Zoning laws provide a structured framework that helps guide the orderly development of communities. They ensure that land use is compatible with surrounding areas, which can enhance the quality of life for residents and contribute to the overall aesthetic and functional integrity of the community.
2. Protecting Property Values: By regulating land use, zoning laws help maintain and potentially increase property values. They prevent incompatible uses, such as industrial facilities in residential neighborhoods, which could otherwise lead to conflicts and reduce property values.
3. Preserving the Environment: Zoning can include provisions for protecting natural resources and managing environmental impacts. For example, certain zones may restrict the density of development to preserve green spaces or protect water sources.
4. Facilitating Economic Development: Proper zoning can attract businesses by providing designated areas for commercial and industrial activities. This can create jobs and stimulate economic growth, making zoning a critical tool for economic development strategies.
Key Considerations for Commercial Investors
1. Understand the Local Zoning Ordinance: Each municipality has its own set of zoning regulations. As an investor, it’s essential to review the local zoning ordinance to understand what is permitted on the property and any restrictions that may apply.
2. Zoning Changes and Variances: In some cases, you may seek to change the zoning designation of a property or request a variance to allow a specific use that is not typically permitted. This process can be complex and often requires approval from the local zoning board or planning commission.
3. Impact on Development Costs: Zoning laws can influence development costs significantly. For example, requirements for setbacks, parking, and landscaping can add to the cost of developing a property. It’s important to factor these considerations into your project budget.
4. Community Engagement: Zoning decisions are often subject to public input. Engaging with the community and understanding their concerns can be crucial, especially if you are seeking a zoning change or variance. Building positive relationships with local stakeholders can facilitate a smoother approval process.
Final Thoughts
Navigating zoning laws is a fundamental aspect of commercial real estate investment and development. As a land-focused broker, understanding these regulations is essential to guiding clients through the complexities of the market and ensuring that their projects align with local requirements. Whether you’re looking to purchase, develop, or invest in commercial land, a deep understanding of zoning laws will be invaluable in making informed decisions and achieving successful outcomes.
I can’t tell you how many times I hop on a phone call with a broker and get told something to the effect of “great site for MF” or “prime industrial opportunity” only to find out that the zoning and future land use don’t support that use type. While a comprehensive plan amendment could be an option around this, this takes time and I have had the opportunity to educate sellers and other brokers about what this looks like. Please reach out should you have any questions on zoning or best and highest use for your property!