When investing in commercial real estate, it’s important to understand zoning laws. Zoning laws determine what kind of buildings can be located in that zone or district. Zoning laws become an important consideration if you are thinking of re-purposing a property or planning to replace an existing building.
This article looks at the various factors that go into making up zoning laws.
What is zoning?
Every city will have a large plan what kind of buildings can be located in certain areas. Generally, zoning laws are to protect the general welfare of the residents and makes sure that land is used appropriately. This also helps the city to plan for appropriate infrastructure like water supply, sewers, and roads.
In general, each city will have commercial districts, residential districts, and agricultural districts. Some zones allow for a mixture of these types of building.
Comprehensive plan
Zoning laws also help cities to achieve their main goals. For example, if a city wants to attract high-tech companies, it could create a specific area with the appropriate infrastructure. This zone will also have to have good transport links to residential areas so that workers will have an incentive to move into the area.
It’s good to get to know what your city’s comprehensive plan is. This could help you find land that is planned to be redeveloped or areas of the city where expansion is planned. However, the comprehensive plan isn’t legally binding.
Zoning ordinance
The zoning ordinance is a legally binding instrument that specifies how land can be used. Generally, zoning ordinances can be divided into 3 main sections:
- The zoning district section which dictates what types of buildings can be there. For example, residential zone or commercial zones.
- Performance standards will specify standards relating to fencing, noise pollution, parking, heights of buildings, and suchlike.
- Administrative procedures are part of the zoning ordinance with stipulates how planning permission is to be applied for.
Rezoning
On occasion, the city can decide to rezone certain areas. This can happen if specific requests are made by individuals wishing to build property in an area where the zone has been set aside for other uses.
For example, you could put in a rezoning request to rezone land surrounding property you own. This is called “spot-zoning.” For example, spot zoning could allow for leisure facilities to be built in a residential neighborhood. However, you would not be able to rezone a district in a residential area if you wanted to build a large, multi-storey office block.
Of course, there is more to zoning than has been mentioned in this article. Zoning laws are full of complexities and each city or district will have its own variations of zoning laws. What works in one city, may not work in other cities. Therefore, before investing in commercial real estate, get legal advice on the zoning issues in your local area.
