What You Need to Know About Zoning
Simplifying a complicated but essential concept in real estate
Zoning laws are vastly important because they determine what kind of structures can be built in certain areas and whether or not an existing structure can be replaced with something new at all, among other important guidelines. If this does not directly pertain to you it may to your neighbors, which inherently will have an impact on your property. Thus, it is very important to understand the concept of zoning and how it can affect your property, whether or not you are attempting to make alterations. Zoning is also great to know in case you are trying to prevent certain changes from happening. Regardless, it is a very essential aspect of real estate to understand and we will make the entire concept easy to understand by detailing it through this blog post.
To start with the basics, zoning is the legislative process for dividing land into ‘zones’ or sections for various uses. Zoning laws are the laws that regulate the use of the land and determine what kind of structures can be built upon said land. The general purpose of these laws are to build structures so they are in the accordance with the best interest of the general public. This best interest typically constitutes protecting the health, welfare and general safety of the people as it pertains to land use. The laws regulate the impact of land use by:
- Protecting the value and enjoyment of properties by allowing a property its most appropriate land use given its location and surroundings.
- Protecting the value and enjoyment of properties by separating incompatible land uses and minimizing their potentially negative impacts upon each other.
- Providing for the orderly development of a city, including making provisions for land uses in the best interest of its citizens.
- Providing adequate public infrastructure (roads, sewers and water).
Cities are very diverse places, which is one of the most appealing reasons to live and be in a city. However, there must be a response to this diversity to ensure there is no negative overlap that will become a hindrance to residences and businesses alike. For example, cities need industrial services as well as residents to house workers that drive the industry in the city, among other sectors. The essential goal of zoning is to make sure everything in the city is compatible… compatibility ensures comfort to the people. Therefore, zoning laws dictate where is best to reserve space for residential buildings as well as where is best to have commercial properties. It is unlikely that you would like to wake up next to a construction warehouse every day of your life. Thus, zoning separate commercial areas and residential areas so both parties can operate freely without the hassle of knowing the other is being bothered. These zoning laws are essentially the blueprint to how the city will grow, ultimately resulting in various districts. This is evident in almost all modern cities, this congruity among districts and isolation of various sectors (financial, shopping, diamond districts, etc.). More specifically, the zoning laws regulate:
- How districts can be used (residential, commercial, agricultural),
- What types of buildings/structures can be constructed within the districts (size, # of stories, configuration, etc.)
- Where structures can be located and,
- What measures the landlord must take to further compatibility with neighboring uses.
Because cities are fast paced environments that evolve quickly, zoning also provides flexibility for changes that are inevitable (ie. building of bridges/other infrastructure, emergency flood control, etc.). Now we will elaborate on how zoning works.
The Comprehensive Plan
For zoning to work effectively, a long-term approach must be taken to map out cities. Thus, the comprehensive plan is essentially a master long-term plan that maps out the desired social, economic, and physical development of the city. The plan itself is not legally binding, but is an essential framework to the ordinances that will be binding. To make the plan, a city considers what it wants regarding land use and how infrastructure will be coupled with these needs. Certain cities are better fit for certain industries and they will take the necessary measures to allocate land to suite these industries. Look at the comprehensive plan as a blueprint to how cities will be ‘built’.
What is in the Plan
The Comprehensive Plan is a collaborative effort driven by public officials, planning professionals, city staff, planning commissions, and the city’s governing body. Input from the public and those who hope to develop certain types of properties, etc. is taken into consideration and coupled with the expertise of professionals to begin drafting a plan. The plan itself has a wide variety of content. Pictures, words, and maps are all included to explain where streets, sewers, and infrastructure will all go. The limitations on all structures and infrastructure will also be explained throughout the report. Overall, this is very important stuff to be aware of and to get your opinion across because if you are a landlord who may want to expand parts of your property or simply develop something new in general, you will need to know how the comprehensive plan will affect your aspirations. Also you would like to know which parts of the city will suit your potential development plans. The plan in general and how it impacts your properties could dictate the overall value of the neighborhood you are in, which is also very important to landlords specifically.
The next step to solidifying the ideas within the comprehensive plan is the zoning ordinance. The ordinance is the local set of regulations governing land uses and structures within the local government’s (county, city, township, etc.) boundaries. The creation of the ordinances follow the same structure of the comprehensive plan collaboration. Public hearings are held to tackle the populations needs and issues and this input is debated among consultants, professionals, officials, and commissions. This process is repeated over and over again until final approvals are made. It is important to remember that the ordinances are now legally binding. They have evolved from preliminary ideas to concrete laws to abide by.
Generally, zoning ordinances cover three specific areas: 1. Defining different types of use districts (commercial, residential, etc.) and regulating these uses, 2. Standards section defining regulations that apply to all districts (noise, parking, fencing/signing, etc.), 3. Administrative section outlining the procedure for requests under the ordinance (notices required for permits, number of days involved in approving rezoning, etc.). These ordinances as well as the comprehensive plan associated with any city can be found on that city’s official website or by contacting their respective City Hall offices.
The broadest use categories when it comes to zoning ordinances are commercial, residential, industrial, and agricultural. Because not all residential and commercial uses, etc. are the same, each of these general use categories are divided into more specific sub-categories or districts as needed. Lets use residential use as an example to show what we mean. Residential categories can be split into R-1 for single-family on less than 1 acre of land, R-2 for single-family on less than 0.5 acre of land, R-M1 for multi-family with a density of 50 units per acre, and R-M2 for multi-family with 100 units per acre. This same concept applies to all other use categories as well. There are also districts designated for more special circumstances. These include floating districts, mixed-use districts, and planned use districts:
Floating Districts: districts that are permitted under the ordinance, but have yet to be placed on the zoning map. These districts are designated for more unique land uses that are anticipated in the future, but no location has yet been allocated. These unique land uses could be anything from entertainment centers (think Broadway/theater district) to intense industrial sectors. Floating districts can also include areas that may need special protection such as floodplains or historic districts. These districts float around until a specific site designed for the specific use is identified.
Mixed-use Districts: These districts allow for a combination of broader use categories often found in downtown areas in major cities. This is where you will find the majority of your mixed-use buildings with commercial spaces on the street level and residential spaces on upper stories. A great example is between the Midtown East and Upper East Side districts of New York City.
Planned use Districts (PUD): Type of mixed-use development that has a cohesive design plan associated with it. These are typically mixed-use buildings with retail/office and residential spaces. To encourage these developments, a city may wave certain regulations that would otherwise be required of individual uses. This is done to allow flexibility in the design of the development.
Just like the ordinances themselves, when dealing with any municipality or city governing body, the land uses mentioned above must be reviewed and approved by the ruling bodies. Once permitted, the ordinances tell you exactly what can and cannot be built to accommodate your specific use. Some of these regulations include the size, density and location of structures within a certain parcel of land. Associated with these regulations are what we call ‘trickle-down’ limitations. These limitations include parking and green space requirements, if these are necessary to have in your plot of land. In some, if not most situations, these are required.
Applications must be made for rezoning and the procedure is the same as the ordinances and the comprehensive plan. As we mentioned earlier in this post cities are rapidly growing and evolving. Thus, rezoning is simply an inherent part of the growing process of cities. Ordinances work for some time until certain amendments must be made to accommodate changing industries, growing populations, as well as evolving technology, etc. In some cases the rezoning is not in compliance with the ordinances of the city but are allowed as they improve neighborhoods and work in the best interest of the public. One case would be the concept of spot-zoning. Spot-zoning occurs when a parcel of land is zoned differently than its surrounding uses, but is allowed as it serves a public benefit. A great example of this is obtaining a permit for a school in a residential neighborhood. Though the school is obviously not residential, it makes perfect sense to have one in close proximity to where people live. Thus, this would be allowed by zoning committees. The same goes for having a gas station in a residential neighborhood. It simply makes practical sense and improves the livelihood of residents nearby.
As you can see there is a lot that goes with the concept of zoning. It is quite complicated and we hope we did a decent job of making it a bit easier to understand. Now, it is important to understand that we are simply grazing the surface. We have yet to dive into the details involved with how ordinances are exactly enacted as well as an in depth look into all the parties involved with mapping out a city. However, we touched on all the major points you should definitely know if you want to begin to understand zoning and how districts in cities emerge. Regardless of if you are a landlord, tenant, investor, developer, etc. if you are in real estate you should know these concepts as they can strongly dictate your comfort living or your success investing in real estate.