Real Estate Investing Article Zoning
Without a doubt, the single most important thing to know about a development property you’re thinking of buying is its zoning. That’s the starting point for your evaluation because it tells you how you can use the property.
By enacting land use laws, state legislatures delegate to local governments the power to regulate development within their borders.
This regulation takes the form of local and county zoning, subdivision and other ordinances that implement the municipality’s overall land use plans and objectives.
Land development laws vary not only from state to state but also among municipalities within each state, so there’s no “one size fits all.”
The zoning ordinance contains classifications intended to cover different categories of residential, commercial, industrial, institutional, office, agricultural and conservation uses and the accompanying zoning map shows the geographic boundaries of the zoning districts.
To determine a parcel’s zoning, locate the property on the map and then review the ordinance (both of these documents are available at the municipal office).
You’ll find provisions for use, dimensional, area and other requirements listed under each of the zoning districts.
There are also general provisions that apply to every classification dealing with issues like non-conforming lots and uses, accessory structures, flag lots, fencing, signage and minimum lot frontage requirements. You should always read the chapter on definitions since it will help you understand the terminology that is used throughout the ordinance.
Uses listed in zoning districts often include those that are permitted “by right” as well as conditionally. For example, single-family detached dwellings, agriculture and governmental recreation areas are permitted in one district.
These are listed as by-right uses so they don’t require any zoning approval. Privately-owned riding academies, public or private day schools, 18 hole golf courses and places of worship are also permitted in that district but only when authorized by the municipal zoning board as a special exception.
These “special” uses are not permitted automatically. To get the special exception, you would have to demonstrate that your use falls within those defined in the ordinance and that it complies with any use-specific requirements, such as minimum site area, building coverage, buffering and parking.
“Rezoning” and “variance” are often used interchangeably, but they are not at all the same. A change of zoning is just that – the zoning of a property is changed from one classification to a different one.
Municipalities are not required to change a property’s zoning (absent a law or court order), so rezoning a property is not a slam dunk. In fact, depending on the state’s laws, the governing body may not even have to grant a hearing on the rezoning petition or justify its decision to deny it.
A variance, on the other hand, is relief from some zoning requirement. It modifies an ordinance provision as it applies to a specific property for a specific reason, but it doesn’t change the underlying zoning classification of that property.
To get a variance you would have to show the municipal zoning board that an unreasonable hardship (one you didn’t create in the first place) would result if it weren’t granted. You won’t get it, however, if your only argument is that you’d lose money, because the hardship has to be something other than economic.
A classic example of a situation in which a variance would be granted is where the parcel has some physical characteristic that would make it impossible to satisfy zoning requirements. Suppose, for example, that you wanted to build on a 100’ x 200’ parcel and the zoning required front, side and rear yards of 60’, 20’ and 80’, respectively.
Below is a video by Yale Professor Wargo discussing Land Use Law and Property Rights.
This means that the structure would have to be located within the “building envelope” which is the area of the lot after measuring off those setbacks. But the right side of the parcel drops off sharply and the steep slopes cut the building area in half.
The back third of the lot is relatively level, but most of this area lies outside the building envelope. Reducing the rear yard not only would create a building area large enough to accommodate your structure, but it would also be the least intrusive solution to the problem. So in this situation, the municipal board would probably give you a variance to allow the structure to encroach slightly on the rear yard.
Finally, some words of caution. Zoning and other municipal codes are available online. Don’t rely exclusively on this information.
Go to the municipality and review the ordinance or zoning map to make sure you have the most current and accurate information. And always page through the entire ordinance. Amendments that have been enacted are often printed in the back of the book without cross-referencing the provisions that have been changed.