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Zoning Issues

The below topics are discussed in much more depth
on our members' Zoning Issues page.

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Rental housing buyers often ignore zoning; a disastrous practice .

Zoning is the way the governments control the physical development of land and the kinds of uses to which each individual property may be put.

TYPES OF ZONING

      Zoning classifications are not the same from place to place. The most frequently-used groups are:

commercial

industrial

residential

agricultural

      These groups may be used in various combinations. Within each of the general categories are more narrowly defined divisions. For example, a residential zone might be segregated into separate zones for single-family homes on one acre, single family homes on a half acre, hotels, boardinghouses, mobile homes, low-rise apartment complexes, high-rise apartment complexes, or institutional housing. An industrial zone may be zoned "heavy", "light", or "research". A commercial zone can be divided into small stores, shopping centers, gas stations, restaurants, drive-in facilities, adult-entertainment districts, and warehouses.

DON'T TRUST THE SYMBOLS ON A MAP  

      Zoning symbols vary among communities. An R2 zone in one community is not necessarily the same as an R2 in another community.

ZONING ALWAYS AFFECTS VALUE

     The real estate adage that property values are determined by "location, location, location" . .  is true; in part because location usually determines the likely zoning. 
The highest and best use that a property can have is a factor of how it is zoned.

WHO CONTROLS ZONING?

      Zoning is a purely a county, city, or municipal function.

Administration

      Most communities administer zoning issues through their Community Development Director and a number of boards and commissions, usually including: Planning Commission and Zoning Board of Appeals.

ZONING LAWS REGULATE MORE THAN USE      

In addition to restricting the uses that can be made of land and buildings, zoning laws may also regulate the dimensional requirements for lots and for buildings on property located within the jurisdiction, the density of development, and whether you can keep certain kinds of animals.      

Spot Zoning:

      Spot zoning occurs when a small area of land or section in an existing neighborhood is singled out and placed in a different zone from that of neighboring property.

Contract Zoning: 

In some communities there is a practice that allows a property owner to enter into a written agreement with the local government to rezone certain areas of land, on the condition that the limitations or restrictions set by the town for those parcels are accepted by the owner.

Down Zoning:

      Rezoning of a track of land to less-dense uses is down zoning and usually reduces the value of the affected property.

Esthetic Zoning:

       One of the most rapidly expanding forms of zoning is the adoption of esthetic zoning regulation by some communities.

Historical Zones

      The federal government offers renovation tax credits for buildings that have been designated a "historical structure" by state Historical Societies. Communities expand the number of properties that can qualify for tax credits and grants by designating Historical Districts through the use of zoning.
      The zoning is a double-edged sword for real estate investors .

Buffer Zoning:

      Leaving a strip of land to develop a park, a small driving range, or even just grass and trees to separate commercial and industrial use from residential is becoming a common planning approach used by local government and developers.

ENFORCEMENT:

      It is usually risky to ignore zoning rules since the ramifications for zoning violations can be brutal.

However:

      For decades urban governments allowed, or looked the other way, as property owners cut up large old Victorian homes into a number of small apartments; although in most cases the homes were not in an area zoned for multi-family housing. Consequently, many investors have been caught in situations where they bought a building based on the cash flow from six or seven units, only to be told later that they are operating illegally and they will only be allowed to rent a much smaller number.

      In each instance, the surprised buyer would be compelled to apply to the zoning board of appeals for a variance. Depending on circumstances, the chances of success here are not great because the philosophy of zoning is to eliminate non-conforming uses; hardship notwithstanding.

      It is imperative that investors who contemplate the purchase of any questionable real estate get a written guarantee that the local government will continue to allow the non-conforming use and allow the property to be sold as non-conforming in the future.

      Buyers should personally check city zoning maps and ordinances. They can also request a certification as to the zoning status of a particular parcel.  If there is any doubt about zoning or use restrictions, it will be money well spent.

The above topics are discussed in much more depth
on our members' Zoning Issues page.

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