Zoning restrictions impact both use and land value

On Behalf of | May 17, 2019 | Real Estate Disputes

Zoning restrictions can lead to complicated real estate transactions and even disputes when the restrictions are not clear or are misrepresented in some fashion. The reason that these situations are so tricky is that the restrictions from the city can have a massive impact on both the way that you can use the land and the value of that land.

For instance, a piece of land with no zoning restrictions has the highest value, in many cases, because it has the widest pool of potential buyers. Anyone can buy it and use it as they see fit. As soon as zoning restrictions start to come into play — saying that a property can only be used for manufacturing, for instance, or commercial enterprises — the potential pool shrinks dramatically. Anyone who has other plans for the development either has to look elsewhere or consider asking the city for a variance. A variance isn’t a given and many buys won’t want to deal with it anyway, so the value plummets.

The basic zoning restrictions divide property between commercial use and residential use. However, that over-simplifies the situation. There are also mixed-use buildings that can be for both residential and commercial projects. On top of that, within commercial zones, the type of business that a person can create may also be limited. You can’t assume that any commercial enterprise will get approved by the city just because it’s a commercial zone, as some may be strictly prohibited.

If you do find yourself involved in a dispute or trying to wade through a complex zoning issue, make sure you know exactly what legal steps to take.