Let’s Talk About Zoning for Commercial Real Estate

commercial real estate zoning

If you’ve ever glanced at a land-use zoning map before, you understand why people don’t bring it up in conversation often — it’s complicated. Just look up the phrase “zoning maps” in your area of interest and you’ll see what I mean.

Despite the somewhat drab nature of the topic, zoning ordinances play a crucial role in restricting land use in municipalities across the United States. It varies from one jurisdiction to the next, but often, zones are divided into residential, commercial, industrial, agricultural and recreational-type uses.

Zoning ordinances have had a place in the United States’ history since 1926. In the landmark case of Euclid v. Ambler, the Supreme Court ruled in favor of zoning hard hat on commercial real estate blueprintordinances as a method of regulating growth and maintaining development that remains within the general interest of the public.

 

For commercial investors, it’s important to know that zoning ordinances regulate the type of business as well as property appearance, such as size and height, permitted on the land. And despite the practices of previous tenants, you’ll need to make sure you’re willing to abide by the law and be aware of your options before signing a lease.

Local municipalities often grant a variance, or special permit, to a property owner for a specific use that falls outside of zoning restrictions. On other occasions, tenants are exempt from restrictions if they’re occupying a property at the time the ordinance was passed, leaving it up to the next to align with the rules.

Municipalities also consider conditions to zoning ordinances at their own discretion. Often, you can include a contingency clause within a lease to preclude neglecting details of a zoning ordinance in your area of interest.

mock up for commercial real estate zoning

Jurisdictions at the county level monitor land-use regulations outlined in zoning ordinances. To gather details in your market, contact your local planning and development service agency with questions.

As an aside, The National Association of Realtors has developed a field guide, riddled with expert articles on the subject. I implore you to take a gander: https://www.nar.realtor/field-guides/field-guide-to-zoning-laws-ordinances.

Be sure to do your homework before signing a lease. The next time you’re scoping out a market of interest, take a close look at what zoning options are available. It could sway your dollar in a whole new direction.

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