What is Zoning?

Zoning consists of a set of regulations that control how land is used, including what types of buildings can be constructed, where they can be built, and what activities can take place there. When you buy an investment property, you’ll want to make sure you can use it the way you want.

Zoning regulations divide an area into separate zones that each have different rules for use. These regulations define building height and materials, lot sizes, parking, noise, and how close people can build to each other. The purpose of zoning is to reduce conflict and protect the public good.

These regulations also determine what kinds of things can be built on a property, how close it can be to neighboring properties, and its possible hours of operation. As a product of zoning, cities are divided into districts with specific residential, commercial, and industrial uses. The city planning commission decides what can be built in each district. Zoning laws are determined and approved by the local governing authority, usually at the municipal level.

Zoning Symbols and Differences

Zoning symbols each represent a different zoning category, and each has its own rules that apply to all properties within the category. The most commonly-used zoning categories include Residential, Commercial, Industrial, and Mixed-Use.

Residential

Residential is the broadest zoning category and includes all properties used for residential purposes. This includes single-family and multifamily homes, duplexes, townhomes, condominiums, and apartments. Residential zones also include properties used for single-family detached homes, nursing homes, and convalescent homes.

Commercial

Commercial properties primarily produce and sell goods and services to the general public. Commercial zones include factories, warehouses, office buildings, department stores, and shopping centers.

Industrial

Industrial properties primarily produce goods and services for internal use, such as manufacturing, research, development, warehousing, or processing. Industrial zones include factories, warehouses, and power plants.

Mixed-Use

Mixed-use zoning permits commercial and residential uses within single or multiple properties. This zoning typically includes properties such as retail stores with residential apartments above the store or office buildings with commercial and residential units.

R1 Zoning

R1 zoning is the most restrictive form of residential zoning and is used for single-family detached homes. R1 zoning is commonly found within a larger residential zone such as an R-MH (multi-family) zone. In addition, R1 zoning typically exists in areas where the surrounding properties are either commercial or industrial, as well as in areas where existing residents are opposed to new residential construction.

R2 Zoning

R2 zoning permits the construction of single-family homes on lots smaller than standard ones for R1 zoning. This is usually found in areas with many existing homes near commercial or industrial uses, where there is a need for smaller lots. In these cases, residents typically don’t want the noise associated with more significant commercial or industrial properties.

R4 Zoning

R4 zoning is essentially commercial zoning with smaller lot sizes and higher building restrictions. R4 zoning is typically found in areas near commercial and industrial uses where there is a large amount of commercial and industrial zoning and limited developable property on which to construct new commercial or industrial buildings.

Common Zoning Laws

Though specific zones and use cases vary across cities and states, there are three stipulations that are common to most zoning laws across America.

• Maximum Lot Size: Most zoning laws specify a maximum allowable size for a given lot. If a property is divided into two or more lots, the total size of those lots must be smaller than the maximum allowable size specified in the zoning laws.
• Minimum Lot Size: Some zoning laws specify minimum allowable lot sizes. If the zoning laws require a smaller lot size, the minimum allowable lot size must be used.
• Building Height: Building height is defined as the distance from the ground to the highest part of a building, including the roof and any other architectural elements. Zoning laws usually specify the maximum allowable building height for a given zoning category.

Zoning Ordinances

Zoning ordinances are the written rules and regulations associated with a particular zoning category. They include the following:

• Purpose and intent: The purpose and intent of a zoning ordinance are to guide and regulate a city’s land-use planning by identifying areas appropriate for different uses, regulating the type and quality of new construction, and encouraging and promoting socially responsible land uses.
• Districts:  Land is divided into districts based on the type(s) of land use appropriate for a specific area.
• General standards: General standards that apply to all zoning districts. For example, general standards may include lot size, building height, and setback requirements.
• Special standards: Unique standards that apply only to specific zoning districts. For example, certain standards may include provisions related to parking, building materials, and the timing of demolition.

Real estate zoning is an essential aspect of real estate investment. It is important to understand the zoning of a particular property to understand the types of uses that are permitted on the property, such as the type of housing that can be built on the lot, what types of commercial businesses can be built close to the property, and what types of utilities can be built in the area. Learning the zoning designation of a property should be part of any real estate investor’s due diligence process.