Do You Know the Fundamentals of Zoning Rules? Here’s What You Need to Know

Key Takeaways:

– Understanding zoning is crucial for successful real estate development projects
– Zoning designations vary but generally include residential (R), commercial (C), and manufacturing (M)
– Zoning parameters include height restrictions and floor area ratio (FAR)
– Setbacks, such as side, front, and rear distances, shape urban structures
– Unit density limits the number of residential units allowed in an area
– Affordable housing initiatives can increase zoning parameters and project scope
– Neighborhood ordinances regulate urban development and balance community values and development objectives
– By-right development adheres to zoning parameters, while discretionary review allows for closer scrutiny and community input
– Zoning approval processes can vary in length and complexity
– This article is a summary and further discussions on zoning will be available in a future article.

BiggerPockets:

Embarking on a ground-up development project may seem like a monumental task, but the opportunity to build something entirely new makes it one of the most exhilarating ventures in real estate. But, at the heart of any successful development analysis lies a thorough understanding of zoning.

This guide will dissect the key facets, from general zoning classifications to intricate parameters such as height restrictions, setbacks, unit density, and the critical interplay of community incentives and neighborhood ordinances.

General Zoning: Decoding Designations

Zoning designations are slightly different in each city, but they share some common ground. In the code, like R3, the R means residential use—usually no offices or retail. The number 3 signals more density and height are allowed compared to, say, R2. Similarly, C means it’s for commercial, and M is for manufacturing. 

These simple designations help us understand the basic rules of land use in any city.

Zoning Parameters

Here’s a look at some specific zoning parameters. 

Height restrictions and FAR

In most cities, there are designated areas for single-family homes (SFH), typically zoned as R1 or R2, where only single- or two-story structures are permitted. Multifamily buildings and taller structures are usually allowed in areas zoned as R3 or higher. For instance, in densely populated cities like New York, residential zones can go up to R10.

Some zoning allows for unlimited stories, but in these cases, your building’s height is constrained by the floor area ratio (FAR). FAR sets the limit on the total gross building area permitted. For example, if the zoning permits a 10,000-square-foot (sf) building based on the FAR and each floor covers about 2,000 sf, you’re restricted to constructing around five stories without surpassing the FAR limit.

Setbacks

Zoning regulations use building setbacks—side, front, and rear distances—to shape urban structures. By defining these setbacks, zoning codes balance land use efficiency with preserving the surrounding environment’s character.

Side setbacks maintain space between buildings, preventing congestion. Front setbacks enhance streetscapes, creating visual buffers and allowing space for trees and bike parking. Rear setbacks ensure privacy and outdoor space separation. 

Some urbanized cities in San Francisco and New York have no building setbacks, and you can build directly against the neighbor’s property. On the other hand, Los Angeles requires at least 5 feet on the sides and 10 feet in the front and rear.

Unit Density

Unit density dictates the maximum number of residential units allowed in a given area. This restriction is a crucial aspect of urban planning, influencing the overall population density and character of a neighborhood. By setting specific limits on unit density, zoning aims to balance the need for housing with considerations such as infrastructure capacity, traffic flow, and the preservation of community aesthetics. These restrictions play a vital role in shaping the social and physical fabric of a locality, ensuring sustainable, harmonious development.

Snippet of Los Angeles zoning summary
Snippet of Los Angeles zoning summary

Incentivizing Urban Development Through Affordable Housing

In transit-oriented neighborhoods, capitalizing on affordable housing initiatives strategically amplifies unit density, building height, FAR, and other zoning parameters, thereby expanding the scope of your project. If your development lies within a half-mile radius of a metro station, it’s probable that established policies facilitate augmenting zoning parameters by allocating a specific percentage of units to affordable housing. 

For instance, dedicating 10% of your units to low-income housing may translate to a 40% increase in unit counts and a 50% rise in FAR, effectively allowing your project to grow by up to 50%. Even in the absence of preexisting policies, proactive engagement with the city could result in negotiations for incentives. 

While not a by-right entitlement, such negotiations are often successful due to the general municipal inclination toward fostering affordable housing. Moreover, state-level incentives may also be accessible to bolster your project’s viability.

Neighborhood Ordinances: Harmonizing Community Values and Development Objectives

In each neighborhood, the presence or absence of a neighborhood ordinance plays a pivotal role, serving as the regulatory backbone for urban development. Understand how these ordinances strike a balance between community interests and the imperative for progress, ensuring the evolution of neighborhoods aligns with their distinct character.

Locating these ordinances isn’t always straightforward. While some are conveniently accessible online, from sources like the zoning map or the city’s website, others necessitate direct contact with the city’s planning staff. 

The content of these ordinances varies widely; some may span just a few pages, delineating specifics like building height limitations or transitional requirements from single-family home lots. In contrast, others may extend up to a hundred pages, imposing detailed criteria encompassing design colors, historical features, shapes, and materials. 

Remember: The lengthier the ordinance, the more time-consuming the approval process, necessitating careful consideration.

By-Right vs. Discretionary Review

In general, adhering to specified zoning parameters categorizes your project as by-right, alleviating the need for discretionary reviews and neighborhood hearings by the planning department. However, exceptions exist, and legal challenges may arise, stemming from concerns like environmental, traffic, or historical impacts. 

Interestingly, even if your project aligns with zoning parameters, larger developments may necessitate discretionary reviews imposed by the city. Notably, certain cities uniformly mandate discretionary reviews, even for a single-family home, a practice more prevalent in smaller cities.

Meanwhile, discretionary review allows local authorities to scrutinize projects more closely. This in-depth examination considers various factors, including community input, aesthetics, and potential impacts on the neighborhood. While this process ensures a tailored approach to each project, it also introduces complexity, as decisions may involve negotiations and public hearings. Discretionary review serves as a mechanism for municipalities to balance the need for development with the preservation of community interests and character.

Final Thoughts

While this article doesn’t encompass the entirety of the intricate, ever-evolving subject of zoning, we’ll discuss that in a coming article. In the meantime, I encourage you to share your questions or additional insights in the comments section.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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Property Chomp’s Take:

Embarking on a ground-up development project in real estate can be both daunting and exhilarating. The opportunity to build something entirely new is a thrilling venture, but it requires a thorough understanding of zoning regulations. Zoning is at the heart of any successful development analysis, as it dictates what can be built and where.

Zoning designations vary slightly from city to city, but they all serve the same purpose. For example, the code R3 typically means residential use with no offices or retail allowed. The number 3 indicates that more density and height are permitted compared to lower designations like R2. Similarly, C signifies commercial use, while M is for manufacturing. These designations help us understand the basic rules of land use in any city.

Specific zoning parameters play a crucial role in development projects. Height restrictions and floor area ratio (FAR) are important considerations. In areas zoned for single-family homes, usually labeled as R1 or R2, only single- or two-story structures are allowed. Multifamily buildings and taller structures are permitted in areas zoned as R3 or higher. In densely populated cities like New York, residential zones can even go up to R10. However, in cases where unlimited stories are allowed, the building’s height is constrained by the FAR. FAR sets a limit on the total gross building area permitted, which determines the number of stories that can be built.

Setbacks are another important aspect of zoning regulations. These setbacks determine the distance that buildings must maintain from property lines. Side setbacks prevent congestion by maintaining space between buildings, while front setbacks enhance streetscapes and provide space for trees and bike parking. Rear setbacks ensure privacy and separation between buildings. The requirements for setbacks vary from city to city, with some urban areas allowing buildings to be constructed directly against a neighbor’s property, while others require minimum distances on all sides.

Unit density is a key factor in urban planning. Zoning regulations dictate the maximum number of residential units allowed in a given area. This restriction helps balance the need for housing with considerations such as infrastructure capacity, traffic flow, and community aesthetics. Unit density plays a vital role in shaping the social and physical fabric of a neighborhood.

Incentivizing urban development through affordable housing is another strategy that can be employed. Transit-oriented neighborhoods often have policies that allow for increased zoning parameters, such as unit density and building height, if a specific percentage of units are dedicated to affordable housing. Engaging with the city and negotiating for incentives can also be effective in promoting affordable housing.

Neighborhood ordinances are important regulatory mechanisms that ensure the evolution of neighborhoods aligns with their distinct character. These ordinances vary widely in content and can include limitations on building height, design criteria, and historical preservation requirements. Locating these ordinances may require contacting the city’s planning staff or accessing resources like zoning maps or the city’s website.

There are two types of review processes when it comes to zoning: by-right and discretionary review. By-right projects adhere to specified zoning parameters and do not require discretionary reviews or neighborhood hearings. However, larger developments or projects that raise concerns like environmental or historical impacts may still require discretionary review. This process allows local authorities to scrutinize projects more closely, considering factors like community input and potential impacts on the neighborhood.

Understanding zoning regulations is essential for any successful ground-up development project. It ensures compliance with the law and helps create sustainable, harmonious communities. While this article only scratches the surface of the intricate subject of zoning, it provides a starting point for developers to navigate this complex landscape.

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