What Is Zoning? What It Is, How It Works, Classification Examples

What Is Zoning?

Zoning refers to municipal (ie, local or city governmental) ordinances or laws that dictate permitted or prohibited use of real property in certain geographic areas. For instance, zoning laws might prohibit industrial or commercial uses in residential areas to prevent oil firms, manufacturers or other sorts of commercial enterprises from building in residential areas.

These laws are in fact subject to amendment or suspension if work on the property is essential for the improvement of the municipal economy.

Key Takeaways

Zoning is a system in which local governments can alternatively control whether certain parcels of real estate or land within their jurisdiction can be used or developed for particular purposes.

Other zoning classifications might consist of residential, commercial, agricultural, industrial or hotel/hospitality, etc, or be more detailed.

As a local government may overturn its zoning laws as long as it doesn’t cross state or federal statutes, and because a particular plot of land may or may not upgrade zones, so it is with ducks.

How Zoning Works

Thistext describes what type of developmental and programmatic use of the land is allowed on a given tract. A township normally segments an area into districts and neighbourhoods in a set scheme according to its master plan, usually in order to fuel economic development, to control the congestion of traffics, to reduce the volume of noise, to define specific territory for residential use, to protect certain resources, or any combination of these purposes.

Examples of zoning uses are industrial, light industrial, commercial, light commercial, agricultural, single-family residential, multiunit residential, and schools.

Local government could prohibit residential use of certain properties to concentrate commerce into only certain parts of town. Such zoning can lead to prior conflict over what that use can entail.

Zoning laws also regulate what kind of structures can be built where, within regulated neighbourhoods. For instance, zoning can cap maximum heights of structures – irrespective of the use or structural type – in a local area. Zoning can prohibit high-rise residential or office buildings on specific parcels irrespective of whether buildings on those parcels otherwise comply with the laws.

Suppose that zoning restrictions are common, and that they affect prices: a piece of property might be underpriced or overpriced because of how many such restrictions a municipality placed on it.

With the 1926 ruling by the US Supreme Court that properly scaled zoning was an allowable exercise of the states’ police power, with its landmark decision in Village of Euclid v Ambler Realty, zoning became a constitutionally sound local authority.

Economic Theory of Zoning

The Nobel Prize-winning economist Ronald Coase’s Theorem holds that, if transaction costs are zero, then questions about how to use and develop land could be settled with an optimum allocation (in economic terms) without the need for government regulation. Under the theoretical conditions of Coase’s Theorem, what can or should be done with any given piece of land – how it should best be productive – could just be hammered out among the relevant parties so as to produce the best economic outcome.

Coase’s Theorem illustrates why, in the real world – where, unlike in his original hypothetical, stakeholders do have transaction costs, and therefore it is not realistic to assume frictionless bargaining – land use regulation tends to take the form of zoning and other ‘command-and-control’ interventions administered by the government.

Critiques of Zoning Law

There are varied critiques of traditional zoning implementation.

Others maintain that zoning creates and exacerbates the inequality of quality of life by socioeconomic class. For instance, what if a township prohibited heavy industrial and commercial resources from occupying space in the same neighbourhoods as middle- to low-income households? While raising property values in the higher-income portions might not be the explicit goal, the effects of such policies certainly allow for the marrying of exclusive neighbourhoods with the absence of noisy and polluting peers.

If there is a shortage of housing, yet people refuse to allow more residential units to be built in areas that are zoned for low-density, single-family residential neighbourhoods, they are effectively contributing to homelessness in their community.

A more modern critique of retail/residential zoning separation is that it imposes a car dependency on consumers, and encourages less interaction with neighbours, as well as a reduced sense of community belonging. By contrast, an integrated, pedestrian-friendly neighbourhood in which residents can access groceries, work and entertainment without having to rely on a vehicle becomes a destination of choice where the costs of car ownership and driving – including environmental costs – can be more easily circumvented. Additionally, if zoning facilitated such neighbourhoods without the restriction of retail and residential silos, less space would have to be devoted to roadways, and more space could be reserved for housing units and green space.

Mixed-Use Zoning

Mixed-use zoning is a structure in which residential, commercial, and sometimes industrial uses are combined together in a single block or building. One of the main benefits of Mixed-use zoning is that it creates diverse and densely populated areas, since residents can walk to their workplace and shopping facilities. Mixed-use development of Times Square in New York City, a district containing entertainment, retail space, corporate offices and residential areas, has attracted the flow of revenue. The neighbourhood has become a greatly desired living place and a business and entertainment hub of New York.

These are real, important benefits but mixed-use zoning also presents difficulties, not least the often acrimonious tensions between different uses: noisy commercial activity late at night creates resentment from residents, and the sightlines of local restaurants mean people unwind with their meals in full view from bedroom windows.

Apart from the changing needs of people, a second factor is the complexity and cost of mixed use projects. Compared with single use projects, mixed-use development often has bigger land space, more complex and costly planning, design and construction processes. In San Francisco, the development cost in mixed-use neighbourhoods, like the Mission Bay, can be significantly more than the single use counterparts because of the complex site planning/building systems. As Figures 2 and 3 show, mixed-use development is usually harder to finance than a single use project since its revenue streams are more unclear or risky, and complicated logistics.

Conditional Use Permits and Zoning

Conditional use permits (CUPs) are a zoning tool that allows for uses that aren’t otherwise typically permitted within a given zone. But only if conditions are met.

These permits are designed for uses that could negatively impact the character of the surrounding neighbourhood but are beneficial and necessary. Schools, hospitals and churches, for example, might require a CUP in order to operate in a residential zone. These are uses that one typically wants to support for the benefit of the community, but which must be very carefully regulated in order to avoid compromising the neighbourhood character or infrastructure.

The CUP process includes a review by local planning officials of the impacts of the contemplated use. The proposal doesn’t conform to local zoning, so it is often reviewed in detail. This includes traffic; noise; and compatibility with the surrounding uses. The proposal might be subject to public hearings where community residents can speak for or against.

Special Considerations

Zoning laws can also be modified short of full repeal, and property owners can apply for variances that grant specific exceptions from zoning in given cases. For instance, a house with multiple dwellings could be rezoned to allow more individual apartments, even if the neighbourhood is otherwise zoned for detached family homes, or an owner of a home-based business could apply for a variance to allow the business to continue operating at home.

For example, it might require applicants for variances to explain why a variance is needed, and provide assurances that the change will not be substantially detrimental to or noticeably disruptive in the character of the surrounding community.

General Examples of Zoning

Consider mixed-use zoning, another real-world example of zoning done right. Mixed-use zoning allows residential, commercial, and recreational spaces to develop in close proximity, leading to neighbourhood revitalisation, increased walkability, and an increase in community. Mixed-use zoning drastically increases property values as residents are willing to pay more to live in areas that feel more vibrant.

But zoning can also boost the monetary value of property by, among other things, preserving communities’ character and dissuading conflicting land usages. In Savannah, Georgia’s historic district, some zoning ordinays permit only products and styles of architecture that are in-line with the already established visual presence of the area ­– for instance, new yellow-hued buildings made of Georgian wood with symmetrical, slanted roofs. In this way, property values are guaranteed but so is history.

Who Controls Zoning?

There is no federal agency for zoning; who does zoning in your locality is pretty much the law’s command. In some areas it’s in the county, in other areas it’s in the city; sometimes it’s the zoning office, other times it’s in a land use office.

How Can You Get the Zoning Changed on Something?

You’re going to need to find out who controls the zoning in your area first off, and usually they will have some plan by which you can appeal the zoning on some type of thing, but the way it works will vary by jurisdiction. I would encourage a chat with a local real estate lawyer.

Can Zoning Laws Stop Me From Building on My Property?

Yes. You may own a parcel of real estate, but you won’t necessarily have a prerogative to do with it as you please: a site’s zoning will likely impose prohibitions on building of a certain scale or for a certain use (or dozens of other such restrictions).

Why Is Zoning Important?

The justification of zoning has to do with the management of growth and urbanisation. Only by proper planning of land use can we avoid the negative consequences caused by incompatible development. For example, allowing an industrial facility right next to your home would be a mistake as its operation would not be conducive to your enjoyment.

How Do I Find My Property’s Zoning Designation?

To look up your zoning designation, log on to your municipal zoning or planning department’s website, which will often include zoning maps and information. In many municipalities you can also use an interactive online map to search by address.

The Bottom Line

Zoning emerged as a tool for creating uniform neighbourhoods, for controlling patterns of automobile traffic, and – when well designed – for carving out space for a city to grow into itself over time. If there is a single lesson to be taken from the complex history of zoning, it’s that implementing it has created both intended and unintended consequences, and commonly aggravated income inequality and racial accumulation gaps along the way. It would be a mistake, therefore, to believe that zoning practices will remain as they currently are, in the face of growing populations and demands.