Real Estate Development & Regulations

The land regulatory process

Master plans → Zoning Laws → Site Plan Review

Comprehensive Master Plan

Primary tool & responsibility of city planners

establishes a vision for the community

provides a foundation for land regulatory activities

Features: Land use plan, has policies & specific directions, good development guide to real estate development community

Master planning in the US

Establishes land use parameters

Creates “attitude” towards land development

defines economic development policies

creates legal framework for lans development regulations

Zoning

Main tool for implementing a comprehensive plan- has two important functions:

1) Defines specifically what use or uses can be placed on a piece of property

2) Has the rules for placement & scale of the use

A zoning ordinance can be as complicated as the Federal Tax Code

Zoning regulations

permitted uses

placement of the use

height & bulk of the use

landscaping

parking

Zoning Cases

Tragedy of the Commons- England 1600s

New York City Tenement Houses- 1910

US Supreme Court in Amber Realty V. Euclid, Ohio- 1926

Established the following legal principles:

1) Police Power

2) Public Health, Safety, & Welfare

3) Presumption of Validity

Types of zoning ordinances

1) Euclidean zoning

• Original, most common

• Use based

• Protection & segregation of uses

2) Form Based Codes (New urbanism)

• Newest approach

• Not very common yet, but will be

• Design & impact based

• integration of uses

Euclidean Ordinances

Contains:

Numerous districts

pyramid approach

purpose statements

permitted uses (accessory & special uses)

height & bulk regulations

parking requirements

landscape requirements

Building Coverage: 30% of site

Ground Coverage (Impervious materials): 60% of site

40% must be landscaping & open space

Form Based Code

Contains:

Character descriptions

Regulating plan: use standards, design standards, streetscape requirements

Project Relief

Special use permits

variances- dimensional

variances- by use- conditional rezoning

overlay zones

planned unit developments

Special use permits (unique or difficult uses)

has both an upside & a downside

usually applies additional standards

greater public scrutiny & slows projects

Ex: uses with drive-in/drive-thru facilities, uses with liquor licenses, new uses like marijuana provisioning

Dimensional Variances

Most common

Addresses the placement of use on a site

Must argue “hardship”

Zoning board of appeals

Use Variance

New

Conditional rezoning

use based

transition to form-based code

development agreements

Overlay Zones

Introduces either different regulations or uses within a limited area

common technique when attempting something new or otherwise hard to do through straight zoning

Ex: rental limitations, granny flats

Planned Unit Development

Flexible

Mixed uses

Mixed density

Phases

Subdivision Regulations

Minimum & maximum lot size

maximum site use

required infrastructure

roadway & sidewalk standards

Site condominiums

Offers design flexibility

applies to residential & commercial

becoming more common

Wetland Ordinance

Intention is to protect existing wetlands

normally separate ordinance but tied back to zoning

establishes standards for protection as well as mitigation

more often a suburban ant-growth tool

process: determination, consultants

Historic Preservation

Creates districts to preserve historic structures or places

must keep as is

prohibits demolition or incompatible development regardless of zoning

Parking Requirements

Requirement based on use or size

facilities have to meet standards regarding: space sizes, aisles, landscaping, lighting

Exceptions: EL CBD waiver

Landscaping Ordinance

Placement of materials

amount of materials

types of materials

Traffic Impact Analyses

May require depending on size of project of nature of land use

requires an independent consultant report

Other zoning provisions

Sign ordinance

tree removal ordinance

fire code

groundwater retention requirements

soil and erosion permit

curb cut permit

building/fire/housing code- permits & fees

possible green initiatives- green roofs, waterless toilets, rainwater capture, LED lighting

Transfer of Development Rights

1) Purchase development rights from owner of site a (which allows 15 stories)

2) transfer to your site- site b (which allows 3 stories)

3) City allows the transfer in exchange for:

a) agreement to not develop site a

b) agree to public art on site b

Air rights

Can develop on top of another use:

parking structure

rail or highway right of way

another private use & separate owner

Zoning summary

Zoning will define the physical elements of a project

projects are designed to meet zoning standards- can end up with bad projects: large front loaded parking lots, single use, unnecessary setbacks

zoning defines the economic value of property

Site Plan Approval

Site plan submittal requirements:

location of building(s) on the site

dimensions of building (height, length)

dimensions of setbacks (front, sides, rear)

curb cuts

sidewalks & parking spaces

utility locations

landscaping

natural features including wetlands

Standard Public Review Process

Preliminary meeting with staff planners

submission of site plan

planning commission holds a public hearing 92 weeks-30 days)- also affected p[roperty owners notified

planning commission makes a recommendation to the local elected officials

elected officials hold a public hearing (2 weeks- 30 days)

elected officials make a decision or table for future meeting

time frame is 6 months- 1 year

Easements

Controlled use of private property

1) public easements

• road right of ways

• public utilities

• public access

2) Utility easements

• electric

• gas

3) Private easements

Eminent domain

Taking of private property by the government for public purpose

often referred to as “condemnation”

authorized by federal & state law (various federal program statutes (highways), michigan home rule, various state enabling programs- dda)

Three allowable uses of eminent domain

public use (roads, parkland, utilities)

public purpose (benefit, vague)

removal of blight (defined in state law)

Federal criteria for ED

Kelo vs. City of New London, Conn., 2005, US Supreme Court case defined public purpose to include economic development (benefit)

can take private property for private use, but must be based on

a) a plan

b) public consent

Michigan perspective on ED

Poletown 1981, Michigan Supreme Court

• general motors expansion

• could take private property for private use as a public purpose (employment)

• consensus was shaky

County of Wayne vs Hathcock- 2004, Michigan Supreme Court

• Detroit Metropolitan Airport- industrial park

• Reversed Poletown

• Private use not public purpose

Michigan definition of public purpose

must be for clear public use (roads, utlities)

must be determined to be blighted under state law

‘Proposal 4 (2006): state vote confirmed and 125% rule

Most common uses: road right of way & parks and recreation

Inverse Condemnation

Loss of property rights means loss of economic value

loss of property rights due to government action (like a zoning change)

property owner must be compensated for economic loss

Public Property Purchase Requirements

Establish “fair market value”

• property appraisal

• assessed value- city assessor

make offer based on fair market value, if rejected free to negotiate price

Eminent Domain Process

File with county treasurer

• determine fair market value

Public purpose hearing in 30 days if requested by property owner:

• is there a public purpose?

Court determines price based on:

• appraisals (sometimes three)

• court testimony about value

• judge or jury decision

Property owner can benefit taxwise from eminent domain threat

issues with eminent domain

inconsistent around country

creates confusion around definition

made governments gun shy- even in clear cut public purpose cases

increasing cost & litigation

huge negative impact on downtown redevelopment projects