Unit 20: Land-Use Controls and Property Development
Overview
Real estate professionals must be knowledgeable about local land-use restrictions to avoid showing a buyer a property that is not suitable for the buyer’s intended use.
They should be aware of these issues and be able to direct their clients to appropriate sources of additional information.
Real estate professionals are not expected to become land-use experts, but they should understand the issues and sources of information.
Learning Objectives
Explain the concept of police power and the provisions under which it protects the public health, safety, and welfare.
Explain zoning ordinances, permits, and property use.
Define building codes as they relate to the requirements and restrictions placed on construction standards.
Describe the issues and regulations involved in subdivisions.
Explain non-governmental (private) land use restrictions: covenants, conditions, and restrictions (CC&Rs).
Identify the advantages and disadvantages of investing in real estate.
Describe the various laws and agencies which regulate land sales.
Land-Use Controls and Property Development
Police Power of Government: authority to regulate land use to protect the public health, safety, and welfare.
The Comprehensive Plan: a long-range plan guiding growth and development; zoning is used to implement this plan.
Zoning: affects the permitted uses of each parcel of land, including building setbacks and the types of structures allowed.
Zoning and Exceptions from Zoning Ordinance
Zoning ordinances implement the comprehensive plan.
Bulk zoning is a regulatory approach that limits the overall size and bulk of buildings within a certain area, ensuring that developments do not exceed specified height, floor area ratio, or density restrictions.
Aesthetic zoning is a form of zoning that focuses on maintaining the visual character and aesthetic quality of a neighborhood or area, often by controlling the architectural style, design elements, and landscaping of properties.
Incentive zoning
Zoning affects permitted uses of each parcel, including building setbacks and types of structures.
Exceptions from Zoning Ordinance (handled through a zoning hearing process):
Non-conforming use
“Grandfathered In”
They were using the property for its intended purpose prior to the zoning change, allowing them to continue operations under the previous regulations.
Variance
Going to the zoning board and asking for change
Permits a prohibited land use to avoid undue hardship.
Make a reasonable use claim.
Conditional-use permit
Allows a nonconforming but related land use.
Such as a daycare center or a home-based business that operates within specified guidelines to minimize impact on surrounding properties.
Zoning hearing board conducts hearings on these exceptions.
Building Codes and Certificates of Occupancy
Building Codes: relate to the requirements and restrictions placed on construction standards.
Permit required before building.
Certificate of occupancy issued on satisfactory completion of the project.
ADA architectural standards may be applicable in some cases.
Subdivision and Development
Subdivision: a subdivider segments land into parcels; a developer constructs improvements on subdivided parcels.
Subdivision Plan: involves a plat map and density considerations.
Land Development Plan: plan for improvements and infrastructure beyond the parcels themselves.
A developer constructs improvements on subdivided parcels.
Land Development Plan and Subdivision Plan Details
Subdivision Plan
Plat map: a detailed map of subdivision boundaries, lot lines, easements, etc.
Density: the number of dwelling units or lots per unit of land area.
Density is a key consideration in planning and approvals.
Private Land-Use Controls
Deed Restrictions: use limitations encoded in a deed.
Restrictive Covenants: private agreements that restrict how land may be used.
Covenants, Conditions, and Restrictions (CC&Rs): formal private land-use restrictions commonly found in planned communities or subdivisions.
Which ever is more restrictive takes president over the others, ensuring that the most stringent guidelines are followed to maintain property values and community standards.
Regulation of Land Sales
Interstate Land Sales Full Disclosure Act (ILSA): federal regulation requiring disclosures in certain land sales.
ILSA exemptions include:
Subdivisions of fewer than lots
Subdivisions in which each lot is acres or more
Lots offered for sale solely to developers
Lots on which buildings exist or where a seller is obligated to construct a building within two years
State Subdivided Land Sales Laws: state-level regulations that may apply in addition to ILSA.
Private vs. Public Controls; Practical Implications
Public controls (police power, zoning, building codes, subdivision approvals) are government-imposed requirements intended to regulate land use for public welfare.
Private controls (CC&Rs, covenants, and restrictions) are created by private parties and can limit use even if public zoning would permit it.
Real estate professionals should guide clients toward reliable sources of information on restrictions and regulations and disclose known limitations to avoid misrepresentation.
Understanding these controls helps buyers assess suitability, investors gauge risk/return, and developers plan compliance and marketability.
Connections to Practice and Real-World Relevance
Zoning decisions affect property value, development feasibility, and future uses.
Building codes and certificates of occupancy ensure safety and accessibility standards, impacting construction costs and timelines.
Subdivision and development plans shape infrastructure, density, and community character.
Private land-use restrictions (CC&Rs) can influence HOA operations, maintenance obligations, and long-term property rights.
Federal and state land-sale regulations (ILSA, state laws) protect buyers in subdivisions and influence disclosure requirements.
Ethical and Practical Considerations
Always verify current zoning, building code requirements, and subdivision approvals before marketing or purchasing property.
Be transparent about any known private restrictions (CC&Rs) and require buyers to review them.
Direct clients to official sources (planning departments, building departments, public records) for the most up-to-date information.
Consider long-term implications of density, land-use restrictions, and infrastructure planning on investment risk and return.
Key Terms and Concepts (glossary)
Police Power: the government’s authority to regulate land use for public health, safety, and welfare.
Comprehensive Plan: a guiding document outlining long-term development goals and policies.
Zoning Ordinance: local laws that designate permitted uses, setbacks, and building types for parcels.
Non-conforming Use: a use that was legal before current zoning but does not comply with new zoning provisions.
Variance: permission to depart from specific zoning requirements due to unique circumstances.
Conditional-Use Permit: approval to use a property in a way that is not normally permitted in the zoning district, subject to conditions.
Building Code: standards governing construction quality, safety, and accessibility.
Certificate of Occupancy: official approval indicating a building is ready for occupancy.
ADA: Americans with Disabilities Act standards that may apply to architectural design and accessibility.
Subdivision: process of dividing land into parcels for sale or development.
Plat Map: detailed map of subdivision boundaries and lots.
Density: measure of how many units or lots per land area.
Deed Restrictions: limitations encoded in property deeds.
Restrictive Covenants (CC&Rs): private agreements restricting land use.
ILSA: Interstate Land Sales Full Disclosure Act, regulating certain interstate land sales disclosures.
Exemptions to ILSA: specific conditions under which ILSA does not apply to subdivided lands.
State Subdivided Land Sales Laws: state-level regulations complementing ILSA.