Making an informed decision when choosing a property for investment can be daunting for real estate professionals. Proper research is key to ensure the endeavor is successful, and understanding local zoning codes is essential. Local zoning bylaws, or municipal zoning codes, are a set of rules and regulations concerning the use and development of private land. Zoning codes determine what is permissible in the area you are looking to invest in and have a direct impact on the outcome of the investment’s success.
Understanding what a Zoning Code Means
Zoning codes play a major role in determining the potential of a property for investment. Zoning codes vary from municipality to municipality, but generally they are composed of two distinct components: permitted uses and the regulations of development.
Permitted Uses
Permitted uses refer to the legally acceptable activities that can be performed on the property. These activities may include residential, commercial, industrial, and mixed-use purposes. For example, in New York City, zoning codes can range from R1-4 (Single and Two-Family Dwellings) to C1-C8 (Commercial and Limited Manufacturing). In the R1-4 zones, permitted uses include single and two-family dwellings, public parks, and public and private schools, while in the C1-8 zones, permitted uses are generally commercial and limited manufacturing activities. You wouldn’t want to purchase a property that is zoned for commercial purposes, such as restaurants and bars, if you plan to use it as a residential property! Most of the time, homes in the same area are zoned similarly, but sometimes, there’s a parcel with an unexpected zoning. These offer great potential for development without the hassle and risk of attempting to change the zoning. For example, if you find a parcel with a single-family home zoned R1-4 and the surrounding area is zoned C1-8, you could potentially convert the single-family home into a multi-family residence or a commercial property.
Regulations of Development
Regulations of development refer to the specifics of how the land may be improved and used, and what types of structures can be built. These regulations include the maximum building height, floor area ratio, floor coverage, and setbacks. For example, the City of Edmonton has various zoning codes, but all of them have a general requirement of a minimum of two parking stalls per dwelling unit, as well as a maximum building height of 12 meters. Thus, even if you find a parcel with an existing single family home that allows for multi-family development, you’d still need to ensure that it has enough parking space and that the building height would meet the local zoning regulations. Understanding what a zoning code means
Pitfalls to watch out for
When looking to understand zoning codes, it is important to note that not all sources of municipal zoning information are created equally. Knowing where to source good data and understanding the terminology is key for an investor to ensure that their decisions are informed.
Ensuring accuracy with RealEstatePulse
RealEstatePulse provides a straightforward and accurate way to access zoning codes and acceptable uses in a standardized format, allowing real estate professionals to make smart investments with ease. Our concise and regularly updated data on zoning and acceptable uses helps to keep investors informed, eliminate guesswork, and make effective decisions on what investments and changes to pursue. We can send out updates hourly, giving our customers the best chance to beat their competition, and our dashboard gives users the ability to query our data and add their own custom notifications.
To take advantage of our services and get ahead of the competition, subscribe to RealEstatePulse today!