• Zoning Considerations for Commercial Loans

    Zoning: What is it?

    Zoning is the process by which a municipality divides its land into categories in which certain uses are prohibited or permitted.   Common categories for land use are commercial, residential, industrial, or agricultural.  Most zoning laws are designed to create a more desirable place for inhabitants of the community to live. Zoning is a method of planning for appropriate land use.  Zoning laws can also determine the land area of a lot, the style of architecture, or the building size.

    Zoning’s Purpose

    The basic purpose of zoning is to insure that property types within the zone are not conflicting.  Few people would argue with a decision to disallow a strip club next to an elementary school.  Land use regulation is primarily to control future development of the zone. Existing properties within a zone that do not meet zoning requirements are often “grandfathered in” so that their use is permitted.

    Types of Zoning

    Commercial zoning is usually subdivided into several categories depending on business type.  Examples are apartment complexes, office buildings, hotels, night clubs, shopping centers, manufacturing facilities, and warehouses.  Potential incompatibilities between pairs of these types of businesses are easily seen.  Having a night club or smoky factory next to your apartment home would clearly be undesirable.

    Residential zoning laws are also subdivided into categories depending on the type of housing.  Some of these categories would relate to apartments, single family residences, condominiums, duplexes, and trailer parks.  Allowing a trailer park to be built in a subdivision or single-family residences would not be popular with the homeowners.  Residential zoning laws can affect the business use of a personal home. Issues to consider would be type of business, business employees, signage, hours of operation, and parking concerns.  Residential zoning laws will also typically limit the types of animals to be kept on the property.  Maintaining farm animals such as pigs or chickens would not ordinarily be permitted in a residential subdivision.  Aesthetics limitations such as landscaping, colors, fences, mailboxes, outbuildings, solar panels, etc. are becoming more popular in upscale subdivisions.

    Industrial zoning is generally based on the particular type of business involved.  Environmental issues and noise can be factors in determining the suitability of a particular business for a zone.  Other factors that are often considered are lot size, building height, and street setbacks.  Setbacks are generally greater in industrial zoning.

    Agricultural zoning is employed by cities and towns to maintain the economic viability of agribusiness.  Non-farm use of the land is typically not permitted.  Density of the land lots is controlled by setting a large minimum lot size for a residential structure.  Fragmentation of agricultural land is prevented by eliminating the construction of residential subdivisions within an agricultural zone.

    Historical zoning laws may affect buildings and homes more than 50 years old.  These laws may prohibit destruction or modification of an existing building.  The National Historic Register is the official list of historic properties considered worthy of preservation. The Federal Government offers special tax incentives to owners of properties listed in the National Historic Register.  These involve investment tax credits for rehabilitation of historic properties. In this way the Federal Government encourages the rehabilitation and preservation of significant historic areas.

    Who Do I Call?

    By including the name of your town or county plus the word “planning” in a Google search will typically put you in touch with the proper authorities who can answer your zoning questions.





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