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For Estate Planning, Estate Administration And Disputes

What are the impacts of zoning laws on commercial real estate?

On Behalf of | Jun 10, 2024 | Commercial Real Estate |

In the bustling world of real estate, zoning laws play a pivotal role in shaping transactions. For those in this complex landscape, understanding these regulations is not just beneficial but essential. If you are seeking to invest in a property, how can you make more informed decisions in your commercial real estate deals?

Types of zoning districts

Zoning laws divide land into districts, and each has its own set of regulations. The regulations specify the type of buildings to construct and how to use them. In New York City, the types of zoning districts include:

  • Commercial: This covers business activities like neighborhood retail and services, car repair and gas stations and regional commercial areas with movie theaters and department stores.
  • Residential: This pertains to housing types, such as detached single-family homes and residential skyscrapers.
  • Manufacturing: This covers various industrial and commercial activities.

In addition, there are special purpose districts that modify zoning provisions to address unique conditions. These include preserving historic or natural conditions or allowing a broader mix of uses.

Impacts on commercial real estate

First, zoning laws influence property values. For instance, a property for commercial use in a high-traffic area could have a higher value than one for residential use. This is because commercial properties have the potential to generate more income through business operations.

Second, zoning laws determine the development potential of a property. They dictate the size and height of buildings, the amount of parking and the types of businesses that can operate within an area. This can impact an investor’s decision to buy a property, as it affects their ability to develop it according to their plans.

Maximizing investment opportunities

Understanding zoning laws is crucial for those involved in commercial real estate deals. By seeking legal counsel, you may ensure compliance with laws and manage zoning changes as you aim to maximize your investment opportunities.