Zoning laws are the state and local regulations that determine what can be built in specific areas of cities and towns. Some areas are zoned for industrial use while others are reserved for single-family housing. Seeking changes can be prolonged and expensive. Yet the dynamic nature of society and the economy is shifting traditional zoning laws.
Determining the current and future zoning of a parcel is key to real estate development. Yet, under these circumstances, investing in property is less certain than it traditionally has been. That makes it critical to consult an experienced real estate attorney before buying a plot of land with plans to develop it.
Zoning Directly Impacts Real Estate Value and Function
Before purchasing land to develop, it’s critical to understand the current zoning and the scope of any changes required. Seeking a change in zoning, or even a variance, can inflate the cost of any development. In Minnesota, zoning regulations are primarily enacted and enforced at the local level under authority granted by state statutes.
Development zones can be proposed, firmly established, or fluctuating, depending upon the needs of the community and other factors. This status impacts any current and future ownership and development. Whether the local zoning authority allows changes or variances (often for related uses) depends largely on:
- the community’s strategic plan,
- resources available (such as availability of water and sewer),
- local trends toward granting or denying changes,
- state- and regional planning for infrastructure such as airports, highways and rail lines,
- potential impacts on nearby property owners, and
- Any impact on protected natural resources such as rivers, habitat, or wildlife.
Some types of zoning allow flexibility while others do not. State law (found at the Minnesota Office of the Revisor of Statutes) dictates the process for changing local zoning. It usually includes time-consuming site plan reviews and opportunities for community input. conditional use permits and planned unit developments are alternatives to full rezoning that allow some flexibility if the proposal fits within local guidelines.
Yet, some areas are more likely to allow changes in use, for instance:
Proposed zoning applies to undeveloped tracts, such as former agricultural land that is designated for other purposes. The new owner submits a proposal then bargains with the local zoning authority to allow development. A changed use must fit within the community’s comprehensive plan and return beneficial tax income or jobs.
Firmly established zoning, such as a populated residential area of single-family homes or an industrial park, is less likely to change zoning for a single owner. Residential zoning may be relaxed to allow similar uses, such as multi-family buildings, but changing settled zoning is less common and can be challenged in court. This includes things like putting residences in industrial zones or allowing construction in a protected river watershed area.
Fluctuating zoning applies to the areas where previous zoning regulations are outdated or are subject to change for reasons including changing demands. This can be a long process, incorporating the opinions of property owners, residents, and the state and local officials with jurisdiction. In this process, new proposed zones are defined, mapped, studied, and community services carefully judged for their suitability (such as having enough water capacity, firefighters, and equipment to respond to an emergency).
Minnesota has seen changes in zoning trends in response to lifestyles and needs of residents and businesses. In recent years, agricultural land has been converted to other uses, including housing. Local planning commissions are facing unforeseen demands from large-scale development like distribution centers and data centers, stretching the resources of the communities involved.
Minneapolis has been praised for its City of Minneapolis 2040 Comprehensive Plan that allows higher-density housing development alongside existing uses. The city has also relaxed requirements for parking spaces, reducing the cost of building housing.
The net effect of these policy changes is that Minnesota is becoming more development-friendly, particularly to housing. Lenders who receive applications for mortgages or loans for nontraditional areas are more likely to approve them.
Your Local Partner in Real Estate Development
You can rely on real estate attorneys from Waypoint Law to provide the necessary local knowledge and due diligence research that is crucial for developing land in Minnesota. Call for a consultation today.