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Why do we have real estate zones?

| Mar 9, 2019 | Real Estate Transactions |

If you have ever tried to buy a piece of real estate, you probably learned right away that there are specific zoning regulations that govern land use. You can only use the property for things that are approved within that zone. A few examples of potential zones include:

  • Commercial
  • Light commercial
  • Industrial
  • Light industrial
  • Schools
  • Agricultural
  • Multi-unit residential
  • Single-family residential

Even if you understand exactly what laws you have to follow, you may find yourself wondering why these zones exist in the first place. What is the point of the restrictions?

There are a few reasons, which can vary from case to case. Some of them include:

  • Reserving specific areas for residents to live
  • Keeping different types of use separate — keeping manufacturing away from homes, for instance
  • Controlling the noise levels in a given area
  • Controlling traffic flow in that area.
  • Adhering to the master plan that was established for the city
  • Protecting natural resources

You also have to consider property values. While a business zone may see higher prices with fewer restrictions — meaning that there are more potential buyers — the opposite can be true for residential properties. Homebuyers want to know that businesses are not going to flood the area, bringing commotion and traffic with them. They want assurance that only other homes will be built, giving them neighbors and a quiet community. The city tries not to do anything that would lower values significantly.

Any real estate transaction starts with gathering information. Make sure you know what restrictions you face and what they mean for your purchase.

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