So you have a plan and want a tract of land to make it a reality … well, it isn’t that easy.
Time is truly flying. I have just about hit my five-month mark with MacRo, Ltd. as a licensed commercial real estate agent. I've learned so much in that time that just the thought of trying to capture all of my experiences in this Field Notes post was a bit overwhelming.
After combing through my notes about the many things I've learned since my journey began, there is one common element. And it's part of every real estate transaction. A simple four letter word that inevitably must be discussed: land.
I used to think that if you purchased a piece of land, you could do with it as you pleased. My naivety had me believing that you could build just about anything (within reason, of course) that you desired at any time. Sure, I knew about county and city zoning regulations, but as long as the plan was not to construct a nuclear waste dump I thought everything would be just fine.
Yes, I know … you’re thinking, “Really, Ashleigh?!?!”
Of course that's not the case. The intricacies of land use and zoning codes have astounded me. In reality, there are so many factors to consider when looking at developing a tract of land.
Probably the most important thing to understand is the multitude of uses allowed in each zoning category. It’s one thing to find a location for your dream house, but it's clearly a different story if you want to build a school, church, warehouse or training facility, just to name a few instances.
I've learned there are general zoning designations that every county, city, town or other jurisdiction identifies. For instance, in Frederick County, there is an entire alphabet of abbreviations of districts that any seasoned commercial real estate broker must know:
RC (Resource Conservation)
PUD/MXD (Planned Development)
MH (Mobile Home Park)
VC, GC, MX (Commercial)
LI, GI, MM, ORI (Industrial)
SW (Solid Waste)
The districts listed above are scattered around the county. A zoning map includes these districts, which are well thought out and approved by local government and stakeholders in accordance with the county's comprehensive master plan.
Within each zoning district there can be “sub-districts”. For instance, within Frederick County’s residential district different levels of density are defined as R-1, R-3, R-5, R-8, R-12 and R-16. In this case the number after the letter means the number of units allowed per acre; whereas in other jurisdictions that number may mean something completely different, if it is even there at all.
There is also a land usage chart that is customized specifically by local government. Here in Frederick County, the land usage chart is laid out in a grid format with the districts (and sub districts) running across the top and the uses for each listed down the left side of the page.
Once again there is an alphabet soup that we commercial real estate brokers must learn:
P (Principal permitted use subject to design regulations)
PS (Principal permitted use subject to site development plan approval)
E (Principal permitted use as a special exception with a site development plan approval)
T (Permitted as a temporary use as a special exception)
X (Permitted as temporary use only)
SW (Solid Waste)
If the space you locate on the grid is blank, well, that means you cannot do what you hoped to in that district. On the other hand, if the space you identify is filled with one or more of those letters, well, congratulations. Or maybe not so fast with that celebration just yet, because your journey to do what you want to do on that property may only be just at the starting gate.
The next steps can be tedious and time consuming (weeks, months … or years). In some cases the services of a civil engineer, surveyor, land planner, land use attorney and a good banker are required. Having the right team to guide you in your journey is essential.
Oh, and don’t forget that seasoned commercial real estate broker, who can help you find the right property … not to mention the one who can connect you to that team of professionals and local government officials who can help guide you through the process.
I still have a lot to learn, but I know one thing for sure: I joined the right commercial real estate brokerage firm to educate me about land use regulations.
By the way, if you can’t tell, I am having a great time! Look for my next Field Notes post soon.