Zoning Analysis adds value to Realtors' services and real estate properties

Posted on
March 21, 2022

Zoning Analysis has started as a domain specific concept and traditionally was reserved to architects and planners. However, the information presented in this analysis if formatted in a friendly way, it's a very useful tool to sellers, Realtors as well as buyers. First let's understand the basics.

What is Zoning Analysis?

Zoning regulations set a generic framework for any land development project. In order to see how these regulations translate into a structure on your property, you’d need to apply them to your lot. This is called Zoning Analysis. This analysis is required for any project that would change the use, density, or size of a structure on a lot. It needs to be provided by any type of owner, whether you’re a homeowner, an investor, or a developer. City planners want to see that your proposed project follows the zoning regulations.  

Diagrams of a residential structure from Zoning Analysis
Diagrams of a residential structure from Zoning Analysis

Why do we need a Zoning analysis for every property if the regulations are the same in a neighborhood?

Each property has its existing improvements and a unique location within the building block. Also, each owner may want to explore different development scenarios or use cases for their lot. Even though all these scenarios would follow the same zoning district framework, the proposed building may look different.

Why do listing agents or home sellers need a Zoning Analysis?

The short answer is that you want to present to the prospective buyers all the opportunities offered by the marketed property. This way, you help the buyers value more your property. Imagine how the buyer's journey is when you go through a bunch of properties having to make immediate decisions that could affect you even for a lifetime. They don't have time or resources to investigate the development opportunity on your property or listing. You, as the seller or the listing agent, would have to be proactive and provide them with a comprehensive set of important information about the property. Planning regulations that apply to this lot are just as important as any disclosure. Zoning analysis presented in CityStructure reports help you present this important piece in marketing a property for sale.

When it's the best time to get a Zoning Analysis?  

The most appropriate time for a Zoning Analysis is before purchasing a property. If not done at the right time, homebuyers may find out too late that they cannot build as much as they'd need or hope for. Most of the real estate developers order Zoning Analysis prior to investing in a property. Regardless of the reason, you'd want to purchase a property, for-profit or for personal use, being aware of the development possibility on a lot is an important puzzle piece in deciding the value of that property. Therefore, Prospective homebuyers should understand the real potential of a property to avoid losing money and being disappointed by their purchase.

Another great time to order a Zoning analysis is whenever a major code change happens like Senate Bill 9 in California. This would give such a significant development opportunity to a property that it's worth at least understanding how it reflects on the value of your property when thought you might not be interested to sell it at this point.

Diagrams of residential structures based on SB-9
Diagrams of residential structures based on SB-9

Does a Zoning Analysis guarantee that you could build the structures shown on those drawings?

No. Even though this analysis may follow the planning regulations, the Planners require an extensive set of drawings to give you the permit or Entitlements. This set of drawings requires a significant budget, in thousands of dollars, and time commitment. The issued permit by the Planning Department would be solely for that specific use case and proposed scenario. So, it’s very limited and it’s issued to a specific person.

Why should I order a Zoning Analysis since there is no guaranteed approval?

CityStructure reports give you a sense of the scale of the possible development on a lot. It helps you caliber your expectations when it comes to land improvements. For instance, if you'd like to build an addition of 200sqft, large enough for a family size kitchen or a bedroom, and you see in your CityStructure report that you could add 500 sqft, the chances are quite high for the Planning Department to accept such addition. You’d still have to file for a permit and submit a full set of drawings. So, CityStructure report is great for your feasibility study. It gives you an idea about the budget you’d have to consider and it’ll make your pre-application meeting review with the planner a lot more productive.

The great part about CityStructure reports is that they help you figure out inexpensively if it’s worth pursuing a land improvement project, like additions, ADU, or a new house, before investing too much time and money.

Should Zoning Analysis be part of a Disclosure package or it's part of the marketing materials?

Planning regulations on a specific lot could be added to the Disclosure package. That means that the seller is aware of the current planning regulations on his/her property, and this is a piece of relevant information worth disclosing to the buyers. The Zoning analysis could also be included in the Disclosure package, but the best place is as part of the marketing materials.

Why the Zoning Analysis in the CityStructure reports are best for marketing a property for sale?

Traditionally Zoning Analysis was performed by the architects for the planning department. The drawings and documentation associated with this analysis follow standards that are great to get a permit but not to be understood by any non-specialist. Considering that the majority of the prospective buyers are non-specialists, you want to present them with the development possibilities of the property in a friendly format.

Our reports were reviewed by hundreds of realtors, brokers, and Risk Managers to comply with the profession's rules and regulations; we've designed our materials to meet the level of understanding of any audience; and we've formatted the findings of our analysis to be appropriate for posting on most MLS platforms, websites and even printed on large boards for open houses.  

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