DEFINITION of 'Zoning'

Zoning refers to municipal or local government laws that dictate how real property can and cannot be used in certain areas. Zoning laws can limit commercial use of land in order to prevent oil, manufacturing or other types of businesses from building in residential neighborhoods. These laws can be modified or suspended if construction of the property will serve to help the community advance economically.

BREAKING DOWN 'Zoning'

Zoning outlines what types of developmental and operational use of land is allowed on a given tract. Municipalities tend to partition districts and neighborhoods according to a master plan. This may be done to control the flow of traffic, manage noise levels, reserve living space for residents and to protect certain resources.

Examples of zoning classifications include industrial, light industrial, commercial, light commercial, agricultural, single-family residential, multi-unit residential and schools.

Why Governments Apply Zoning to Structure Real Estate Usage

Local government might ban the use of residential property for business purposes to keep commercial activity confined to specific parts of town. Such zoning can lead to conflicts if residents dispute the designated usage.

Zoning laws can also regulate the details of construction in specific neighborhoods. For example, zoning can limit the maximum height of buildings in a given area regardless of the type of construction allowed. High-rise residences or offices could be banned on particular parcels through zoning regardless if the buildings otherwise comply with the laws.

The presence of zoning restrictions can influence prices when purchasing a piece of property. Real estate might sell at a premium based on how many limits were put in place by the municipality.

In 1926, the Supreme Court ruled that properly drawn zoning ordinances were a valid exercise of the states' governing power. Zoning became constitutional by the U.S. supreme court as a result of the case Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 395 (1926).

Criticisms of zoning laws claim that the practice creates and widens the disparity of quality of life between socioeconomic groups. For example, a township might maintain zoning laws that restrict heavy industrial and commercial development to tracts of land adjacent to lower income neighborhoods. The effects of such policies would let more affluent parts of town avoid the associated noise and pollution.

Alterations to zoning laws are possible even without full repeals of the current legislation. A developer or property owner can apply for variances that would allow certain exceptions to zoning regulations. This would let property be used in ways generally not permitted. For example, the owner of a home-based business might request a variance to allow the operations to continue. Applicants for variances might be required to explain why the variance is needed and how the change will not cause significant disruption or detriment to the surrounding community.

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