Zoning Versus Designated Use
Many people do not understand that there is a difference between zoning and the designated use of a property.
When looking at buying a commercial property, one thing you want to look at is the Property Type listed by the jurisdiction that issues permits for the property. The easiest place to find that is on geodata.org.
Why does the Use matter if the property is in a commercial zone? Because each “Use” has specific requirements for parking, building construction, exits, fire code requirements and accessibility features. Not paying attention to the designated use of the property can end up costing you a lot of money. For example:
- A group of counselors buy a lovely home in the Professional Office/Residential Multifamily zone to be used by their practice. This use is allowed in this zone. However, the property is designated residential. The city required that the group go through the Change of Use process, which included constructing on-site parking, and making interior and exterior handicap access upgrades. The improvements end up costing as much as the house.
- A restaurant wants to move a couple blocks away to a larger location. This is permitted because of the zoning but the new site has never been used as a restaurant before so the city is requiring that the new location be brought up to current code for restaurant use. The building permit also required the payment of impact fees because of the increased activity to the new location.
- An owner added a building to his light industrial land, which was designated Warehouse. He leased two-thirds of the building to a medical user. He was then notified by the permitting jurisdiction that he can’t use the rest of the building (except for storage) because he used all the occupancy and parking for this non-light industrial user. The site was not designed or approved for high occupancy use during the building permit process.
Working with a good commercial broker can help you understand zoning and Change of Use factors that will affect which property makes the most sense for your business or investment.
Submitted by Carolyn Graden