Regulatory Process and Infrastructure

Every city has a different idea of what the highest and best use for their space may be. This is typically accomplished through city planning and zoning ordinances. These measures are put in place to encourage development that will best benefit the local area. A city planner may have the best intentions, but that does not mean they are always correct in their assumptions. It is the job of the developer to work with regulatory agencies to create financially feasible developments that benefit the community as a whole.

The entitlement process is not always an easy path and may require hard work and compromise to achieve the desired outcome. The government has put in place both physical and financial barriers that may prevent development. Limiting physical factors may include things like zoning ordinances, environmental controls, and storm water runoff requirements.

• Zoning ordinances - These restrictions are put in place to limit certain types of development in a given area. The developer may be able to work with city officials and and the local community to have them changed to meet the needs of the developer.
• Environmental Controls- Environmental restrictions are put in place to prevent harm to the local ecosystems and the residents that reside in them. Environmental studies such as soil tests should be conducted to ensure that no damage is being done to the area. They can also benefit the developer by making them aware of the conditions of the site on which they are planning to develop.
• Storm Water Runoff - These restrictions are put in place to prevent flooding. They also help keep individual properties from negativity impacting each other by restricting how and where storm water run off is allowed to go. The developer is typically able to meet this requirement through site grading and the use of detention and retention areas.

Financial regulatory processes may have a negative or positive impact on a developers decision to build.

• Property Taxes- Property taxes are decided by the government and are a means for the local area to raise money. An area may have high property taxes and thus discourage the developer from entering the market or seeking a different one. Property taxes incentives may also be used to encourage development in an area.
• Development Incentives- Development incentives such as Historically Underutilized Business Zones (HUBZ). These are areas that have met the criteria for being categorized as underutilized and typically have a low average household income for the area. The government may offer incentives such as PACE or property tax breaks to encourage development in these areas.