Regulatory Framework Affecting Land Development

Land Development from the perspective of the regulators:

Land development laws are the supporting structure that provides order, continuity and uniformity for urban planning. The laws that are in place are produced from a hierarchy of governmental groups representing federal, state, county, local and sometimes tribal and even international interests. Many developers (including myself at times) complain about the complexity and even contradictory rules we have to follow for a project, but to be fair, without the governing regulations it would be the wild west out there. Urban planners shoot for establishing development uniformity within the legal parameters set to ensure agreeable social and environmental outcomes.

My land development goals are to work within the regulatory framework with a focus on a mix of efficiency targets that include: cost control, optimal design, environmental compliance and sustainability for an attractive end product that attracts premium buyers, while being fully regulatory compliant. That, my friends, is not an easy task!

Zoning:

Zoning is a key way to set the big picture plan for a given area and zoning designations are the way that is accomplished. Every state that I know of has designated urban growth areas, as defined by the applicable authority. For the most part, I have never done anything within them. My sweet spot is outside of the urban growth areas which can make the job a little more difficult in some ways since urban growth areas are targeted for higher densities and it’s actually a disincentive from a zoning perspective to develop outside of them. A suggested read on this is Zoning Basics: https://www.landdevelopmentrealities.com/home/2019/9/17/zoning-basics .

TDR’s:

To aim regulatory focus on designated growth areas, we have also seen the emergence of Transfer of Development Rights (TDR) programs. TDR’s are designed to provide incentives to landowners outside of designated urban growth areas to transfer their property development rights to developers within designated growth areas. This helps preserve the rural character outside of the growth zones, but it can get really testy at times since some TDR’s are mandatory, not voluntary. TDR’s add a key feasibility and inspection aspect to the acquisition of vacant land, so beware of impending mandatory TDR’s for properties under consideration for acquisition. For more, see: TDR - Transfer of Development Rights: https://www.landdevelopmentrealities.com/home/2020/2/18/transferring-land-development-rights-mf48n .

I philosophically support both thoughtful zoning designations and voluntary TDR’s, but I do not support mandatory TDR’s. In the end, uniformity of planned growth and the regulatory controls to ensure it are necessary. Here’s why from a personal perspective: over the years I have looked at some absolutely prime rural properties in Washington, Oregon, British Columbia, Idaho, Montana and Florida. Because of poor rural planning and lax permitting way back in the day, I have seen random and junky local conditions that have to do with past zoning, code, and permitting laxity that is not related to the overall economic condition of the area. Some rural areas just don’t have a good track record for historical development and modern regulations aim to change that.

Environmental responsibility:

From a developer’s perspective it hardly seems possible that there could be any additional environmental regulations that must be complied with. I can’t sort them out without legal and environmental consulting and have described the situation from my perspective in Environmental Problems in Real Estate: https://www.landdevelopmentrealities.com/home/2019/4/23/environmental-problems-in-real-estate . The other part is that in over 20 years of raw land development the regulations keep evolving, so it’s a moving target as well. Furthermore, in some cases the rules seem to contradict themselves or are open to interpretation - hence my active use of environmental attorneys and licensed consultants.

Having registered my frustration as a developer, environmental regulation is totally necessary. I have seen properties that were developed decades ago that have negatively and permanently changed the environmental conditions in an area for miles around. I am talking about the kind of activity that would get a modern developer thrown in jail. Back then it was ok for the times, but not anymore and for good reason. One example of the permanent and unrecoverable changes in the Pacific Northwest is hydrology, which is the relationship of water movement and its effect on the land. Rerouted surface water, stream impacts from grading, filled wetlands and diminished aquifer recharge rates, not to mention all the impervious surface roads that have changed natural runoff are examples.

From a regulatory perspective (and that’s the focus here) mitigation and impact fees can provide land banking and money as compensatory payment for unavoidable impacts, but I find it a bit ironic that the impacts still happen…you just pay to do it. That being said, it’s under controlled management which is probably as good as it’s ever going to get. We developers have it tough, but so do the regulators, so we have to work together as a matter of necessity toward a common purpose which is: development within uniform and structured parameters that meets both human and environmental goals.

Not a withering daisy:

I’ve disturbed as much dirt (and maybe more) in my career than a lot of guys, so I’ve done my fair share of changing the face of the earth. For the record, I make no apologies for it. At the same time I think the wise developer should look to understand the regulatory framework not just from a compliance standpoint, but also from a philosophical one, even if it’s only to satisfy self-serving project development goals. It helps to understand opposing viewpoints, like those of regulators and even environmental groups that frequently and actively oppose my rural projects. Knowledge is power, and to the extent we understand the onerous regulations, planning department concerns and opposing viewpoints, we can provide design and compliance solutions to lessen time-to-completion and lost profitability. We are forced by the regulatory structure to work together, so be smart about it and know and understand regulatory and opposing concerns that can affect the project.

Scientia sit potentia … look it up and Good luck!