1. LAND USE, PLANNING, ZONING, AND ENVIRONMENTAL HAZARDS
LEARNING OBJECTIVES
Define planning and zoning.
Explain how economic principles help to determine land use.
Cite reasons why the market system may not maximize the net social benefits of land use.

2. LAND USE, PLANNING, ZONING, AND ENVIRONMENTAL HAZARDS
LEARNING OBJECTIVES
Identify two bases for legal attacks on zoning.
Identify the principal provisions typically contained in state growth management legislation.
Explain what is meant by the “new urbanism.”
Identify the major types of environmental hazards.

3. DETERMINING LAND USE Real Estate Markets: Two Land-Use Principles:
allocate existing space
supply and adapt space to meet changing needs
Two Land-Use Principles:
As transportation costs increase, the value of land tends to decrease relative to similar parcels with lower transportation costs.
As land prices increase, capital investment intensifies.

4. DETERMINING LAND USE The Market Solution Externalities
Although market forces tend to produce groups or patterns of land uses, economic advantage may also accrue to competing and inharmonious land uses.
Externalities
negative externalities
positive externalities

5. PRIVATE RESTRICTIONS
Land use restrictions can take the form of restrictive covenants and easements in deeds and subdivision plats.
Two limitations of private restrictive covenants include:
enforcement, and
geographic scope.

6. PUBLIC PLANNING FOR LAND-USE CONTROL
Public land-use planning involves the development of guidelines and criteria for the determination and control of future land uses in a community, or geographic area.
development of a comprehensive plan
Planning Flexibility
PUDs
performance zoning

7. PUBLIC ZONING FOR LAND-USE CONTROL
Zoning is the regulation of land uses, population densities, and building types and sizes by ordering the uses of land according to zones, or special districts
Construction quality & safety issues are regulated by building codes, fire codes, or health & safety standards.
Zoning is intended to control negative externalities.

8. PUBLIC ZONING FOR LAND-USE CONTROL
Legality of Zoning
The Taking of Issue
Inverse Condemnation

9. INCONSISTENCIES WITH PRIVATE MARKET OUTCOMES
Land use planning and zoning attempt to control growth and minimize externalities; however, they may have unintended consequences.
property value effects
congestion
urban sprawl

10. Growth Management
Communities and states, particularly those experiencing rapid growth, have attempted to “manage” growth in order to maintain adequate levels of infrastructure and service.
Methods include:
adoption of comprehensive plans
concurrency and growth impact fees
economic and environmental impact studies
urban service areas, extraterritorial jurisdictions
growth limits and moratoriums

11. New Urbanism
New urbanism represents one method advanced to “remedy” some of the typical problems that accompany urban growth (i.e., crime, congestion and isolation).
Design tenents include:
small front-yard setbacks with front porches
narrow residential streets
mixed-use (commercial / residential) development

12. ENVIRONMENTAL HAZARDS
Government Regulation
federal, state, and local responsibilities
owners responsibilities
Types of Hazardous Materials Include:
asbestos, fiberglass, polychlorinated biphenyls (PCBs), leaking underground storage tanks (LUSTs), lead paint, and radon.

13. ENVIRONMENTAL HAZARDS
Implications for Real Estate Investors
Prospective investors, developers and lenders generally require environmental risk assessments.
Types of Environmental Risk Assessments
Phase I EVA
Phase II EVA
Phase III EVA