If you're looking for a new real estate investment and are doing your due diligence on zoning, you may come across the term "buffer zone." A buffer zone can impact the outcome and value of a property and should be taken into account when running numbers on a property. This article will help you gain a better understanding of zoning, specifically buffer zones, and how it can both help and hurt a real estate investment.
The basics of zoning
Zoning regulation helps designate areas including vacant land, lots, or existing properties for a specific permitted use. In general, you'll find residential, commercial, industrial and agricultural zoning laws, which can be further broken down into even more specific categories like single-family, multifamily, historical residential areas, and beyond. It's typically determined by a planning commission for that area's municipality and put in place to guide development and help improve overall property value so each use is as appealing as possible to its property owner.
Investors need to have a comfortable understanding of zoning for their real estate market because it can dictate any number of things related to modifying, developing, and utilizing land. There may be floor area ratio restrictions, a required easement near a water body, or minimum parking based on the use. Zoning ordinance is not a suggestion; it's an enforceable regulation that if ignored can result in significant fines for the landowner.
What is a buffer zone in real estate?
A buffer zone is a piece of land that separates one property from another, typically utilized between two distinct zoning uses, like industrial and commercial districts or residential and agricultural. A buffer area can be divided by a solid structure, vegetation, or even open space like a park or busy road, which filters or otherwise separates one use from another. Local government will create specific guidelines based on the interaction and overall layout of the city.
Buffer zones are part of a comprehensive plan to keep the uses from encroaching on each other or otherwise creating negative impacts on others' use. For example, most businesses in a commercial district wouldn't want their shop located next to a manufacturing plant that produces loud noises and smells. That same plant wouldn't want pedestrians wandering past while trucks go in and out with materials. This zoning requirement can be a great benefit to the investor, since it can help improve real estate values and lead to happier residents or tenants.