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ZONING VS. NO ZONING: A LOOK AROUND TEXAS

In our last blog, we discussed how zoning and land use regulations impact real estate values. It’s no secret that different types of zoning can affect value in different ways. But what happens when there’s no zoning at all?

Houston is an interesting case study in this area, because the city has no zoning in place. In fact, Houston is the largest US city to lack zoning laws. While Houston is governed by a code dictating how land can be divided, there are no laws dictating land use. 

Many other cities in the Houston MSA have followed Houston’s lead in having no formal zoning, though some have implemented land use controls.

HOUSTON'S ALTERNATIVE PLAN

It’s easy to believe that with no zoning laws, the city of Houston is simply a 600‐square‐mile free‐for‐all. However, the same Houston citizens that voted against zoning laws three times in the past century comply with other sets of rules—some formal and some not.

 

Many patterns emerge over time as neighborhoods develop, often strengthened by social pressures. For example, it would be strange to see a factory beside a fancy restaurant, or a daycare beside an adult novelty shop. One tends to be less valuable or popular when the other is present beside it.

 

At the same time, some patterns emerge based on demand. Even without zoning laws, a storefront in the middle of a residential area likely won’t do as well as it would in an area with high traffic.

 

In a more formal way, local governments provide codes regulating land division. This can be as simple as regulating how large a lot must be to house residents or as complicated as creating parking requirements for different locations and business types.

 

Homeowners Associations, or HOAs, also make some rules. Everything from paint colors to alcohol consumption can be—and sometimes is—regulated by these groups. As with any regulating body, they vary in their strictness.

The key is that a lack of zoning ordinances by no means signifies a lack of limits, either social or legal, on what’s allowed. Houston’s varied skyline may not be as organized as those of other cities, but there are patterns for those willing to look for them.

AUSTIN CONVOLUTED CODE

Austin, on the other hand, has an abundance of zoning ordinances and land use codes.

 

At the beginning of the year, the city set out to simplify zoning and promote new areas for affordable housing development. The hope was to meet the city’s goal of adding 60,000 new residential units at or below 80% Median Family Income within 10 years. By clarifying the code, they cut down surprise expenses incurred by owners and developers.

"We kind of layered code on top of one another, and so when a builder or a landowner goes to make changes or build something new on the land, it becomes really complicated and really expensive," says Audrey McGlinchy, an Austin‐based city hall reporter.

The existing code was extensive and hard to understand. Rewriting it in a way that’s more understandable should make development cheaper in the long run because guidelines for growth will be clear cut.

Supporters of the revision are also looking to find leeway for a wider variety of housing available within the city. While there are many places zoned for single family homes or apartment buildings, there are few mid‐sized homes available or homes at mid‐range prices.

While the second reading of the draft was approved in February, a judge then voided the act in March after a group of 19 existing property owners sued. This overruled the first two votes of approval in the name of protecting the property owners’ rights to protest.

PROS AND CONS OF ZONING

It’s impossible to look at the two cities explored above and decide whether zoning is a good idea or not. Austin and Houston each offer benefits to residents and come with their own problems.

Consider these pros and cons of zoning.

Pros:

  • Property values are protected, and sometimes enhanced, based on set permissions for what can be built nearby.

  • Existing neighborhoods or structures can be conserved or preserved.

  • Zoning can ensure adequate light, privacy, and noise levels in residential areas.

  • There is some control against gentrification when zoning is used to ensure that housing prices in an area are affordable and within range of other necessary services.

  • Land use is more controlled for compatibility via legal measures instead of just social.

Cons:

  • All individual property owners lose some rights in order for the community as a whole to be better served.

  • Development costs can increase by complicating processes and mandating structure types in different areas.

  • Zoning may decrease the value of or slow development in previously existing locations as they navigate more regulations and have fewer permissions for change.

  • Zoning can sometimes contribute to gentrification if the regulations are such that they raise construction prices and, by necessity, the resulting sale prices.

  • Residents in areas with pre‐existing zoning ordinances may be less inclined to push for change or new development in the area.

WHAT ZONING HAS TO DO WITH FUSEGIS

Appraisers, brokers, and others in the real estate industry can do their job better if they are aware of existing zoning and regulatory laws in the area with which they work. Those in the Austin area especially can benefit from zoning layers on sata platforms such as FuseGIS as they navigate complicated and sometimes overlapping rule systems.

When a user can accurately identify the zoning ordinances that affect a specific property, they become more valuable to existing and potential clients. 

Interested in finding out how FuseGIS works and how it can make your job easier? Schedule a demo today.

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