Zoning Fundamentals
Zoning is the government's power to regulate land use, determining what can be built where. A parcel zoned C-2 (general commercial) might allow retail, restaurants, and offices but prohibit manufacturing or residential uses. Zoning controls not just use but also density (floor area ratio — FAR), height limits, setbacks (distance from property lines), parking requirements, and signage. A site with FAR 2.0 on a 10,000 SF lot can support up to 20,000 SF of building area. Zoning profoundly affects property value: a rezoning from residential to commercial can multiply land value overnight. Understanding zoning is essential for CRE investors because the highest and best use of a property — the most profitable legal use — is defined by its zoning designation.