5 Types of Real Estate Zoning & How They Impact the Buying Decision

by Dana-Jean LaFever 03/10/2020

Image by StockSnap from Pixabay

A neighborhood is a neighborhood. And a business district is a business district, right? Unfortunately, it's not so cut and dry. There are actually nine major zoning types in most areas. And these can impact things like home use, home value, and property taxes. Zoning can change over time.

Let's explore the five you're most likely to encounter. 

1. Commercial

Generally, this property is intended exclusively for money-making purposes.

Commercial zoning has several sub-categories that may define how the land can be used. This varies by city but may include:

  • Office space
  • Shopping 
  • Night club
  • Hotel
  • Apartments
  • Certain commercial buildings may have added restrictions such as distance from a school or residential area. As a home-buyer, it's important to consider how commercial property near you is zoned. For example, if an apartment complex may go up in that vacant lot down the street someday, this may impact whether you want to move here now.

    2. Residential

    Residential zoning can include a wide variety of housing types:

  • Single-family
  • Duplexes
  • In-law units
  • Garage apartment rentals
  • Trailer parks
  • Condos
  • Tiny homes
  • Home-based businesses
  • Whether these are allowed depends on local and community codes. For example, many city ordinances may state that mobile homes are not permitted in city limits. This may impact tiny houses as well.

    Residential zoning typically prohibits "farm animals". So building a barn or keeping a cow in the back yard may be against the law. What is permitted may impact the community and home values change over time. So it's vital to consider.

    3. Rural

    Rural zones cover land outside a metropolitan area or in between towns. People of this property often have more control over what they do with their land. They'll typically pay less for land in these areas as well as fewer taxes. That also means that homes may appreciate less in these areas.

    But keep in mind, if rural land is close to city limits, it may become residential at some point. This may increase your home value because you now have access to city services. But you'll also see property taxes rise.

    4. Historic

    When cities want to maintain the charm of an older part of town, they may classify it as historic. If you move here, you will have to comply with rules intended to keep an original style. But as a trade-off, you may be entitled to grants and federal tax credits. If well-maintained, a historic home can be an exciting place to live.

    5. Aesthetic 

    Aesthetic districts are designed to maintain a unified aesthetic throughout the neighborhood. This makes the community more desirable. In theory, this keeps house values on the rise. They are often run by HOAs who may dictate for example:

  • Outside paint colors
  • Types of shrubs
  • Fencing
  • Mailbox style
  • Real Estate Zoning & Buying a Home

    Zoning is a crucial part of the home buying decision. It influences both what you can do with the property and how well the property holds its value. For more home buying tips, follow our blog.

    About the Author
    Author

    Dana-Jean LaFever

    Hi, I'm Dana-Jean LaFever and I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.