What should entrepreneurs know about zoning regulations?
Zoning regulations determine the type of commercial activity you can carry on in a given area or locality. One of the earliest decisions in the life of a startup is, “where do I start my business?” The answer may be as simple as walking out to your garage or you may need to rent commercial space in a strategic location. In either case, you will have to investigate the zoning designation of your anticipated location of operation. The land may be zoned in a manner that does not allow your type of business, or any type of business, on that piece of land.
Overview of Zoning
Zoning is the designation that your local town or municipality gives to land within its legal authority. Zoning is carried out by a board or administrative agency that makes determinations, after following legal protocol, about the appropriate potential uses of certain pieces of property. The zoning board will generally publish a regulatory guide of the zoning process within that municipality.
Zoning Designations and Permitted Uses
Zoning designations regulate land by its permitted uses (the activity that an individual or business may conduct on the land) or limits certain characteristics (height, width, color, building material) of the type of building that can be built on the land. The types of land designations and their permitted uses are as follows: residential, mixed residential-commercial, commercial, industrial and special (e. g. Utilities or power production, event venues, airports, etc.). The zoning will generally have several sub-categories. Each city or municipality has its own zoning regulations. You should contact your local municipal government office to obtain a record of the local zoning regulations.
Local regulations for businesses often restrict the business operations in the following ways:
- The number of employees that the business can employ at the location.
- The amount of in-coming and out-going traffic that the business can allow or cause within the area. This can greatly hamper business operations by affecting the shipment or delivery of goods or supplies to or from the business.
- Business signage and utility usage.
The important thing to remember is that, if the zoning board zones a particular area in a certain way, individuals or businesses cannot carry on activity within that specific area.
The procedures for zoning are codified in state codes, which regulate or set the standard that local governments must following in carrying out zoning regulation. At a bare minimum, due process requires that the local government give public notification and opportunity to comment on the intended zoning designations of land. Giving notice generally comes in the form of public notice is a state sanctioned newspaper, posting on the administrative website, and physically posting notice on the subject property. Residents will have the opportunity to submit written opinion regarding the zoning of the land. Depending on the situation, a local resident may have the opportunity to present a verbal opinion before the zoning commission.
This begs the question of what happens if land is re-zoned after a business begins activity? Generally, a business (or rather its owners) has certain constitutionally protected rights. If the Government changes the zoning designation in a manner that halts the business’ operations, then this may constitute a “taking” by the government. Under the “Takings Clause” of the US Constitution, the local Government will have to show a specific government purpose (for the good of the general public) for the taking and pay just compensation to the owner.
Variances to Zoning Regulations
If a location is zoned in a manner adverse to an individual or business, then the individual resident or business may request a variance from the local zoning board. A variance is a type of permission to conduct a specific activity on designated property without rezoning the land. These regulations are broadly worded to allow for judicial interpretation in a case challenging a use, which comes before a court. Case law for your state would outline the factors that a court would consider in determining whether there is a violation of the local regulations.
Conclusion: When starting a business you must determine the areas that are zoned appropriately for your type of business. Once you have designed these areas, this will help narrow down the considerations for business locations.