What is the Entitlement Process in Real Estate?
Find out why land entitlements are crucial for every real estate development and how to get them.
Having an idea of a real estate project is the start of every new development. However, for this idea to become a reality, a developer must take various steps to get the green light from the local government to go from the first sketch to screwing in the final touches.
What Are Real Estate Entitlements?
Real estate entitlements are a set of approvals needed for the right to develop a piece of land. The term entitlements don't refer to any specific approval. In fact, there are a variety of approvals that could be needed based on the particular project and location.
Entitlements aren't given by just one office or department either. There are various cities, regions, and provincial departments a developer might have to get approvals from for different pieces of real estate development.
Common Real Estate Entitlements:
Use Permit
Zoning variances
Rezoning
Site Plan Approval
Architectural Design Approval
Landscaping Approval
Utility Approval
Road Approval
When Do You Need Entitlements?
Real Estate entitlements are commonly required when a vacant piece of land is being developed. However, they're also needed on an improved property when the use, appearance, or landscaping will change.
The extent of the entitlements needed will depend on the project's scope. For instance, tearing down an old restaurant to replace it with a new one will be a much simpler process than developing a piece of vacant land into a condominium.
The Process for Getting Entitlements
The process for entitlements may vary depending on each development project and local municipality.
It's common for cities and townships to have their own master plan that lays out the local government's plan for growth and development. How a particular project fits into the master plan will determine the entitlement process.
The steps for obtaining each land entitlement are generally the following:
Project Review
It's wise to discuss the project with the local planning director. The planning director will usually be pretty upfront with you on how the development fits in with the master plan and mention things you should consider when planning the development.
Zoning Variances or Rezoning
If the zoning doesn't allow for your development and land use, you'll have to ask the planning board to either change the zoning or approve a variance.
Zoning ordinances are sometimes outdated and can be easy to change. Other times, you may have to present a compelling argument about how the development will benefit the community without having a negative impact.
The first stage is to get approval from the planning board. Your local jurisdiction may have a different name for the planning board, like planning commission or planning committee.
You will be required to present your proposed land use and zoning request to the local board. The planning board will ask questions and then vote on whether to approve the change. The results will be passed on to the city council or township board.
If they don't approve the use, they may give you changes to apply to get approval. You may also receive a negative response, which means you're not likely to get your land-use entitlement.
If you receive a positive response and are approved by the planning board, you will move to the city council or township board for a public hearing.
Notices of the intended zoning variances or changes and the development will be sent to residents and businesses in the neighbourhood. They will be invited to be present at the public hearing to give their opinion or ask questions.
The City Council or Township board will consider the public's opinion and comments when they vote on whether to approve the use permit. If approved, you have the green light to continue with the planning process. If not approved, you can appeal the decision.
Use Permit
If you had to request rezoning or zoning variance, there would most likely be conditions that will include the property being used for the specific use you proposed. In this case, you probably won't be required to get a use permit. It will most likely be included in your zoning approval.
If your use conforms with zoning, getting approval for a use permit will be your first step in the approval process. The process is very similar to the process for requesting a zoning change or zoning variance.
It's essential to do your due diligence on the local master plan or planned unit development, because some areas might be designated for particular uses, regardless of what's allowed under the zoning code. For example, an area might be zoned for multifamily housing, but the specific area may be reserved for affordable housing.
You'll start with the planning board and then hopefully move forward to the city council or township board.
The request for a use permit will also be presented at a public hearing, where local residents and businesses will have the opportunity to state concerns and ask questions.
The use permit may have certain conditions, which may include prohibiting ancillary services or products, making specific improvements to the real estate, or not removing trees.
Project Approvals
There are a variety of other approvals that will be required, depending on the jurisdiction and the development project.
These land entitlements mostly have to do with construction. These may also have to go in front of the planning board for approval. You may be able to combine these instead of having to go through the same approval process multiple times.
Some of these approvals have to do with the site plan, the architectural design of the structure, and utility hookups.
To obtain these approvals, you may have to meet certain conditions, such as a minimum amount of parking spaces, having a certain percentage of the land kept as green space, or planting a minimum amount of trees. Just some of the common conditions to keep in mind.
The Riise Approach
Our objective is to develop solutions to the issues raised in the approval process while still addressing the concerns of municipalities and other approval authorities in an effective manner.
Our team of experts at Riise have the appropriate skills to develop and implement an effective strategy for obtaining the necessary approvals.
We assist private and public sector clients in addressing the requirements of municipal, provincial and federal legislation when it comes to approvals. Contact us today to find out how we can assist your organization.