Navigating Washington State's Commercial Zoning Laws
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Like other states, Washington State has zoning laws and regulations determining what can and can't be built on certain areas of land.
Commercial real estate investors looking to buy land for sale in Washington State need to understand said zoning laws: Failing to understand zoning can throw a wrench in the gears of any investment plans.
Here, we've put together a quick guide on understanding zoning laws when buying land for sale in Washington State.
Understanding Zoning Regulations in Washington
Like most other states, zoning regulations in Washington are set at the county and city levels. The main goal of these zoning regulations is to separate residential areas from harmful land uses, protect natural landscapes, and promote quality of life.
Washington's Cities and counties use two types of zoning schemes: unified development codes and development review procedure codes.
#1 – Unified Development Codes
Some counties and cities in Washington State operate on unified development codes that combine land use and developmental regulations into a single comprehensive municipal code. This code might include a single Title that includes zoning codes, review procedures, and subdivision regulations.
For example, Title 40 in Clark County contains a complete code covering land use and regulations policies, including review and permitting procedures.
#2 – Development Review Procedure Codes
Some cities and counties have development review procedure codes, instead. These are chapters of the municipal code that outline procedures, processes, and timelines for development proposals and review procedures.
Unlike a unified code, these regulations don't necessarily provide a unified regulatory and developmental plan. For example, the city of SeaTac's municipal code has separate titles for zoning codes, procedure reviews, and permit applications.
The Impact of Zoning on Commercial Land Investments
Zoning laws, in general, have an extremely large impact on the profitability of commercial land investments: Said zoning laws restrict what commercial activity can and can't occur on that parcel of land.
For example, commercial activity is generally not allowed on parcels zoned for residential use. Similarly, heavy industrial activity is usually prohibited on farmland zoned for agricultural use.
From the perspective of a commercial real estate investor, it's crucial you take the time to understand the exact zoning rules and regulations of the area you're looking to invest in. The last thing you want is to buy commercial land only to figure out you can't develop it the way you want to.
Rezoning Opportunities and Challenges
In some cases, it might be an investor's best interest to rezone land they own. The reason is that rezoning land for a different use generally means more opportunities for development and sales.
For example, say you buy land for sale in Washington State that's zoned for commercial use with the intention of developing an office building. However, say that market demand shifts such that potential returns of office development are not worth the costs, similar to what happened at the onset of the COVID-19 pandemic.
One potential option to reorient your investment strategy is to rezone the land for a different development. You could, say, rezone the land for light industrial use and, instead, build a warehouse.
Rezoning a property might be a more feasible option than selling and then looking for another parcel that's zoned for the appropriate use. The location of a parcel might also make it ideal for a specific use that will require rezoning to perform.
Petitioning for Rezoning
Most municipalities allow landowners to petition for rezoning. Rezoning includes upzoning, which loosen restrictions on development and density, and downzoning, which tightens restrictions on development and density.
However, note that neighboring landowners can challenge a rezoning project on the grounds that rezoning would negatively affect their own property. For example, nearby neighbors might object that rezoning a nearby residential plot for commercial activity might risk contaminating their properties or lowering their own property values.
As such, the rezoning process is complex and long, and may require several legal appeals.
Case Studies of Zoning Success Stories
Zoning laws are generally controversial and often a major focus of political campaigning. Critics of zoning argue that restrictive zoning artificially restricts the market and creates perverse incentives to halt residential and commercial development.
To that end, many have pushed for zoning reform to stimulate commercial development and renew deteriorating urban areas.
Below are some success stories from zoning reform projects across Washington State.
#1 – Walla Walla
After passing new zoning regulations in 2018 that allow residential housing as dense as 75 units per acre, the city of Walla Walla has seen improved development and conversion of properties to affordable and dense housing.
Although the changes are not dramatic yet, planners notice a larger diversity of investment projects.
#2 – Single-Family Housing Changes
In early 2023, Washington State passed House Bill 1110 banning restrictive single-family zoning with the goal of increasing the supply of dense urban housing.
The new law allows property owners to develop duplexes, fourplexes, and sixplexes in nearly every city in the state.
Notably, the bill still allows for exclusive single-family zoning in neighborhoods with pre-existing contracts. However, proponents are optimistic that the new bill will increase housing supply and make Washington's expensive housing market more affordable.
Strategies for Compliance and Maximizing Zoning Benefits
Penalties for violating zoning ordinances can range from mild to severe and, in the worst cases, can force your business to close.
So, it's in your best interest to ensure any land use on your investments is zoning-compliant.
- Keep a comprehensive account of any land development projects and updates so you can double-check changes with existing zoning codes.
- Stay up to date on permits. Permit requirements can change depending on local legislation, so you need to ensure permitting is current to avoid land development delays.
- If you're unsure of the legality of a certain development project, consider talking to a real estate attorney to determine the exact zoning obligations and restrictions.
As with everything in commercial real estate, doing your due diligence when buying land for sale in Washington State is key.
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