Commercial Zoning: What Every Business Owner Needs to Know

If you operate a business, you need to understand how commercial zoning rules may impact you. For instance, zoning regulations can determine how you can develop a property and what type of activities your business can conduct. To ensure that you aren’t taken by surprise, it is always a good idea to consult with experienced counsel before purchasing or leasing a commercial property.

What Is Commercial Zoning?

Zoning regulations dictate how land may be used, with the goal of creating uniformity and preventing conflicts between different types of property uses. Zoning regulations are often influenced by existing conditions in a particular area, as well as future goals for development. For example, zoning requirements typically reflect the existing built context of a particular area and work to ensure that future development remains compatible. At the same, zoning is also used to foster new and changing development goals. Regulations may incorporate a specific development plan or advance broader goals, such as increased availability of transit services, climate resiliency, or greater walkability.

Zoning rules can impact commercial operations in many different ways. For instance, they may:

• Limit and restrict buildings and structures to specified districts. Regulate buildings and structures according to their type and the nature and extent of their use. Regulate the nature and extent of the use of land for trade, industry, residence, open space, or other purposes.
• Regulate the bulk, height, number of stories, orientation, and size of buildings and other structures. Determine the percentage of lot or development area that may be occupied by structures. Set requirements for lot sizes and dimensions. Specify floor area ratios and other regulatory techniques governing the intensity of land use. Ensure the provision of adequate light and air, including the potential for utilizing renewable energy sources.
• Provide districts for planned developments. This applies if an ordinance approving subdivisions and site plans by the planning board has been adopted. The ordinance must also incorporate provisions for such planned developments.
• Establish reasonable standards of performance for particular uses or classes of uses. Set standards for adequate physical improvements, including off-street parking and loading areas. Require marginal access roads, roadways, and other circulation facilities. Ensure provisions for water, sewerage, and drainage facilities.
• Designate and regulate areas subject to flooding.
• Provide for conditional uses.
• Provide for senior citizen community housing.
• Require, as a condition for any approval, that no taxes or assessments for local improvements are due or delinquent. This applies to the property for which any application is made.
• Provide for historic preservation.

NYC Zoning Resolution

New York City’s Zoning Resolution divides land into districts where similar zoning regulations are in effect. The zoning rules for each district are determined by relevant land use issues, which vary significantly across the city.

New York City is divided into three basic zoning district categories. These are further divided into a range of individual zoning districts. Each district is denoted by different number and letter combinations.

• Residence Districts: These districts are characterized by a range of housing types, from detached single-family homes in R1 Districts to residential skyscrapers in R10 Districts.
• Commercial Districts: These districts are characterized by a range of business activities, from neighborhood retail and services in C1 Districts, to regional commercial areas with department stores and movie theaters in C4 Districts and potentially noxious activities such as gas stations and car repair in C8 Districts.
• Manufacturing Districts: These districts are characterized by a wide range of industrial and commercial activities, including light manufacturing in M1 Districts and heavy manufacturing in M3 Districts.

Applying for a Zoning Permit

When zoning officials review a zoning application, they compare the proposed project to zoning requirements before issuing a zoning permit. Each community has its own master plan, so ordinances vary. It is imperative to closely review them at the outset of the project.

The NYC Department of Buildings (DOB) holds primary responsibility for interpreting and enforcing the NYC Zoning Resolution. Most development in New York City is “as-of-right.” This means a proposed development complies with the NYC Zoning Resolution and qualifies for a building permit from the DOB. Projects requiring special review, approvals, or zoning modifications must be reviewed by the Department and the City Planning Commission.

Seeking a Zoning Variance

A variance is a request by a property owner to use their land in a way that would otherwise be prohibited under existing zoning requirements. Each type of variance has strict legal requirements that must be satisfied in order to gain approval.

In New York City, applications for a variance are considered by the City’s Board of Standards & Appeals (BSA). Property owners seeking a variance must demonstrate that there are “practical difficulties or unnecessary hardships” they face in meeting the zoning regulations.

Similarly, under the New Jersey Municipal Land Use Law (MLUL), a municipal zoning board may only grant use variances and deviate from the zoning ordinance if “special reasons” exist. In general, the development must advance a purpose of the MLUL or the refusal of the variance must impose an undue hardship on the applicant. In addition, the applicant must demonstrate that the variance or other relief can be granted without substantial detriment to the public good and will not substantially impair the intent and the purpose of the zone plan and zoning ordinance.

Given the dizzying maze of procedural and substantive requirements under both state law and local ordinances, it is advisable to retain an experienced attorney to help navigate the variance process. Many applicants are denied variances simply because they fail to understand the complex legal issues involved.

Consult With Experienced Commercial Real Estate Attorneys

Scarinci Hollenbeck can help businesses throughout New Jersey and the New York City metropolitan area navigate the wide range of zoning issues that can impact commercial operations and development. We routinely help clients conduct due diligence on commercial zoning issues, seek variances, and obtain other developmental approvals. Contact us today to find out how our commercial real estate attorneys can help you.