Commercial real estate has faced significant challenges in recent years, from economic downturns to shifts in consumer behavior and the rise of remote work. Amid these changes, one factor stands out as a potential game-changer for the industry's recovery: flexibility in zoning.
By re-zoning and zoning variances for different kinds of development than originally intended, municipalities can unlock new opportunities for growth, innovation, and community revitalization.
The role of zoning in commercial real estate
Zoning laws are essential tools for urban planning, dictating how land can be used in different areas. These regulations help ensure orderly development, protect property values and promote public health and safety. However, rigid zoning laws can also stifle innovation and limit the potential for adaptive reuse of properties, which is crucial in a rapidly changing economic landscape.
The need for flexibility
There are three primary considerations for rezoning and variance-granting strategies:
Adapting to market demands:
The commercial real estate market is dynamic, with demand for different types of spaces fluctuating based on economic conditions, technological advancements and societal trends. Hybrid work and ecommerce—both which saw huge growth during the 2020 pandemic—impacted demand for office and retail while increasing demand for warehouses and distribution centers. Flexible zoning can allow municipalities to respond to these shifts more effectively.
Encouraging mixed-use developments:
Mixed-use developments such as our flagship development, CityGate Centre in Naperville, combine residential, commercial and recreational spaces, creating vibrant, walkable communities. These developments also offer environmental benefits by reducing urban sprawl and promoting sustainable land use practices. Flexible zoning policies can encourage the development of mixed-use areas that meet diverse community needs and stimulate economic activity.
Revitalizing underutilized properties:
Many cities have vacant or underutilized properties that could be transformed into productive spaces with the right zoning changes. For example, old industrial sites can be repurposed into commercial hubs or residential complexes, breathing new life into neglected neighborhoods. Flexible zoning can facilitate these transformations.
Next up
Stay tuned for the next article of this two-part series where we will look at real-world, local re-zoning efforts, both successes and challenges.
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