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Property Zones FAQ

Property zones near the Menlo Group headquarters
Property zones near the Menlo Group headquarters in Tempe

When dealing with commercial real estate, you will need an understanding of your city’s zoning ordinances. We sat down and answered some of the most frequently asked questions about property zones:

What is a property zone?

Property zoning refers to local regulations that determine how real estate in an area can be used. These regulations may specify how land can be developed, how tall a building can be and what types of businesses can occupy a space.

How are property zones determined?

Your local government officials determine zoning based on their master plan for your city. They take into account transportation routes, sound ordinances, natural resources, areas of historical significance and other factors when determining property zones.

What are some common property zones?

Each municipality determines its own classifications, but as real estate professionals, we commonly see the following property zones:

  • General commercial
  • Commercial office
  • Industrial
  • Light industrial
  • Planned area development
  • Residential
  • Agricultural

Can zoning change?

Governments may change an area’s zoning to best benefit the community. They hold public hearings to get community input on the proposed changes before making a final decision. You can request a zoning variance or use permit if you would like to use a property for something outside its current zoning.

Is an opportunity zone the same as a property zone?

Opportunity zones have been a hot topic in recent years after the U.S. government passed the Tax Cuts and Jobs Act in December 2017. Government officials designated certain areas as opportunity zones, offering tax incentives to those who invest in these distressed communities. City zoning codes would still apply in these areas.

Still have questions? Contact us and we’ll connect you with a member of our real estate team. You can also check out this blog post to learn other common commercial real estate terms.

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