How Do Commercial Zoning Laws Work?

Commercial zoning laws determine the business purposes for which specific properties can be used. They structure land use so that business properties benefit businesses and residents. Let’s take a closer look at what you need to know about how commercial zoning laws work and why they are important. 

What are zoning laws?

Zoning laws dictate what kinds of properties can be located in different areas—or zones—of a city or municipality and the types of activities that are allowed to take place in those zones.

Zoning laws protect businesses and residents by organizing property use so that it satisfies the following criteria:

• Controls community development
• Meets residents’ needs
• Prevents overcrowding
• Promotes harmonious commercial expansion 

Commercial zoning regulations can prevent specific types of businesses from occupying an area or require certain businesses to only operate in approved areas. 

For instance, zoning laws may prohibit superstores in neighborhoods or require liquor stores or tobacco vendors to be located a certain distance from schools. 

While navigating zoning laws may seem daunting, understanding how to comply with commercial zoning laws can increase your business’ potential for success.

How do zoning laws work?

Zoning laws determine what categories of businesses can operate in a certain area. Zoning laws often contain regulations concerning building types, sizes, and materials, health and safety rules, and requirements for parking, signage, and accessibility.

Local governments are typically responsible for setting land use regulations and establishing zoning boards. The functions of a zoning board depend on the location, but the board may clarify zoning boundaries, interpret provisions in zoning ordinances, listen to appeals, grant variances, release reports, and make suggestions about changes to the zoning laws. 

Applying for a zoning variance

Business owners who are restricted from operating their business in a certain area may be able to apply for a zoning variance. A zoning variance permits business owners to run their business in a location typically prohibited by zoning laws. 

The general process of applying for a zoning variance is as follows:

1. Determine if you need a variance. Getting one can be an involved process, so be sure you’re committed to your plan.
2. Check to see if you qualify for a variance.
3. Find out if comparable variances have been approved.
4. Communicate with the surrounding community and work to get their support.
5. Use your variance application to explain why you need one and attach supporting documents.
6. Pay any applicable application or administrative fees. 
7. Make sure the property is cleaned up in case the zoning committee orders an inspection of the site.
8. Ask neighbors in support of the variance to make a statement at your hearing.
9. Attend the variance hearing.
10. Present your reasoning for needing a variance. 

Why are zoning laws important for small businesses?

Commercial zoning laws can help small business owners avoid potential conflict and fines, improve access to businesses, and promote business growth.

Avoiding conflict

Zoning laws can help prevent conflict between businesses and neighboring residents. For example, zoning laws can keep a noisy nightclub from being built in a quiet residential neighborhood. 

Preventing fines

Businesses that violate zoning laws may be subject to significant fines. You can avoid penalties by understanding and abiding by local zoning regulations. 

For instance, the zoning laws in St. Augustine, Florida, contain provisions to preserve historical districts. Businesses located within certain historic areas that don’t adhere to the law’s outdoor display restrictions and color guidelines can face fines of up to $250 per day. 

Improving access

You can improve customer access to your business when it is located in the appropriate zone. 

For example, many shopping areas have transportation and parking options that might not be available to businesses located outside commercial zones. 

Encouraging growth

Choosing a location that is near other businesses—such as in a downtown area or central business district—can help you attract more customers and grow alongside the local economy. 

The 5 main types of zoning restrictions

Zoning laws typically apply to five primary zones: residential, commercial, industrial, historical, and agricultural. 

Residential

Residential zoning restrictions apply to real estate located in residential zones, including single-family homes, apartments, condos, townhouses, duplexes, co-ops, and trailer parks. 

Residential zoning laws often determine the following:

• Maximum building height
• The number of dwelling units permitted
• Yard size
• The amount and types of structures allowed on a property
• What kinds of animals are allowed on a property 
• The categories of home-based businesses that can operate from a property (if any)

Commercial

Commercial zoning restrictions can apply to many types of commercial properties, including retail stores, office buildings, strip malls, and shopping centers that are located in commercial zones. Commercial zoning laws are designed to control commercial development, limit overcrowding, and increase access to business properties.

Along with business type and location restrictions, commercial zoning laws can dictate the following:

• Lot size
• Building size
• Building materials
• Lighting requirements
• Floor area ratio (the size of the structure relative to the size of the zoning lot) 
• Parking 
• Acceptable noise levels

Industrial

Industrial zoning restrictions can apply to specific businesses, including storage facilities, office supply stores, warehouses, research laboratories, factories, power plants, airports, and sewage treatment plants. 

Industrial zones can be broken up into different categories depending on use, ranging from light use (such as research labs or assembly) to heavy use (such as animal rendering or petroleum storage).

Industrial zoning laws often regulate building height, floor area ratio, and set-back requirements (the distance a structure needs to be from a property line, road, or other boundary). 

Historical

A historical zoning district is an area of cultural or historical significance and may contain historic buildings, parks, or other landmarks. Historic zoning districts often have strict guidelines for preserving residences or buildings from a certain time period.

A historic zoning ordinance can include the following requirements:

• Preserve existing historic materials and use only approved paint colors or materials for maintenance or restoration
• Maintain architectural integrity when undergoing renovations
• Conduct repairs instead of replacing features
• Refrain from activities that could damage historic materials

Agricultural

Agricultural zoning restrictions are designed to protect farmland and control the construction of buildings that are not related to agricultural activities. 

Agricultural zoning can be exclusive—meaning only farm-related residences and activities are allowed in the area—or non-exclusive. Non-exclusive agricultural zoning allows but limits the number of non-farm residences. It allows the use of land for non-farming purposes as long as the land is not considered high-quality farmland. 

FAQs

What happens if I start a business without checking zoning regulations?

If you start a business and it violates zoning regulations, you run the risk of getting fined or having to shut down your business. Consider speaking with an attorney before starting your business to ensure that you are in compliance with applicable laws. 

Are zoning regulations the same as an HOA?

Zoning regulations are not the same as an HOA. 

Homeowners’ associations (HOA) are the entities responsible for managing common interest communities (CIC), such as condominiums or subdivisions. An HOA sets and enforces rules for how property in a CIC should be used and maintained, such as requiring property owners to mow their lawns weekly or prohibiting members from running businesses out of their homes.  

An HOA requires property owners to pay fees and abide by the covenants they signed when they purchased the property. Violating HOA covenants may result in fines or other penalties. 

Can zoning regulations be changed?

Yes, zoning regulations can be changed. 

Zoning laws are reformed as local conditions change in an area and can do the following:

• Enable developers to build multifamily homes
• Stimulate the local economy
• Combine residential and commercial spaces through mixed-use zoning
• Create affordable housing