A new kind of zoning ordinance could help – or hurt – development

Since the first U.S. zoning laws in the early 20th century, one of their essential principles has been separating uses. Houses, stores, apartments and offices were kept apart from each other. One unintended consequence was more traffic, as people needed to drive from place to place. Another was that, as jobs and work changed, zoning ordinances require frequent changes to add new uses such as foster pet homes, microbreweries, nail salons, etc. Further, single-use zoning outlawed many of the kinds of places people love, such as historic Charleston or traditional small-town downtowns.

By the 1990s, planners sought another kind of zoning ordinance, one that worried less about what uses happen inside a building – Can that house be used as an office? coffee shop? bakery? – and more about the size, shape and setting of buildings in relationship to one another and to public areas such as streets and sidewalks. This new kind of ordinance is called a form-based code. (Learn more about form-based codes: “So what, exactly, IS a form-based code and why should anyone care?”)

As the City of Charlotte works to update its zoning ordinance, developers and others are exploring what a form-based code might mean. In the commentary below, attorney Collin Brown discusses the pros and cons of such a code.

While the concept of form-based zoning has been around for decades, its practice can vary widely from one community to the next, as can its implications for housing costs, market rents and economic development.

Real estate developers are often wary of the approach, which in some municipalities produces a costly and time-consuming process through which elected officials, planners and neighbors dictate every detail of a building project, from where the windows and doors go to the color of bricks and trim.

This wariness is often well deserved. If a form-based code is written and put into effect in a way that allows politicians and other stakeholders to micro-manage every element of a development proposal, it can quickly become a barrier to the efficient entry of real estate investment into a local market. Instead, developers and property investors will gravitate to neighboring or competing communities, where a less rigid regulatory environment lets them more quickly develop projects to meet market demand, and with less risk and at a lower overall cost.

But if implemented correctly, form-based zoning can sometimes become a welcome alternative to the more traditional, widely used Euclidian zoning. (Euclidian codes refer not to the “father of geometry” but to a famous 1926 U.S. Supreme Court case, Village of Euclid, Ohio v. Ambler Realty Co.) Euclidian zoning codes separate land uses and typically requires developers to navigate a lengthy and complex process.

By prescribing clear and reliable design standards that can be approved administratively, without the need for a rezoning, a form-based code or form-based overlay district can often serve to reduce the time a developer needs to obtain construction permits. That results in projects that effectively fit in with the character of the surrounding community, and that deliver lower-cost housing and commercial space.

The most effective form-based zoning ordinances offer real estate developers the flexibility of so-called by-right development (no rezoning needed) and streamlined entitlement approvals in exchange for complying with clearly delineated design principles that focus exclusively on the building’s interaction with the public realm.

The true intent of the form-based approach is to reorient the planning process to regulate only the public realm – the scale and mass of the building, its setbacks, height and integration with the pedestrian and automobile environments. A form-based code is not intended to regulate the private realm, which would be how the building is used, its aesthetics, colors, design, internal components, and so on.

The key to this approach is in distinguishing between form and aesthetics in building design. Planners should focus on building elements that are easily defined, such as height, mass, setbacks and the placement of driveways and entrances, rather than on subjective elements like architectural style, color and design.

If a form-based ordinance clearly specifies what is required of the developer, and those specifications can be consistently relied upon for streamlined entitlements, the zoning code can help stimulate economic development by reducing project approval times and the associated risk, costs that get baked into a real estate project. By attracting developers and capital, the ordinance can, in turn, increase the supply of new housing and commercial space, helping moderate the natural escalation in rents that occurs in a growing community.

In addition to reducing entitlement risk and approval time, a well-written form-based zoning code also gives developers significant latitude in deciding which uses to incorporate into a specific project. This is particularly beneficial for communities trying to promote more mixed-use developments that blend housing, retail and office components. By letting developers easily switch out one use for another, a form-based ordinance all but eliminates the necessity of a zoning or site plan amendment if the developer needs to replace one type of tenant with another.

On the other hand, a form-based code that requires complying with extensive, predetermined design standards as well as a lengthy process of public review and approval will deter economic development by driving quality development to neighboring jurisdictions that have a simpler process.

Following a basic law of economics, when the supply of new apartments, townhomes and single-family homes in a community goes down that way, the price of housing will consequently rise more quickly.

So it’s critical that, before drafting a form-based zoning ordinance, all affected stakeholders in a community understand how this approach can serve to either stimulate or discourage quality development, depending on how it is implemented.

It is also important to consider the effect the new code may have on local housing costs and commercial rents by either streamlining the entitlement process, or conversely making it riskier and more complicated. Communities hoping to stimulate economic growth, attract quality development and ensure an adequate supply of affordable housing may find that a form-based zoning overlay, appropriately written and implemented, can help achieve many of those objectives.

Collin Brown is a lawyer with K&L Gates. He chairs the Piedmont Public Policy Institute, a 501 (c)(3) organization established to provide independent research, analysis and education on economic development, the real estate and building industry, transportation, the environment and related matters relevant to the Charlotte region. The institute funded a recent study of form-based codes, through a grant from the Crosland Foundation.

Opinions in commentary articles are those of the author and not necessarily those of the UNC Charlotte Urban Institute or the University of North Carolina at Charlotte.