Zoning refers to the system of laws that dictate how particular areas of land can be used. These restrictions control which types of developments can be constructed in a given area.
Different areas of a city or town have unique rules for what types of structures can be built, their permitted uses, maximum building height, area, parking, and other property stipulations. The three most commonly used zones in Los Angeles County are R zones, C zones, and M zones. These distinctions respectively refer to residential, commercial, and industrial zones.
If you are a real estate developer, business owner, or prospective commercial or industrial building tenant, these zoning restrictions can seriously complicate your search for a new business site. Moreover, zoning restrictions can impact building construction, terms of lease agreements, and even your company’s daily operations.
A skilled commercial real estate agent can help you navigate the convoluted world of Los Angeles’ zoning restrictions, and assist you with your search for the best building site or industrial property for your company’s needs.
There are four main zoning considerations to keep in mind as you begin your commercial and industrial property search in a given area:
- Use type: refers to the type of development that’s being constructed in a given zone. The most common use types are residential (R zones), commercial (C zones), and industrial (M zones).
- Density: typically applies to residential zones, and refers to the number of homes or apartments that can be built on a lot.
- Height: controls how tall a building can legally be. This is usually referenced as the number of permissible floors and the acceptable height in feet for a given structure.
- Setbacks: dictates the mandatory space that must be left between a building and its property line.
- Parking: mandates the number of parking spaces a developer must include in the building construction process. Residential parking requirements are based on the number of houses or apartments in a development. Commercial and industrial parking requirements are based on the square footage of the building.
While these laws were established to promote public safety and building integrity, they now present complicated hurdles for developers and businesses to overcome. Misuse of zoning ordinances could even impact an industrial property’s value. Use this guide and the advice of a knowledgeable Los Angeles commercial real estate agent to sidestep the headache that zoning laws can create and find the perfect property for your business.
Now, let’s answer some commonly asked zoning and land use questions.
What is the zoning of my property?
Governments control zoning and, therefore, how land is used. Los Angeles City Planning is the public entity responsible for administering zoning ordinances within the city. If you are interested in purchasing a particular area of land or want to learn more about your zoning restrictions before you begin construction, you can contact the Los Angeles County Department of Regional Planning for information regarding your specific property zoning. On the department’s website, you will find a GIS-NET mapping application. You can type your address into the application’s search bar to quickly access zoning particulars for your property or research a prospective listing.
Commercial and Industrial Zone Considerations
Commercial zones are designated areas of business, which include restaurants, retail stores, and offices. Commercial zones include CR, C1, C2, C4, C5, C1.5, and CM distinctions.
Manufacturing zones were originally developed with logistics in mind, so they are typically located along freight railways to make it easy for industrial businesses to ship their products. However, Los Angeles has experienced a steady decline in heavy industry, so these zones’ land uses have been amended to permit light industry and commercial uses, though restrictions can apply.
M1 and M2 are the most common industrial zones, and both permit C2 uses, including office spaces and shops. Residential uses remain prohibited in these areas.
Types of M Zoned Properties
There are various subcategories of M zones, and each has its own special set of construction regulations and use restrictions.
- CM Zones: refer to Commercial Manufacturing. Uses include wholesale, storage, clinics, limited manufacturing, limited C2 uses, and R3 uses.
- MR1 Zones: these are Restricted Industrial Zones. The following uses are permitted: CM uses, limited commercial and manufacturing, clinics, media products, limited machine shops, animal hospitals, and kennels.
- M1 Zones: Limited Industrial Zones permit MR1 uses, limited industrial and manufacturing uses, no R zone uses, no hospital uses, schools and any enclosed C2 uses, wireless telecommunications, and household storage.
- MR2 Zones: Restricted Light Industrial Zones allow for MR1 uses, additional industrial uses, mortuaries, and animal keeping.
- M2 Zones: Light Industrial Zones permit M1 and MR2 uses, additional industrial uses, storage yards, animal keeping, enclosed composting, and no R zone uses.
- M3 Zones: Heavy Industrial Zones permit M2 uses, any industrial uses, nuisance type uses so long as they are 500 ft. from another zone, and no R zone uses.
What effect does my zoning have on the monthly rent I can collect?
Commercial properties are not subject to rent control restrictions. Therefore, the landlord sets the monthly rental price for their commercial or industrial property. Remember, Los Angeles County has cascading zoning regulations, so the answer to this question is not always so straightforward. As an example, MR1 zones permit the same uses as CM zones and CM zones encompass C2 and R3 uses, but for MR1 zones you are only permitted to rent a residence to an individual specifically tied to a manufacturing space, like a security guard or a shift leader.
The nuances surrounding zone-specific rent restrictions may seem overwhelming, but an experienced real estate agent will ensure your property and lease agreements adhere to all local ordinances. Working with a commercial real estate professional can equip you with the knowledge to maximize your commercial and industrial buildings’ profitability while sidestepping hefty fines for zoning violations.
What business or business users can I rent my property to (or what users are permitted in my property)?
Zoning ordinances dictate which businesses and users of those businesses can occupy a specific commercial or industrial space. Knowing which uses are acceptable in your property’s zone will help you efficiently find tenants for your space.
CM zones allow businesses like automotive dealers, medical clinics, and yoga studies. MR1 uses permit plant nurseries, apiaries, doctor’s offices, and even television studios. M1 zones encompass coffee roasters, welders, and football stadiums. MR2 uses include retail stores, repair shops, and are limited to less than 100,000 sq. ft. of floor area. These are just a few examples of the wide variety of businesses each industrial zone encompasses. For a full list of zone-specific business and land uses, click here.
How can heavy industrial uses/business negatively impact my property?
“Location, location, location” is a common real estate catch phrase. Location is an extremely important consideration for zoning ordinances and also for your property value.
Regarding commercial and industrial property valuations, the process of determining the impact of heavy industry uses requires a more in-depth process. When a property appraisal is performed, part of the process requires the appraiser to determine if the zoning is considered legal, illegal, or non-conforming use (which refers to grandfathered zoning stipulations).
When a Highest and Best Use Analysis is performed, the appraiser will make the following four determinations about your property:
- What is physically possible? Considering the physical structure, this question determines what operational capacities the space possesses.
- What is legally permissible? This part of the appraisal process is where zoning factors into the equation. The appraiser must determine if the property is a legal use based on the zoning ordinance for the area. Next, the process must determine which uses are permitted for the property’s zone.
- What is financially feasible? The appraiser deciphers if the property use could produce a positive return.
- What is maximally productive? This analysis examines which of the permissible zoning uses would produce the highest value for the property.
A Commercial and Industrial Real Estate Agent Can Help
When buying, selling, constructing, or leasing a commercial or industrial space, there are several zoning factors you need to consider. An expert real estate agent well versed in the zoning ordinances of Los Angeles County can help you maximize your property value by determining which zone is right for your company’s operations or business goals. MIG’s experienced industrial and commercial real estate agents successfully navigate the Los Angeles County zoning laws, help commercial and industrial buyers and sellers understand zoning restrictions, and provide you with the knowledge to maximize your property’s potential and profitability.
Hopefully this guide gave you some insights you can apply to your property search and zoning and land use questions. If you need more in-depth information regarding your specific property or zone, contact the MIG Commercial Real Estate Services team today.
MIG Commercial Real Estate Services and Alex Matevosian do not provide legal, tax or investment advice. Any published articles, blog posts, resources or other related material located on this website are for information purposes only. Please seek the advice of an attorney, tax professional, and/or financial advisor for legal, tax or financial advice.