Land Development: Can I Develop this land?

The Real Estate Espresso Podcast

Land Development: Can I Develop this land?

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Understanding Land Development Concerns

Shielding prospective real estate investors from unforeseen pitfalls is an essential part of our Land Development Consulting services. One such example involves an inquiry from a client looking to assess the development potential of a piece of land. This article will take you through our initial evaluation and key points we addressed to determine the development feasibility of the property.

Preliminary Evaluation of Land

The case under review involved a piece of land located outside the urban bounty, yet within city limits. It was an area with minimal services; there was no city water nor any sanitary sewer connected to the sewage treatment plant. Despite these limitations, the property owner was interested in transforming the acreage into a low-density residential subdivision. With two creeks running through the property, likely leading to a major waterway, the client was unsure about the impact of these features on the land’s development potential.

The Zoning Hurdle

Our team began by checking the property’s current zoning status, revealing it was designated DR 1, or Development Reserve. This zoning code immediately flagged that the land was unlikely to be developed in the near future. Development Reserve areas are usually preserved for potential future developments, pending amendments to the city’s official plan. Hence, prior to any possible subdivision or rezoning, amendments to the Official Plan would be necessary which generally revised every 10 years. Infrastructure such as water, sewage, and road access also need to be considered in the planning process.

Is it Worth the Investment?

Before committing to the cumbersome and longer process of development, we put our projects through a quick kill due diligence process. If we can’t disqualify the project in minutes, it is worth exploring further. However, in cases like the one described where the project is clearly a no-go from the start, we don’t charge for the blunt advice. Better to kill an unviable project early than waste time and resources on a project that will never materialize.

Our Land Consulting Approach

In operating our development company, our primary duty is to our clients. We strive to approach with clear and upfront communication about the likely success or failure of a proposed project. If a project appears to be feasible, we’ll undertake a more complete due diligence, including full underwriting and design exercise.

Understanding Land Development Concerns

5 Easy Things to Check When Evaluating Land for Development

Check Point	Description
Zoning Status	Verify the current zoning designation of the property to understand permitted uses and potential restrictions.
Infrastructure Availability	Assess the availability of essential services like water, sewage, and road access to support the development.
Environmental Features	Identify natural features like creeks or wetlands that might impact development potential and require special permits.
Official Plan Amendments	Determine if amendments to the city’s official plan are needed, as these can be time-consuming and complex.
Quick Kill Due Diligence	Perform an initial quick assessment to determine if the project is viable before investing significant resources.