An In-Depth Look at Real Estate Entitlements: Everything You Need to Know

When it comes to embarking on a real estate development project, understanding the entitlement process is essential. This intricate process revolves around the intended use of the building, conformity to city plans, and the overall design. In this article, we will explore the different types of entitlements, the length of the process, and when you need to obtain an entitlement.

The Three Types of Entitlement Process

Ground-Up Build

A ground-up build refers to constructing a building on land where no structure previously existed. This type of entitlement is necessary when developing on vacant land or when a previous building was demolished. The process for this type of construction project usually requires going through an extensive entitlement process.

Change-of-Use

A change-of-use entitlement comes into play when there are modifications to the zoning code or the original intended use of the building space. For example, if you are changing a restaurant into a grocery store, you would need to obtain a change-of-use entitlement. Approval for this type of permit often requires obtaining a certificate of occupancy.

Adding a New Facade to an Existing Building

If you plan to change a side of a building or the entire facade, you will need to go through the entire entitlement process before making any alterations. This includes attending design reviews and planning meetings to ensure compliance with the city's general plan or municipal codes. Major changes to the building exterior typically require an entitlement application.

Understanding Entitlements in Real Estate

When Do You Need an Entitlement?

The most common reason to seek an entitlement is when developing on a vacant piece of land. However, entitlements are also necessary when enhancing the appearance, landscaping, or overall use of an existing property. The type of entitlement required depends on the nature of the project. It's important to note that the length of the entitlement process can vary based on the project's scope and size.

The process of obtaining an entitlement can range from 3-12 months and even longer for large-scale development projects. It is crucial to keep in mind that each project and municipality may have specific requirements for the entitlement process.

Cities typically have a master plan that outlines the government's vision for development and growth. The entitlement process involves submitting proposals, technical and environmental studies, and design packages to the local planning department for review. The proposal will be assessed against zoning regulations, local laws, and planning codes. If approved, the plan will then be evaluated for its environmental impact and sent to other city agencies for further approvals.

The final step of the entitlement process involves presenting your plans to the local community in public hearings. This is an opportunity to discuss the project and gain community support. If adjustments are necessary based on community feedback, they should be made accordingly. The final approval will be granted by the city council or the local board of supervisors.

Understanding Entitlements in Real Estate

Zoning vs. Land Entitlements

It's crucial to differentiate between zoning and land entitlements. Zoning ordinances dictate the requirements for building types and their designated uses. The primary purpose of zoning is to ensure controlled and appropriate development in different areas of a community. Zoning restrictions prevent incompatible land uses and protect the character of neighborhoods.

On the other hand, land entitlements are rights granted to real estate developers for specific projects. Obtaining an entitlement allows for development on a specific parcel of land for a particular use. If you wish to change the use of an existing building in the future, you would need a separate entitlement. Adhering to the city's master plan and local zoning ordinances increases the likelihood of entitlement approval.

Understanding entitlements is crucial for successful real estate development projects. While the process may be time-consuming, familiarizing yourself with the process will help you navigate each phase efficiently. With proper preparation and adherence to regulations, your entitlement application should receive approval, allowing you to move forward with your development plans.