Zoning Change vs. Rezoning: Why the Difference Matters to Landowners

Landowners may hear that zoning is changing and assume it means their property is being rezoned.

However, a zoning change and a rezoning are not necessarily the same thing.

Understanding the difference can be particularly important when evaluating development potential or deciding whether to sell land.

In Virginia, a rezoning generally refers to an amendment to the zoning map that changes the zoning classification applied to a particular property. A locality can also amend the text of its zoning ordinance, changing the regulations that apply within an existing zoning district. Virginia law allows amendments to zoning regulations as well as district boundaries and property classifications.

From a landowner’s perspective, the difference can be significant.

If you have to apply to rezone your property before achieving a higher-value use, you may be taking on substantial time, cost, and approval risk.

If the locality itself is changing the regulations that apply to your property, then these factors may not apply.

If developers suddenly start contacting you because of a proposed zoning change, understanding exactly what is changing, when it takes effect, and what the new zoning allows will enable you to more accurately value your property.

What Is a Rezoning?

A rezoning typically changes the zoning classification assigned to a specific property.

Consider a property that is currently located in a low-density residential zoning district.

If a developer wants to build a project that is not permitted under the existing zoning, they may seek to have the property rezoned into another district that permits the proposed development.

In Prince William County, for example, the county describes a rezoning as a change to the county zoning map and notes that a rezoning application may be filed when the desired use is not permitted under the property’s current zoning.

In Virginia, a property owner can petition for a zoning map amendment, but approval ultimately rests with the locality. Virginia law also allows local governing bodies and planning commissions to initiate zoning amendments.

This means rezoning generally involves entitlement risk.

The applicant may spend considerable money preparing plans, hiring consultants, responding to agency comments, and navigating public hearings without having certainty that the requested zoning will ultimately be approved.

What Do We Mean by a Broader “Zoning Change”?

“Zoning change” is a broader and less precise phrase.

A locality can amend the zoning ordinance itself, including the regulations governing existing zoning districts.

For example, an ordinance amendment could change requirements related to:

• Permitted uses
• Residential density
• Minimum lot dimensions
• Setbacks
• Building height
• Open space
• Development standards
• Other requirements within a zoning district

A locality may also undertake broader changes to its zoning map or zoning framework affecting numerous properties rather than responding to an individual owner’s rezoning application.

Virginia law recognizes both amendments to zoning regulations and changes to district boundaries or property classifications.

This creates a very different situation for a landowner: Instead of asking the government to change the rules specifically for your property, the government may be changing the rules that already apply to your property.

Why Does the Difference Matter?

Consider two hypothetical properties, both worth approximately $1 million based on their existing use, and both capable of supporting substantially greater residential density under a different zoning framework.

Property A

The owner must apply for a rezoning to achieve the higher density. Doing so may require:

• Land planning
• Engineering
• Traffic analysis
• Environmental work
• Legal assistance
• Application fees
• Public hearings
• Potential proffers or other commitments
• Significant time

Most importantly, approval is uncertain.

Property B

The locality is already considering an ordinance or map change that, if adopted, would permit greater development on the property without the owner initiating the same project-specific rezoning process.

The ultimate development potential in both scenarios is similar, but the path to getting there is not.

The difference can affect the property’s value, timing, risk, and the strategies available to the owner or developer.

Rezoning Risk Affects What a Developer Can Pay

Developers price risk.

If a developer has to purchase land and then spend two years pursuing an uncertain rezoning, the risk affects what the developer can justify paying.

Alternatively, the developer may structure the purchase contract so that closing occurs only after the desired rezoning is obtained.

In that case, some of the entitlement risk remains with the seller.

The seller may receive a higher potential purchase price, but the property could be tied up for an extended period while the developer pursues approvals.

If the rezoning fails, the sale may fall apart.

This is why a property that may yield 20 lots after rezoning is worth less than a property where 20 lots are already permitted by-right, all else equal.

The potential outcome is similar, but the probability, cost, and time required to achieve it are not.

A Locality-Initiated Change Can Shift the Risk

Now consider a different situation.

The locality is rewriting its zoning ordinance or changing zoning classifications in an area, and your property is expected to benefit if the change is adopted.

You did not initiate the process, you have not hired engineers or land-use attorneys, and you may not even have been considering development.

Suddenly, you start receiving calls or letters asking whether you would consider selling.

Why?

Because developers may be evaluating the property based on what they believe could be built if the pending change takes effect.

This can create value before the regulatory process is complete, but it also creates uncertainty.

Proposed Zoning Is Not Approved Zoning

A proposed zoning change should not be treated as though it has already occurred.

Until the applicable ordinance or map amendment is formally adopted and effective, the existing zoning remains important.

Proposals, boundaries, development standards, and timelines can change, or the locality may fail to adopt the proposal altogether.

Therefore, landowners should be careful about pricing a property based on future zoning yet to be adopted.

Developers understand this uncertainty well. This is why their offers may not reflect the full value that could exist after adoption.

Timing Can Become a Strategic Question

If your property is affected by a zoning change expected in six months and a developer offers to buy today, should you sell, wait, or market the property to other buyers?

There is no universal answer.

Selling before the change may allow the owner to transfer regulatory risk to the buyer.

Waiting until after adoption may provide greater certainty and potentially improve the property’s value or market position.

However, waiting also means retaining the risk that the change is delayed, modified, or never adopted.

The decision of when to sell is a risk-allocation question. Who should bear the uncertainty of the proposed change, and how much additional compensation should that party receive in return?

The Comprehensive Plan Is Different Again

Another common source of confusion is the comprehensive plan.

A comprehensive plan establishes a vision for how an area is planned to develop over time, but it is different from zoning.

Fairfax County, for example, describes its Comprehensive Plan as generally guiding land use, while the Zoning Ordinance regulates the type, scale, and intensity of development that may occur within zoning districts. A property can therefore be planned for one future use while still being zoned for something different today.

This distinction is important because a rezoning or other approval may still be necessary even if the property is planned for higher density.

The comprehensive plan can lend support for a rezoning effort, but it should not be confused with an actual zoning approval.

Developers May Recognize the Opportunity Before Landowners Do

Developers routinely monitor:

• Zoning ordinance rewrites
• Comprehensive plan amendments
• Future land-use maps
• Infrastructure projects
• Nearby rezoning applications
• Planning commission agendas
• Development activity

Most landowners understandably do not.

If you have lived on the same property for 25 years, there may have been little reason to follow every local planning initiative.

Developers are incentivized differently.

Finding properties where future development potential may be greater than current market perception is part of the business.

This is one reason unsolicited developer inquiries can occur before a landowner realizes anything significant is happening.

Don’t Assume More Density Definitely Means More Value

Suppose a zoning change increases the theoretical development potential of your property from five homes to 15.

Has the land value tripled?

Almost certainly not based on lot count alone.

Greater density may require:

• More substantial roads
• Stormwater facilities
• Public water and sewer
• Additional engineering
• Open space
• More complicated grading
• Greater permitting costs
• Longer approval timelines

The finished homes may also be on smaller lots and sell at different prices.

Development value ultimately depends on the financial returns of the project, not simply the number of units zoning theoretically permits.

This is where residual land value becomes important.

A developer works backward from the value of the finished project and deducts development costs, vertical construction where applicable, transaction costs, financing, time, risk, and required profit.

The remainder helps establish what the developer can afford to pay for the land.

A favorable zoning change can increase value substantially, but the magnitude of the increase must be logically evaluated.

By-Right Development and Rezoning Should Be Valued Differently

If two properties can each theoretically support the same 20-home project, but one requires a discretionary rezoning, then the opportunities are not equivalent.

One property may involve additional:

• Time
• Professional fees
• Political and regulatory uncertainty
• Carrying costs
• Design revisions
• Approval risk

A developer will generally account for these differences when evaluating a potential purchase price.

This is also why landowners should understand whether a proposed zoning change would make a development opportunity more nearly by-right or whether significant discretionary approvals will still be required afterward.

A Zoning Change Is Usually Only the Beginning

Even when zoning changes favorably, it does not mean the property is ready to build.

A developer may still need to address:

• Subdivision approval
• Site-plan approval
• Engineering
• Stormwater management
• Road design
• Utility design
• Environmental permitting
• Soils and septic issues where applicable
• Bonding
• Construction permits

Zoning determines potential, but it does not eliminate the physical and regulatory constraints of the property.

Accordingly, landowners should be cautious about assuming that a favorable zoning change automatically converts raw land into finished-lot value.

What Should a Landowner Do When Zoning Is Changing?

If your property is affected by a proposed zoning change, the first step is to understand exactly what is happening.

Questions worth asking include:

• What zoning applies today?
• What specifically is proposed to change?
• Who initiated the change?
• What stage is the process in?
• When could it become effective?
• Could the proposal still be modified?
• What uses or density would become available?
• Would development then be by-right, or would additional discretionary approvals still be required?
• What physical constraints affect the property?
• What would a developer realistically build?
• How might the change affect residual land value?
• Is there a strategic reason to sell before or after adoption?

The answers to these questions will provide a solid foundation for deciding what to do next.

Understand the Change Before You Value the Opportunity

For Northern Virginia landowners, zoning can have an enormous effect on development potential.

But statements like “the zoning is changing” or “the property could be rezoned” leave much unsaid.

An owner pursuing a discretionary rezoning may be assuming substantial entitlement cost and risk.

A locality changing the regulations applicable to a property may shift some of the risk.

A comprehensive plan change may improve the case for future development without actually changing what is permitted today.

And even after a favorable zoning change, substantial subdivision, engineering, infrastructure, and permitting work may remain.

A Pre-Listing Strategic Land Assessment can help a landowner understand where a property sits within the overall process, which development paths are realistic, and how regulatory uncertainty should factor into a sale strategy.

Before deciding what a zoning change means for your property’s value, you must first understand what is actually changing and what remains to be done afterward.