Entitlements: An Under-Utilized Process to Quickly Increase a Property’s Value
Updated: Nov 22, 2022
What Are Entitlements
Entitlements are vested rights that allow you to develop a property for a certain use. For example, a 20-acre parcel of land zoned agricultural can be rezoned residential, commercial, or industrial. By doing so, the land has a vested right for that specific use and vested rights add value to land. Think of it as a base model car versus with one with all the options. The more vested rights, or options, the land has, the greater its value.
An Example of an Entitlement
Zoning, a type of entitlements, includes residential, commercial, and industrial classifications with varying subcategories that regulate density and use. If a 20-acre parcel is rezoned from agricultural to residential that allows for one home per acre, then property value has increased in the eyes of builders and developers. However, if the same parcel is rezoned from agricultural to residential that allows for four homes per acre, the property will command a premium over the lower density use. Simply put, developers and builders value a property based on the number units, whether it’s homes or apartments, that it can accommodate.
Reviewing the Entitlement Process
The entitlement process begins with a review of the local comprehensive plan—a document that guides the future use of undeveloped land within a municipality’s boundaries. Any rezoning request will be compared against the comprehensive plan to ensure that it conforms to the future land use plan.
Meetings with city staff and department heads, planning and zoning board members, and local elected officials are the next step in the process. With few exceptions, Alabama delegates zoning decisions to the city council or county commission, while planning and zoning board members and municipal staff serve in an advisory role. In other words, regardless of others recommendations, elected officials have the final zoning authority.
Once zoning is achieved, a team of consultants can start the subdivision and permitting process. Unlike rezoning, subdivision regulations must meet a set of objective criteria through a process known as preliminary plat approval. It’s up to entitlement consultants to ensure your plans meet the municipal requirements.
In our next article, we will take a look at the other types of entitlement holders and permits to consider for compliance with municipal, state, and federal regulations.