Land entitlement is a legal process in real estate that involves gaining approval for a development plan.
While the process is often lengthy and relatively complicated, it’s an essential aspect of development since it determines what is able to be done with the property in question.
This article aims to provide a comprehensive and detailed guide about the entitlement process and its importance for development.
Entitlement Process: A General Overview
Because of how complicated the entitlement process can be if you’ve never been through it before, likely the best way to explain how the process works is by detailing each specific step of the entitlement process.
The primary elements of the entitlement process include:
- Any kind of commercial development will first need approval from the appropriate Development Review Board or Planning Department Review Division.
- The land use pre-application that your development team creates must comply with any local codes.
- The Planning Department will set a meeting that’s aimed at reviewing the project you’ve proposed. During this aspect of the process, additional factors like elevations, landscaping, and land site will also be approved. When this meeting occurs, you will be required to provide the necessary environmental information, which comes with some fees.
- In the event that your development plan isn’t approved, you can appeal this decision with the City Council, the process of which differs with each city.
- When your plan is formally approved, the next step is to get your design approved so that you can receive the proper master use permits. To obtain design approval, your architect will be required to send in plans for the building as well as the surrounding landscape.
- A hearing with the neighborhood will then be held, which may require you to send out notices or place info on the city website. The hearing will take the form of an open-house meeting, which is among the most important components of the entire process. In order for development to begin, the neighborhood will need to first approve. Even if every other aspect of this process has gone smoothly, there’s always a chance that the neighborhood could reject your proposal.
- Keep in mind that the presence of wetlands at the site of the development project can complicate matters. You may need to obtain documentation that details whether or not the land is a part of the Wetlands Act. If some of the land is covered by the Wetlands Act, it may be better to donate that portion of the land or set it aside.
With these steps in mind, the process should be a relatively straightforward one as long as there aren’t too many complications. When you’re preparing for the entitlement process, there are a few tips you should keep in mind, which include:
- Hire the right team – The team that you hire for this process should have substantial local experience and fantastic reputations throughout the city, which applies to your engineering team, land use attorney, and environmental consultants.
- Create a comprehensive timeline – You should create a detailed timeline on the entitlement process for the municipality where your development project is set to occur. The steps mentioned previously can be used as a base for this timeline. If you don’t have easy access to a timeline that can be addressed whenever it’s needed, you could end up not being prepared for the final aspects of the land entitlement process.
- Identify every cost – The costs related to the land entitlement process should be available at your local planning department. It’s recommended that you speak with a land use attorney about these costs since they can range from a few thousand dollars to hundreds of thousands of dollars.
- Identify all exceptions – Make sure that you thoroughly look for any aspect of the development project that would require an exception. If you don’t make a detailed list of exceptions at the beginning of the project, approval of your plan could be delayed.
Examples of Entitlement
There are many different types of entitlement that could apply to your specific situation, which include:
The zoning of land determines what is able to be done with the land. In the event that the area has yet to go through this process for the intended use that you have for the land, you may need to go through a rezoning process. It’s important to understand that rezoning is not always possible.
If the site that you want to develop on has not been outfitted with utilities, it’s possible that you would be required to obtain approval for adding utilities. Some of your land may also need to be donated directly to the city so that the proper utilities can be installed.
These variances can include building heights, setbacks, and parking spaces.
In some cases, it’s necessary to obtain additional approval for any landscaping that you are going to complete during the development project.
If roads don’t currently connect to your property, approval may need to be obtained before you will be able to create them. Easements may also need to be considered.
A conditional use permit could be necessary for your specific project. This type of permit is typically required when development would lead to negative impacts to the surrounding community, which could include increased noise or traffic.
Why is Entitlement Important?
Entitlement is highly important because your project will not be able to go forward unless you are able to obtain permission from numerous regulatory agencies in the area as well as the surrounding community. Since this process can determine if your development project can proceed, it’s critical that you’re fully prepared for what the process entails. Throughout the entitlement process, you will almost certainly be asked numerous questions from local residents, government leaders, and city planners.
If you are unable to provide in-depth answers to all of these questions, your plan could be rejected entirely. At the very least, the process would take longer to complete, which is why preparation is necessary.
If you still aren’t sure about how this process works and why it’s important, you can contact Crest Real Estate to speak with one of our representatives and learn more about how we can assist you.
Entitlement Risks and Challenges
There are many risks and challenges that come with going through the entitlement process for a project of yours. These risks can be separated into process risks and political/community risks.
The process risks that you should be aware of include:
- The planning department that reviews your case will also be tasked with looking at the various environmental and technical studies that have been conducted, which is necessary to determine how the project will impact the local population and environment. These studies are performed by independent consultants to assess issues like transportation and air quality. Any problems that are identified in a study can delay your projects for months or possibly years.
- Your project will also be required to go through additional agencies for approval, which means that separate reviews will be performed by the fire department, utility providers, public transportation providers, and the parks and recreation department. These entities might also identify problems with your proposed project.
- New legislation could be introduced that would pose a problem to development of your project.
- Your staff may not have the right experience for this process.
- Your project could be affected by various zoning or code violations that were missed in the past.
The political and community risks for your project might include:
- The final approval vote for a development project is usually made by the City Council or a board of supervisors. They will almost always take input from the planning department and local community into account. Members of City Council are elected to their positions, which means that they will likely listen to what their constituents have to say.
- If your project is in the path of political goals, doesn’t benefit the public, or is perceived to be negative by the community, the City Council could be a challenge.
- The problems you might need to overcome include everything from making changes to your project to stopping work on the project altogether.
Assessing and Mitigating Risk
If you want to successfully complete the entitlement process, it’s highly recommended that you take steps to assess and mitigate risk. For instance, having the right members on your team can go a long way towards easing the concerns of the planning department as well as the local community. Knowing how the entitlement process works can also help you mitigate risk by making sure that you aren’t surprised by any of the proceedings.
When it comes to the political and community risk, you can mitigate this risk by reviewing other plans in the area that were approved or rejected in the past and by understanding the needs and desires of the city and district as a whole. If you know what concerns the local community typically hold, you will be better prepared to address these concerns when it comes time for the neighborhood to review your proposal.
Assessing and mitigating risk benefits you because it gives you a small amount of control over how the entitlement process goes. Mitigating risk may be able to save you a significant amount of both time and money when it comes to developing your project, which is why the aforementioned steps are important.
Get Started With The Land Entitlement Process!
When you want to get started with the land entitlement process, you should first work on creating a land-use pre-application that complies with all of the local codes. Once you’ve created this application, it should be taken to your local planning department, which effectively begins the land entitlement process.
Jason Somers, President & Founder of Crest Real Estate
With over 15 years of professional experience in the Los Angeles luxury real estate market, Jason Somers has the background, judgement and track record to provide an unparalleled level of real estate services. His widespread knowledge helps clients identify and acquire income producing properties and value-ad development opportunities.