Pinto Capital Investments


Zoning: What It Is, How It Works, Classification Examples

Picture your city or town as a giant puzzle, with each piece representing a unique land use. Zoning is the glue that holds this puzzle together, guiding how each piece fits and interacts with its neighbors. 

Essentially, zoning is a system used by governments to regulate land use, ensuring that our communities are safe, prosperous, and harmonious. By setting rules and restrictions on what types of activities are allowed in different zones, we can create vibrant and diverse neighborhoods that cater to the needs of our citizens.

This article will explore the ins and outs of zoning, including its classifications, to help you better understand how it shapes our communities.

How Zoning Works

There are Zoning regulations and ordinances created by local governments to ensure compatible land uses within specific neighborhoods, districts, and cities. Zoning laws determine how land can be used for residential, commercial, industrial, agricultural, recreational, or other purposes.

The goal of zoning is to ensure that incompatible land uses are kept separate and that there is an equitable distribution of resources available throughout the city.

Legal Framework of Zoning

Zoning laws regulate the size and height of buildings as well as the amount of floor area ratio (FAR) allowed on a property.

State and federal statutes also play an important role in zoning regulations. For example, state legislation may require cities to provide more affordable housing or allow higher density development in certain areas. Local governments must also adhere to any conflicting land use laws established by the state or federal government when creating their own zoning codes.

In addition to traditional zoning classifications like residential and commercial zones, some cities have adopted planning scheme overlays that allow for mixed use zoning in specific locations. This type of zoning allows for both residential and commercial development in certain areas while preserving existing residential neighborhoods from incompatible land uses such as industrial zones or large scale developments that could disrupt the character of the area.

Conditional use permits are another tool used by local governments to control development in specific neighborhoods or districts while still allowing for economic growth through new development projects such as multi-family homes or light industrial facilities on undeveloped land. The purpose of these permits is to ensure that any new construction meets all applicable zoning rules while still providing benefits to the community at large through increased tax revenue or improved access to services like public transportation or green space preservation initiatives.

Limitations and Consequences of Zoning

There are some limitations and consequences associated with zoning that must be considered.

Conflicting Land Uses

When zoning is used to separate incompatible land uses, it can lead to conflicts between neighbors. For example, a residential area may be zoned next to an industrial area, leading to noise pollution or other issues for the residents. 

Affordable Housing

Zoning regulations can also have an effect on affordable housing availability. By limiting the number of dwellings allowed in certain areas or requiring minimum lot sizes, zoning regulations can make it difficult for developers to build affordable housing units. This has been especially true in cities like Austin, San Francisco, New York City, Los Angeles, Seattle, and Washington, D.C. where rising real estate prices have made it difficult for lower-income individuals and families to find affordable housing options.

Economic Growth

Zoning regulations can also stifle economic growth by limiting the types of businesses that are allowed in certain areas or by preventing development altogether. This can lead to fewer job opportunities and reduced tax revenue for local governments. 

Home Based Businesses

Zoning regulations may limit the ability of individuals to operate home based businesses due to restrictions on the type of business activities allowed or limits on how much space may be devoted to such activities. This can prevent entrepreneurs from starting their own businesses and having access to additional sources of income.

Zoning and Real Estate: Impact on Property Owners

Zoning laws are instrumental in determining how land and buildings remain utilized within cities or towns. They can have a significant impact on property owners, as they dictate what types of activities can take place on a particular piece of land. For example, zoning may restrict the size of a building that can be constructed or limit the number of people who can live in a certain area. It is important for property owners to understand their local zoning laws before purchasing real estate.

When it comes to residential areas, zoning regulations typically dictate the type of housing that is allowed in an area. For instance, some neighborhoods may be zoned for single-family homes only, while others may allow for multi-family dwellings such as duplexes or apartments. In addition, zoning laws may also specify the types of businesses that are permitted in certain areas. This is especially true for specific neighborhoods where commercial activity is restricted to ensure the safety and well-being of residents.

Finally, when it comes to multi-family homes, zoning regulations often dictate the number of units that can be built in a particular area and the size of each unit. This helps ensure that there is adequate space between dwellings and that they meet all safety requirements. Zoning laws may also specify parking requirements and other restrictions related to multi-family dwellings.


Zoning plays an essential role in managing urban growth. By regulating what types of activities can take place within certain areas, it helps cities and towns develop responsibly while also preserving public safety. Zoning also impacts real estate values and land use patterns, allowing them to be tailored to meet the needs of the community. It is clear that zoning has a significant impact on our cities and towns, and it will continue to do so for years to come.

Anthony Pinto
Anthony Pinto
Anthony Pinto is the founder and CEO of Pinto Capital Investments (PCI), a real estate investment firm focused on acquiring affordable and workforce multifamily properties and apartment buildings through syndications. Since 2019, PCI has gone full cycle on 2 large apartment complexes (+100 units) with an IRR in excess of 85%.