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UPDATED: Jul 16, 2021
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Contract zoning is a zoning technique for land use reclassification with a private party, based upon conditions not imposed on others in the same classification. A particular area which is zoned for one type of development is rezoned to another classification based on an agreement between the government and that party who will be using the land.
Understanding Contract Zoning
The government and the private party who uses the land essentially enter into a contract regarding the land’s use and regulations placed upon it. The government, which is always one of the parties, both accepts and enforces the agreement, in addition to doing the necessary rezoning, which is restricted in the contract with the developer. Although the art of contract zoning can sometimes alleviate the problems of traditional zoning classification by allowing a developer in the area, but with restrictions on his land use, this technique has been argued to be used notoriously for private benefit and not often considered beneficial to the community or public at large. Contract zoning is not actually a specific type of zoning code or zoning regulation, but is a legal term a court may apply to such a zoning arrangement.
Examples of Contract Zoning
If an area is zoned for residential use, but a business wants its land use to be commercially zoned, it would be considered contract zoning if the government rezoned that particular area as commercial, based on an agreement by the business to restrict their use to avoid some type of operation that the government deemed to be objectionable to the public, such as emissions from a factory. Another instance of contract zoning is the restrictive agreement that in exchange for the land being given a commercially zoned classification, the business agrees not to build a large parking lot.
Although contract zoning may appeal to a particular landowner, it is not necessarily a possible arrangement. To have the best chance of entering into a private rezoning contract, it is advisable to work with a land use attorney.