How Zoning Laws Impact Property Use & Value In South Africa

Zoning laws are a cornerstone of urban planning and land use regulation, significantly influencing the development, character and growth of cities and towns. Although these laws dictate how land within specific areas can be used, it is not just a set of abstract regulatory guidelines, but a dynamic factor which directly influences property values.

South Africa’s land use and zoning laws are governed by various provincial and local laws. Through zoning, land is divided into designated zones or categories, each with its own set of regulations and permitted uses. This system helps ensure that land is utilized in a manner that aligns with the intended purpose and promotes orderly and sustainable development.

Understanding zoning laws is crucial for property owners, prospective buyers, and real estate professionals, especially regarding property development and investment.

1. Purpose of Zoning Laws

Zoning laws aim to segregate land uses into distinct categories to promote orderly growth and prevent conflicts between incompatible uses. Common zoning categories include residential, commercial, industrial, agricultural, and mixed-use.

Each category comes with specific regulations dictating the types of buildings that can be constructed, their height, density, and the activities permitted within them - which inherently influences the desirability and, consequently, the value of a property. The zoning laws are designed to ensure that land is used in a sustainable and equitable manner, considering the needs of all stakeholders, including residents, businesses, and the environment.

The primary goals of zoning laws are to:

• Ensure public safety

• Preserve the character of communities

• Protect natural resources

• Enhance the overall quality of life for residents

2. Impact on Property Use

Designated Use and Restrictions: Zoning laws restrict property use to specific purposes. For example, a property zoned for residential use cannot be used for commercial activities without obtaining a variance or rezoning. This ensures residential neighbourhoods remain quiet and safe, free from business-related disruptions.

Development Guidelines: Zoning regulations include guidelines on building height, lot coverage, and setbacks, influencing the physical characteristics of development. These rules help maintain a uniform appearance and prevent overcrowding, preserving the aesthetic appeal and functionality of neighbourhoods.

Special Zoning Districts: Some areas are designated as special zoning districts with additional rules. Historic districts, for example, have strict guidelines to preserve the architectural integrity of buildings, in line with heritage legislation.

3. Impact on Property Value

3.1 Desirability and Marketability: Properties in areas with strict zoning regulations are often more desirable and valuable. Residential properties in quiet, well-maintained suburbs tend to have higher market values. Conversely, properties near industrial zones or areas with lax zoning regulations may have lower values due to noise, pollution, or unsightly development. Zoning shapes neighbourhood characteristics and amenities via the availability of services and facilities, which are key determinants of desirability and value. From the quality of schools to the convenience of shopping centres and parks, zoning plays a pivotal role in moulding the amenities that influence where people want to live and work.

3.2 Investment Potential: Zoning laws can influence a property’s investment potential. Commercial properties in thriving business districts benefit from high foot traffic and visibility, leading to increased rental and resale values. Mixed-use zoning, allowing a combination of residential and commercial uses, can enhance property value by providing convenience and boosting local economies. Residential zoning that allows for higher density housing can increase the value of a property because more units can be built on the land, leading to higher potential rental income or sales revenue.

3.3 Flexibility and Variances: While zoning laws set strict rules, there is a process to apply for variances or rezoning. Although lengthy and complex, successfully rezoning a property before putting it on the market can significantly increase its value.

Landowners, or anyone with the consent of the landowner, can make application to the local Municipality for a change of use of the property. Various kinds of applications exist in different municipalities, a few examples are:

• Departure or Consent Use of a residential property for the purposes of conducting a guesthouse on the property.

• Consent Use of Agricultural property for the purposes of a wine shop or farm stall on the property.

3.4 Supply and Demand Dynamics: Zoning laws affect the supply of developable land. Restrictive zoning can limit the availability of land for certain uses, driving up prices. For example, in cities with stringent residential zoning and a resultant limited supply of certain types of property and land for housing, can lead to higher property prices and rents.

4. Zoning by Category

Zoning laws divide cities and towns into different areas or “zones,” with each zone having specific rules about what type of buildings and activities are allowed. The primary goal of zoning is to separate incompatible land uses, protect property values, and to plan for future growth and development in an orderly fashion.

For corporate and private investors, the main zoning categories include:

4.1 Residential:

Residential zones are further divided based on the density of housing units, ranging from single-family homes to high-density apartment complexes.

Residential 1: Allows one dwelling per stand.

Residential 2: Permits 10 to 20 dwellings per hectare, suitable for cluster housing or townhouses.

Residential 3: Allows 21 to 40 dwellings per hectare, ideal for estates and larger complexes.

Residential 4: Permits 41 to 120 dwellings per hectare, typically for apartment blocks.

4.2 Business/Commercial:

Business/Commercial zoning covers areas intended for business activities like shops, offices, and restaurants. Business zoning laws may also specify the maximum height and setbacks for buildings, as well as the types of businesses that are allowed in a particular area.

Business 1: Applies to general business, retail centres and malls with few restrictions, allowing almost any type of shop.

Business 2: Zoning for retail with certain trade restrictions.

Business 3: More restricted zoning, not permitting a wide variety of businesses.

Business 4: Zoning for office developments, including office parks and potentially a residential component.

4.3 Industrial:

Industrial zoning is for manufacturing, warehousing, and other similar uses.

Industrial 1: Zoning for factories, warehouses, and storage hubs.

Industrial 2: Strict zoning for industries with noxious odours and emissions, like abattoirs and tanneries.

Industrial 3: Zoning for specific applications, such as specialist workshops or mini-factories.

4.4 Agricultural:

Agricultural zones are meant to protect farmlands and control the development of rural areas. This category includes land use for farming, ranching, and other types of agricultural activities. Zoning laws may specify the types of crops and livestock that are allowed in a particular area, as well as the maximum height and setbacks for buildings.

Agricultural land can be classified into different categories, such as undetermined, agricultural holdings, and agricultural farms. Undetermined land refers to unproclaimed areas that have been identified for future agricultural use due to their potential for farming.

5 Conclusion

Zoning laws play a critical role in shaping the use and value of properties. By understanding these laws, property owners and investors can make informed decisions, optimise their investments, and contribute to the orderly development of their communities.