• Floating zones are flexible zoning districts that aren’t mapped until a property owner applies for the designation and meets specific requirements.
• Cities use floating zones to allow innovative development while maintaining control over standards and approval.
• Floating zones require detailed plans, studies, and public review before approval can be granted.
• These zones work particularly well for mixed-use developments and large planned communities.
• Successful floating zone projects can increase property values, while failed projects may harm surrounding areas.

A floating zone is a zoning district that specifies restrictions for land zoning approval. Instead of being placed on a map, floating zones are written as ordinance modifications and are not initially attached to a location. A floating zone “floats” above the zoning map until it “lands” on a specific property through an application and approval process.

Floating zones offer a new way to handle land use rules that gives more options than traditional zoning while still maintaining order. For instance, a typical commercial zone might limit building height to 35 feet, while a floating zone could allow 60 feet if the developer includes certain community benefits. These benefits might include public spaces, affordable housing, or green building features.

The idea started in the 1950s when cities needed ways to allow new types of development without constantly changing their zoning maps. However, the concept may have existed far earlier.

Benefits of Floating Zones

For one, floating zones make the development process more straightforward. Developers don’t need to ask for as many exceptions to the rules, and everyone knows what to expect. This approach helps avoid claims of unfair zoning because the same standards apply to all similar projects.

These zones make room for different types of projects that combine various uses, like housing with shops or offices. They work well for planned communities and special districts where innovation is important.

In addition, floating zones keep community interests in mind through required public reviews and standards that control how development affects the area. They make sure new projects don’t harm existing neighborhoods.

Most floating zones have minimum size requirements to ensure projects can achieve their goals and provide sufficient space for the proposed development.

However, the exact size requirements can vary significantly depending on the municipality and the specific type of floating zone. Consult your local planning and zoning department for the exact requirements in your area. You can also use an AI platform to do your due diligence and review zoning rules, as we detailed in this video:

Our comprehensive ChatGPT Mastery course covers more advanced ways to leverage the power of artificial intelligence in real estate investing, including reviewing zoning rules and doing due diligence.

Getting Approval

The approval process includes several detailed steps. Developers typically need to bring the following items to the pre-application meeting:

• Initial site plans
• Traffic impact studies
• Environmental reports or assessments
• Market analysis
• Infrastructure capacity reports

Applications missing any of these elements may face delays. For instance, the municipality may return applications lacking critical information for correction. Meanwhile, incomplete legal documents, such as contracts lacking necessary attachments, can not only delay, but even halt progress.

Environmental Considerations

Modern floating zones increasingly include environmental standards. Common requirements include:

• Stormwater management: Projects must often capture and treat rainfall from common storm events. This might mean installing underground storage tanks, creating bioretention areas, or using permeable pavement.
• Energy efficiency: Many jurisdictions require floating zone developments to meet specific energy performance standards.
• Green space: While traditional zoning might require 10-15% open space, floating zones often require 25-30%, with specific standards for tree preservation and native plantings. For example, Kane County, IL’s landscaping plan requires developers to set aside a minimum of 25% of industrial sites for native species planting.

Floating zones open up new possibilities for development. They allow for projects that mix different uses together, like apartments above stores or offices next to restaurants. This flexibility helps create more interesting and useful developments.

Mixed-Use Development (MUDs)

Floating zones have become a popular tool for creating mixed-use developments (MUDs), which combine housing, retail, offices, and public spaces in one project. Traditional zoning often keeps these uses separate, making it difficult to build true mixed-use communities.

Note that a floating zone itself is not necessarily a mixed-use development. However, a floating zone can be used to designate an area where mixed-use development is allowed.

Property Values

Successful floating zone developments tend to boost nearby property values above normal market rates. Properties close to well-executed mixed-use projects, especially those combining retail, residential, and office space, often see significant value increases over time.

However, the impact can work both ways. When floating zone projects fail or remain partially complete, surrounding property values might grow more slowly or even decline. Even more broadly, it may also have adverse economic repercussions, affecting not only property values but also local businesses and municipal revenues due to lower property taxes.

The degree of impact, whether positive or negative, typically depends on the project’s size, quality of execution, and how well it fits with the surrounding neighborhood.

Large-Scale Development

These zones work especially well for big planned communities. Developers can build different housing types, add stores and offices, and include parks and other features that make a community complete. They can also build the project in phases over time.

Business developments also benefit from floating zones because they can place buildings where they make the most sense, share parking areas between different uses, and reuse existing buildings in new ways.

Infrastructure Considerations

Floating zones often require substantial infrastructure investments. A typical mixed-use development of 10 acres might need:

• Water system upgrades
• Road improvements
• Sewer capacity expansion
• Stormwater management

Successful developers often partner with local governments to share these costs through tax increment financing or other public-private partnerships.

For all its benefits, however, floating zones may face some significant pushback from different areas.

Legal Issues

Floating zones can face several types of legal challenges. The most common comes from neighboring property owners who claim the zone gives special treatment to one property (see floating zone vs. spot zoning section below).

Courts generally uphold floating zones when:

• The zone follows a clear set of standards that apply equally to all qualifying properties
• The development aligns with the city’s comprehensive plan
• The approval process includes proper public notice and hearings
• The zone serves a public purpose beyond just benefiting the developer

Technical Problems

Development in floating zones often reveals unexpected technical challenges. A common issue that plagues floating zone development is the lack of adequate infrastructure for their planned use.

Another is environmental issues. These can be anything from discovering soil contamination from previous uses to finding protected species or wetlands not shown on official maps.

Traffic Management

Traffic impact studies often fall short of predicting real-world conditions. When buildings are finished and in use, many developments find they need extra road improvements, new traffic signals, or different access points.

Even well-planned studies can miss how new retail stores, offices, or housing will change traffic patterns in the area. For example, the Wisconsin Department of Transportation’s Traffic Impact Analysis Guidelines acknowledge that traffic volumes and patterns can change over time, affecting the relevance of initial studies.

These surprises can add substantial costs and delays to projects, especially when local transportation departments require changes after construction has started.

Political Concerns

Political changes can affect project approval and execution. Local government leadership changes may delay or even completely shelve floating zone applications.

Timing Issues

Many floating zone applications face delays for several common reasons:

• Incomplete environmental studies
• Traffic impact concerns
• Public opposition
• Infrastructure capacity issues

Solutions often involve early community engagement and thorough pre-application planning.

These two zoning concepts are often confused, but they work in different ways:

Floating Zones

Cities in the U.S. plan and create floating zones as legal tools in advance and as part of their overall urban planning strategy. They have clear rules that apply to any property meeting the requirements. They function as pre-approved zoning options for developers if they follow all the rules.

Spot Zoning

Spot zoning happens when a city changes the zoning of a single property in a way that doesn’t match the surrounding area or the city’s plans. Courts often rule against spot zoning because, by nature, it gives special treatment to one property with limited benefit to the community as a whole.

Key Differences

1. Planning: Floating zones are part of a city’s planned development tools. Spot zoning typically happens outside of any planned framework.
2. Standards: Floating zones have clear standards that apply to everyone equally. Spot zoning modifies the rules for a single property without establishing consistent standards.
3. Legal status: Floating zones generally hold up in court when challenged because they’re part of overall city planning. Meanwhile, courts often overturn spot zoning because it can be unfair to neighboring properties.
4. Purpose: Floating zones serve broader community goals like mixed-use development or planned communities. Spot zoning usually benefits a single property owner without clear public benefit.

How long does the floating zone approval process take?

The duration of the floating zone approval process can vary based on several factors, including the project’s complexity, local regulations, and community response. Typically, this process involves multiple stages:

• Pre-application meetings: Engaging with planning staff to discuss the proposal and understand requirements.
• Application preparation: Developing detailed plans and necessary documentation.
• Technical review: Assessment by various departments for compliance with regulations.
• Public hearings: Opportunities for community input and discussion.
• Final decision: Approval or denial by the appropriate authority.

While some jurisdictions may complete this process within 4 to 8 months, others might take longer, especially for larger projects or those encountering public opposition. For instance, in Greenburgh, NY, the approval process for a floating zone is similar to that used for assisted living facilities, which can be extensive.

Is it possible to convert existing properties into floating zones?

Yes, existing properties can convert to floating zones if they meet the requirements, which are generally up to the jurisdiction. For example, the City of Albuquerque provides guidelines on voluntary zoning conversions, including criteria for properties with floating zone lines.

Generally, however, when applying for a zoning conversion, owners must show their plans follow the rules, submit detailed development plans, and get necessary approvals. They must prove the change fits the city’s overall plan and won’t harm nearby properties.

What happens if a floating zone development fails to materialize?

Most cities include time limits in floating zone approvals. If construction doesn’t begin within a set time (usually 12-24 months), the zoning returns to what it was before. Some cities allow extensions if market conditions or other factors beyond the developer’s control delay the project.

1. American Planning Association, “Property Topics and Concepts.” https://www.planning.org/divisions/planningandlaw/propertytopics.htm
2. Farrell Fritz, “It’s A Bird, It’s A Plane, It’s A Floating Zone.” https://www.lilanduseandzoning.com/2017/06/26/its-a-bird-its-a-plane-its-a-floating-zone/
3. Environmental Protection Agency, “Stormwater Management Practices at EPA Facilities.” https://www.epa.gov/greeningepa/stormwater-management-practices-epa-facilities
4. Sustainable Development Code, “Chapter 1.3, Sensitive Lands and Wildlife Habitat.” https://sustainablecitycode.org/brief/require-use-of-native-plants/
5. American Bar Association, “Land Use Update: Zoning for Mixed-Use Development.” https://www.americanbar.org/groups/real_property_trust_estate/resources/probate-property/2024-january-february/zoning-mixed-use-development/
6. JB Holdings, “Mixed-Use Developments: Benefits and Examples of Mixed-Use Property Developments.” https://jb-propertydev.co.za/mixed-use-developments/
7. Wall Street Journal, “Rebalancing in the U.S. Office Sector Shows Uneven Results.” https://deloitte.wsj.com/cfo/rebalancing-in-the-u-s-office-sector-shows-uneven-results-8f6e3b82
8. Wisconsin Department of Transportation, “Traffic Impact Analysis Guidelines 2024.” https://wisconsindot.gov/dtsdManuals/traffic-ops/manuals-and-standards/tiaguide.pdf
9. U.S. Green Building Council, “Neighborhood Development Floating Zone.” https://www.usgbc.org/resources/neighborhood-development-floating-zone
10. PlannersWeb, “Understanding Spot Zoning.” https://plannersweb.com/2013/11/understanding-spot-zoning-2/
11. Town of Greenburgh, NY, “Continuum of Care Facility Floating Zone FAQ.” https://www.greenburghny.com/DocumentCenter/View/6548/Continuum-of-Care-Facility-Floating-Zone-FAQ
12. City of Albuquerque, “Integrated Development Ordinance Frequently Asked Questions (FAQs).” https://abq-zone.com/integrated-development-ordinance-frequently-asked-questions