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What Are Entitlements? Understanding The Development Process

What Are Entitlements? The Importance Of Denver Real Estate Entitlements In The Development Process 

Infill development is a novel approach to new construction projects that allows for the development of dense residential and urban systems, allowing municipalities to leverage and use land resources in the most efficient manner possible. This modern form of neighborhood revitalization helps create more city investments, higher property values, and a better economy. 

To embark on an infill development project in any U.S. city, including Denver, a real estate entitlement is required. This is a contract between the landowner/developer and the government. As a critical document necessary for development on entitled land – whether it be for greenfield, brownfield, or infill development and construction projects – obtaining an entitlement is the first significant step that your firm must complete. Getting entitlements is a complex and often lengthy process, so much so that utilizing the expertise of well-informed, experienced professional consultants is often the best plan of action so that your projects aren’t delayed or stopped altogether. 

What Is A Real Estate Entitlement?

While a building permit allows a developer to build structures on parcels of land once specific parameters and standards are met, a real estate entitlement is a critical document that “entitles” a developer/owner to build on a parcel of land based on its intended use. Entitlements reflect government zoning regulations for a specific area.  For this reason, entitlements often limit the types of structures that can be built on a parcel of land.

Why Are Entitlements Required?

Land-use entitlements are required to ensure that buildings and community structures within a zone are well-regulated and align with the city’s plans and zoning regulations. Two major types of real estate regulations come into play with real estate entitlements:

  1. Zoning Laws: U.S. cities are mapped out and planned via a set of codes called zoning regulations, which control which types of structures may be built in certain areas,  including residential zones, commercial zones, and industrial zones.
  2. Building Codes: Construction regulations, which include safety codes and limits, are set to provide developers with a set of strict rules that will permit them to build structures in a way that will benefit the community and local municipality.

Zoning laws and building codes explain why entitlements are necessary and required: they ensure that structures are built with an intended use that aligns with the government’s vision for the community and that the new development will benefit the city, even if the original zoning did not call for such a building. This is why land-use entitlements are the foundation of any development project.

Types Of Entitlements That May Apply To Your Real Estate Development Project

While there are different real estate entitlements, all of which “entitle” developers to carry out various projects, land-use entitlements are the core entitlement that gives a construction firm the ability to carry out a construction project on a parcel of land. Other entitlements detail density, function, limits, and setback requirements that the city prescribes for development. 

Zoning Entitlements

Zoning entitlements are related to the municipality’s zoning regulations and allow a developer to construct a building according to intended zoning regulations, which stipulate the types of structures that can be built within a zone (that is, on a parcel of land within a zone). 

Rezoning Request

Suppose the zoning regulations do not stipulate that your construction project or model (the final structure) is fit for that particular area. In that case, a rezoning request is needed to ensure that your structure can fit within the zoning code regulations.

Zoning Variances

Zoning variances are fluid, dynamic aspects of a zoning code that can allow for a series of permitted changes for the sake of giving your project the ability to fit within the existing zoning regulations. They include setback requirements, parking spaces, building heights, building densities, building types, etc.

Utility Entitlements

When connecting newly built buildings with the existing – or non-existing – infrastructure (I.e., utilities), the project may necessitate a utility entitlement in the form of connection permits, sewage disposal permits, and other utility system permits.

Landscaping Entitlements

When submitting the landscape site plan to a Planning Development board for the obtaining of the entitlement, it may be required to obtain a landscape entitlement or grading permit to carry out a series of landscape tasks that will allow the project to move forward, I.e., tree removal, tree relocation, etc.

Road Approval Entitlements 

Depending on the project’s existing infrastructure – whether it be a greenfield or infill development project – there may be no existing roads connecting to the newly-built property. In this case, a road approval entitlement will be needed for the construction of such structures. 

Incorporation And Subdivision Entitlements

When developing land and requiring parcel incorporation – or creation of land/parcel subdivisions – a special entitlement may be required that allows developers and construction companies to carry out such tasks for the sake of completing their pertinent projects.

Use Permits

Known as special or specific use permits, such permits are any classification of permits that enable developers to carry out a task that will allow the resulting structure to fit within a previously non-conforming parcel so that developmental restrictions are no longer an issue. Normal use permits allow developers to carry out a basic activity to complete the construction project and include demolition permits and building permits.

How Can You Obtain The Necessary Entitlements?

To obtain a real estate entitlement, one must complete the required analyses and receive approval of due diligence documents. Third-party consultants most often carry out these tests and submissions. Such tests, reviews, and analyses are needed to support your construction project when facing Planning Department review. Such reports can be broken down into three main categories, reflecting  how a new build may impact the community:

  • Environmental
  • Economic (Municipal)
  • Structural

These studies and reports must be provided for your project to be approved by the relevant legislative bodies.

Architectural Review

Whether greenfield, brownfield, or infill development, your building project will also need to undergo architectural and design review. This process reviews and approves your intended project approach: the blueprints, timeline, and detailed perspective solutions associated with the project. 

Site Preparation And Building Plans

Site preparation tasks include a complex set of steps that delve deeper into the building plans. This includes:

  • Rough Staking: Boundary mapping and measuring to allow developers to obtain a visual representation of the building perimeter, usually via survey.
  • Clearing: Lot clearing involves removing obstacles to development, including vegetation, trees, roots, etc.
  • Excavation: When designing and constructing a building with a basement, excavating the ground underneath is a necessary step.
  • Rough Grading: Ensuring that your building perimeter’s leveling and slope are optimal for construction is a critical step that helps make sure that water and rain are appropriately drained. 

Environmental Reports

Construction projects affect the environment in myriad ways, including creating particulate dust, releasing metals into the environment, and creating waste. These can contribute to climate change, landfill waste accumulation, air pollution, and industrial pollutants being released into water and soil. When designing a construction project, it is best to ensure that the environmental footprint will be light and temporary while ensuring that energy-efficient steps and products are used. To this end, environmental reports carried out by third parties will analyze the impact on the environment and be used to assess whether your project is feasible.

Tree And Surface Vegetation Report

There may be trees and other vegetation present that can obstruct your construction plans; however, you can’t just go in and clear the site as you see fit. First of all, you need to submit a tree and surface vegetation report to the forestry department as part of the application process. This report must detail what trees and vegetation occupy the land. The report will be reviewed to determine what can and cannot be cleared (some rare species of trees or vegetation may be protected by law and cannot be removed). Only after you’ve received approval to clear trees and vegetation can you do so. After the site has been cleared, you will also have to submit a report of completion.

Utility Reports And Tests

When determining how well utilities, sewage, and other infrastructure systems will integrate with your building project, a series of tests are required, including a good test and a percolation test. While the former includes a test that indicates the amount of water that can be pumped from a water facility, the latter consists of a test that evaluates how well soil absorbs liquid. These tests are necessary to obtain a permit to install a new septic system or drainage system.

Geotechnical And Soil Analysis

There are a series of geotechnical and soil tests that should be conducted for a project of any size, including:

  • Moisture Content Test
  • Specific Gravity Test
  • Dry Density Test
  • Atterberg Limits Test
  • Compaction Test

These tests determine the attributes – typically moisture, texture dryness, absorption ability, etc. – of the soil, which affects groundwater runoff, septic system installation, and more.

Boundary Survey

A boundary survey is an evaluation test that defines a property’s limits for construction and is necessary to establish the building’s perimeter. Essentially, a boundary survey formally defines the corners and dimensions of a plot of land.

Topographic Survey

A topographic survey is a 2D representative survey showing the ground contours and utilities of public assets. Such a survey is used to create a representation of the plot of land for construction. 

Understanding The Entitlements Is Crucial To The Development Process

The entitlement process requires many complex best-practices, analyses, documents, and protocols that can make or break your construction project. It is of the utmost importance that your company employs key consultants and specialists who understand the many setbacks that may occur when undergoing the six-month to two-year entitlement process. Don’t be surprised by requirements such as Tax Increment Financing, debt financing, Sales Tax sharing agreements, rezoning, historic preservation, or subdivision approvals: employing a qualified entitlement consultant can prevent your team from being overwhelmed by the many aspects of the entitlement process. Though complex, obtaining permits and all pertinent real estate entitlements are crucial to completing your new construction projects.

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