In the first part of this series, we discussed the role of zoning and the need for flexibility in commercial real estate. Now, let's delve into real-world examples and strategies to overcome challenges in implementing flexible zoning policies.
Several municipalities in Illinois have embraced flexible zoning, or at least opened the door to it.
Naperville updates zoning, opening the door to award-winning development:
Naperville updated its Land Use Master Plan in 2021, and it was approved by the city council in March 2022. Previously the plan was called the Comprehensive Master Plan and was created in 1960. The new plan was designed to accommodate new residential uses and mixed-use developments.
Under the new Land Use Master Plan, we effectively worked with the city to secure a zoning variance at CityGate Centre, paving the way for the Domain CityGate apartments which opened in 2023.
This 285-unit luxury apartment complex, which won NAIOP Chicago’s 2023 Multifamily Development of the Year, includes studio, one-, and two-bedroom units with amenities such as a fitness center, resident lounge and even dog grooming stations.
The variance for Domain CityGate allowed, for the first time, residential development north of Interstate 88 in Naperville.
CityGate Centre continues to be a vibrant mixed-use development that combines luxury accommodations, dining, entertainment and office spaces. The lease percentage at Domain CityGate has been mid-90% or better—and has even surpassed 99% seasonally—since it opened. Plus, the development's retail building is more than 88% leased and its multi-tenant office building more than 84% leased.
DuPage County's Bloomingdale sees revitalization through zoning flexibility:
In addition to Naperville, other DuPage County municipalities have revisited their zoning ordinances to support various types of development, including the adaptive reuse of outdated or depressed sites to address current community needs.
One notable example is the redevelopment of the former Stratford Square Mall site in Bloomingdale, IL. The village rezoned the site to create a mixed-used development called The Grove at Bloomington Commons. The plan includes entertainment venues, new retail options, community spaces, parks, a playground, restaurants, apartments and more.
Chicago's DDP is on a mission to upzone & revitalize:
In January this year, Chicago’s Department of Planning and Development (DDP) posted a draft of a document, Broadway Land Use Planning, on the city’s website. The document outlines a vision to “upzone” Broadway between Montrose and Devon avenues to increase allowable density of development in the North Side traditionally commercial corridor. The effort is designed to address affordable housing shortages with roughly 18,000 units in the city’s proposal.
Also in January, the city’s DDP and department of transportation (CDOT) released A Vision for LaSalle Street, a community-led framework for reimagining part of the depressed downtown business district for mixed-use development including residential.
Overcoming Challenges
Municipalities must navigate complex regulatory frameworks, address community concerns, and ensure that new developments align with broader urban planning goals, they first must be willing to change.
While the benefits of flexible zoning are clear, just one or two failing or flailing developments can make municipal leaders less flexible in considering zoning changes, and resist offering the incentives that make an area attractive to developers and investors.
It’s often on the developer to make their case not only to the municipality, but to its constituents and other stakeholders impacted by their proposed development.
Community Engagement:
Engaging with community members early can help build support for a zoning change and address concerns, which will drive agreement from elected and appointed officials.
Streamlined Approval Processes:
The delays that can cause a development to derail are sometimes the results of complex processes, i.e., the proverbial red tape. Simplifying the approval process for zoning changes can reduce delays, making it easier for developers to bring new projects to market and bring benefits to the community. Discourse can send a project off course, leading to sabotage by process.
Incentives for Developers:
Offering incentives such as tax breaks or density bonuses can encourage developers to invest in areas targeted for rezoning because they are otherwise depressed. That’s a win for a municipality that can benefit with local jobs, tax revenue and even safety concerns.
Conclusion
Flexibility in zoning is a powerful tool for driving both municipal revitalization and commercial real estate industry recovery. By encouraging municipalities to re-zone areas for various kinds of development than originally intended, we can create more adaptable, resilient communities.
As cities continue to evolve, embracing flexible zoning policies will be essential for unlocking new opportunities and ensuring sustainable growth.
If you missed Part 1 of this series, be sure to check it out for a look at the role of zoning and the need for flexibility in commercial real estate.
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