This document provides an overview on land use, zoning, entitlement, and planning in real estate development

1. An overview
on real estate
planning and
development
LAND USE, ZONING &
ENTITLEMENT

2. LIST OF
ITEMS
COVERED
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DEVELOPMENT PROCESS
PROJECT INFORMATION
KEY DECISION DRIVERS
DECISION-MAKING BODIES
PUBLIC PROCESS
GOVERNMENT AGENCIES
REGIONAL & LOCAL GOVERNANCE
ENTITLEMENT
GENERAL, COMMUNITY & SPECIFIC PLAN
ZONING
SUBDIVISION
SITE SPECIFIC PLANNING
PERMITS & APPROVALS
DENSITY BONUS
CEQA

3. DEVELOPMENT PROCESS
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Project Concept
Site Selection
Research
Properties
Land Purchase
Offer
Site Due
Diligence
Close Land
Preliminary
ProForma
Project Defn.
Architect
Conceptual
Design & Est.
Schematic
Design / Initial
GMP
Value Eng. &
Agency Review
Design Dev. /
Final GMP
Constn. Docs
Bid &
Subcontract
Building Constn.
Open for Use
Agency
EIR
Planning &
Zoning Approval
Eng. Consultants
& Studies Market Research
Financing
Options
Bond Equity Debt
IdeaPlanning
Execution

4. PROJECT INFORMATION
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¡ Current Use
¡ Planning and Land Use
¡ Legal description of property,
including boundaries, height,
and density
¡ Applicable zoning codes and
specific plans, and other
applicable laws affecting
development
¡ If located in “coastal zone”,
affordable housing requirement
under 1982 California state law
called Mello Act
¡ Ownership
¡ Previous and new owner
¡ Encumbrances
¡ Liens and/or covenants
¡ Property Taxes
¡ Building and Safety
¡ Inspections, complaints,
permits, code enforcement
¡ Redevelopment
¡ Redevelopment plans and use
of eminent domain

5. ¡ Land Use
future of neighborhood, kind of new
construction permitted (eg., multifamily,
commercial, industrial, etc.)
¡ Housing
type of housing, affordability,
ownership vs. rental, proximity to
transportation, parks, community
services
¡ Redevelopment
responsiveness to community needs,
use of eminent domain, relocation,
replacement housing, affordability
¡ Transportation
connectivity with neighborhood and
beyond, street improvements,
freeways, bus, rail, bicycle, pedestrian
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KEY DECISION DRIVERS
¡ Community
neighborhood revitalization
¡ Parks / Recreation
safety, cleanliness
¡ Environment
quality of neighborhood, permits,
toxic cleanup, air and water
quality
¡ Jobs
local job creation, wages, benefits
¡ Financial Impact
public subsidies, tax revenue

6. ¡ Almost all development projects in Los Angeles are required
to obtain approval from either city or county
¡ Development permits, zoning code compliance, city planning
compliance, and environmental review each creates a public
process
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DECISION-MAKING BODIES
¡ Advisory Bodies
§ Neighborhood Council (NC)
§ Project Area Committee
(PAC), or Community
Advisory Committee (CAC)
¡ Decision-Making Bodies
§ Planning Department (PD)
§ Planning Commission (PC)
§ City Council
§ County Board of Supervisors
§ Zoning Board
§ Redevelopment Agency (RA)

7. Ploutus Advisors, LLC 6
PUBLIC PROCESS
Discuss project with
Neighborhood Council
Approach Building and
Safety Department to
determine approvals
needed
Submit project
application to City
Planning Department
Planning Department,
Hearing Officer or
Zoning Administrator, to
hold hearing and make
recommendations;
typically placing
conditions on project
Regional or City
Planning Commission to
make decision on any
administrative/
adjudicatory matters or
appeals from Hearing
Officer
City Council to make
determination on
legislative matters and
appeals from Planning
Commission

8. ¡ Local Agencies – City Council, Zoning / Planning Departments
§ All new construction must receive approval from local city or county
Planning Department
§ City Council approval may also be required
§ Planning Department establishes zoning laws and long-term plans to
guide future developments, and is also responsible for completing an
environmental review of any major new development
§ All major city planning decisions or recommendations are made by
local city Planning Commission who are appointed by City Council,
Board of Supervisors or Mayor (in Los Angeles)
§ Legislative land use decisions (e.g., General Plan Amendments,
creation of new Specific Plan) require City Council approval after
Planning Commission recommendation
§ Planning Commission decisions can be appealed to City Council or
Board of Supervisors
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GOVERNMENT AGENCIES

9. ¡ Regional and County Agencies
§ County planning agencies are responsible for decisions and plans
affecting unincorporated areas of the county
§ Regional agencies are becoming more influential in local decisions,
e.g., the Southern California Association of Governments (SCAG) is
responsible for creating a Regional Transportation Plan (RTP) to
allocate federal transportation funding and establish a vision for
regional growth
§ County transportation authorities, such as the Metropolitan
Transportation Authority (MTA) in Los Angeles County, have
significant influence over development of local transit systems
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GOVERNMENT AGENCIES

10. ¡ Regional Planning
§ In California there are 36 regional governance structures called
Council of Governments (COGs) which address issues that
transcend local boundaries, such as transportation, growth
management and environmental protection
§ Southern California Association of Governments (SCAG) represents
six counties and 191 cities
¡ Local Planning (Comprehensive)
§ Actual land use authority, for the most part, resides with local
governments
§ Each community’s legislative body, upon recommendation and
guidance from a Planning Commission, implements the General
Plan through zoning ordinances
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REGIONAL & LOCAL GOVERNANCE

11. ¡ Entitlement is approval from a regulatory body to use or
develop land
¡ A project typically requires several approvals pertaining to land
use, architecture review, general and specific plan, subdivision,
development agreement, etc.
¡ Entitlement process includes:
§ General Plan
§ Zoning
§ Subdivision Approval
§ Site Specific Permits
§ Conditional Use (CUP)
§ Variance
§ Design Review
§ California Environmental Quality Act (CEQA) / Environmental Impact
Report (EIR)
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ENTITLEMENT

12. ¡ Provides broad generalized vision for future development
¡ Describes goals and policies that serve as the basis for other
land use ordinances and local land use decisions
¡ Contains at least seven (7) mandatory elements: (i) land use;
(ii) circulation; (iii) housing – with the passage of SB 375, the
housing element must, in most cases, now be updated every
eight (8) years; (iv) conservation; (v) open-space; (vi) noise;
and, (vii) safety
¡ In Los Angeles, adopting or amending a city’s General Plan
requires public participation
§ First, Planning Commission must hold at least one (1) public hearing
before making a recommendation for approval
§ Second, City Council’s Planning and Land Use Management committee
(PLUM) must hold a public hearing
§ Finally, full City Council must hold a public hearing before taking action
on the plan or amendment
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GENERAL PLAN

13. Community Plan
¡ Land use element of General Plan actually consists of 35
separate Community Plans in Los Angeles
¡ Each Community Plan sets general land use principles and
policies for a specific area of the city
Specific Plan
¡ Detailed plan for development of a specific area of the city
¡ Contains specific limitations on development, such as
maximum height or set backs
¡ Details approvals and appeals process for developments
within the Specific Plan area
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COMMUNITY PLAN & SPECIFIC PLAN

14. ¡ Zoning is a police power exercised by local municipalities through
adoption of ordinances to control and direct use and development of
private real property
¡ Generally divides allowable uses of land (e.g., residential,
commercial, etc.) into different zones
¡ Imposes a set of restrictions on land use and development within a
particular area
¡ Creates “zones” for specific land uses such a residential, industrial,
or commercial
¡ Each zone is divided into subcategories such as residential “single
family” or “light” industrial
¡ Each zone has specific legal limitations on use, height, yard size, lot
size, and parking
¡ Overlay zones protect uses and regulate development to protect
specific features in an area (e.g., historic preservation overlay zones,
flood hazard zones, ocean-submerged land zones, and coastal
zones)
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ZONING

15. ¡ Subdivision is division of land into two or more parcels or legal
entities – process is referred to as Platting
¡ All divisions of land, including creation of air parcels for
condominiums, are regulated by State Subdivision Map Act (SMA)
¡ In Los Angeles, subdivision approval is a two step process:
§ First, Tentative Map, which if approved, then Final Map
§ Final Map must be recorded within two (2) years from date of approval of
Tentative Map; however, extension of up to six (6) additional years (one year at a
time) may be requested
¡ Subdivision may be achieved by one of the following methods:
§ Parcel Map – required when division of property would create four (4) or fewer
parcels or four (4) or fewer condominium units (i.e., Minor Land Division)
§ Tract Map – required when division of property would create five (5) or more
parcels or condominium units
§ Vesting Map – grants vested rights to proceed with project in accordance with
ordinances, polices and standards in effect at time application for approval of
Vesting Tentative Map
§ Hearing Officer has authority to make decisions on Parcel and Tract maps, and
Vesting Maps; decisions of Hearing Officer are appealable to Board of Zoning
Appeals
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SUBDIVISION

16. ¡ Most decisions involve the Planning Department or Planning
Commission when evaluating a project proposal
¡ In case of rezoning, a site-specific application can be
considered a legislative approval that requires City Council
review
¡ Rezoning / Zone Change – If proposed development does not
comply with existing zoning code, then rezoning (or zone
change) is required for approval
§ In California, rezoning is a legislative act that requires City Council
approval
§ In Los Angeles, zone change requires public participation
§ First, Planning Commission must hold at least one (1) public hearing before
making a recommendation for approval
§ Second, City Council’s Planning and Land Use Management committee
(PLUM) must hold a public hearing
§ Finally, full City Council must hold a public hearing before taking action on
the zone change
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SITE SPECIFIC PLANNING

17. ¡ Variance – Used to avoid restrictions imposed by zoning
code
§ Essentially a limited waiver of zoning requirements
§ Granted only in special cases where a strict application of zoning
code would deprive property owner of uses enjoyed by other land in
same zone
§ Variance cannot allow a use prohibited by zoning ordinance, but
can relax standards for certain criteria e.g., lot size, set backs, or
floor-area-ratio
§ Zoning Administrator must hold a public hearing before issuing a
variance
§ Section 12.27 D of Los Angeles Municipal Code sets standards for
granting a variance
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SITE SPECIFIC PLANNING

18. ¡ Conditional Use Permit (CUP) – Certain uses of land may
only be allowed upon approval of a CUP
§ Uses that often require a CUP include schools, hospitals, factories that
produce hazardous materials, and group homes
§ CUP may impose special conditions that ensure the use will not harm
surrounding properties
§ CUP does not rezone land; the use in question must comply with
zoning requirements and obtain a CUP
§ Granting of CUP requires a public hearing
§ In Los Angeles, granting of CUP requires a public hearing
§ Either Zoning Administrator, Area Planning Commission, or City Planning
Commission decides whether to issue a CUP
§ Initial decision-maker has 75 days from receipt of application to make a
decision
§ Zoning Administrator decisions can be appealed to Area Planning
Commission, and Area Planning Commission or City Planning Commission
decisions can be appealed to City Council
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SITE SPECIFIC PLANNING

19. ¡ Site Plan Review – In Los Angeles, Site Plan Review is
required before issuing building permits for development
projects that will result in:
§ An increase in 50,000 square feet of non-residential floor space;
§ An increase of 50 or more dwelling units;
§ Changes to fast food restaurants; or
§ New residential buildings in the Greater Downtown Housing
Incentive Area
¡ Generally, the Planning Director will determine whether a
proposed project is consistent with the General Plan and
any other applicable plans (e.g., Specific Plans,
Redevelopment Plans)
¡ Public hearing is not required for Site Plan Review
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SITE SPECIFIC PLANNING

20. ¡ A plan or project’s approval process is mostly determined by
whether the decision is (i) Legislative, (ii) Quasi-Judicial, or
(iii) Ministerial
¡ Legislative – City Council action required to create or
amend a rule or policy applicable to the development project
§ Generally changes law or standards as they are applied to all
residents, e.g., changing a plan affects multiple property owners
and residents that live within plan’s coverage such as General Plan
or Specific Plan Amendment, or Zoning Change where City may
require developer to pay impact fees or contribute to community
improvements
§ Requires extensive public hearing
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PERMITS & APPROVALS

21. ¡ Quasi-Judicial – Some developments require quasi-judicial
(also called “Adjudicatory”) approvals meaning Planning
Commission (or other agency) must determine if
development complies with an existing rule or policy
¡ Ministerial – Requires little or no judgment, or exercise of
discretion, by decision-making body
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PERMITS & APPROVALS

22. ¡ Following approvals could be either Adjudicatory or Ministerial (in
most cases these will be Quasi-Judicial)
§ Building Permit – Allows developer to construct on lot; city will issue building
permit only after compliance with applicable zoning and planning regulations
and design review
§ Conditional Use Permit (CUP) – Zoning ordinance lists permitted uses within
each zone, as well as a second list of uses that may be allowed if developer
obtains a CUP
§ “Conditional” uses are kind city only wants in limited numbers or special
circumstances, like tall buildings, and, in Los Angeles, are listed in Sections
12.24 U,V,W and X of Municipal Code
§ Tentative Subdivision Map – When property owner subdivides a property into
five (5) or more separate parcels (e.g., when creating condominiums),
developer must generally prepare a Detailed Tentative Tract Map that must be
approved by Planning Commission after a public hearing
§ Variance – Allows a developer to construct in ways otherwise prohibited by
zoning ordinance because of special physical characteristics of a lot; Zoning
Administrator must hold a public hearing before issuing a variance
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PERMITS & APPROVALS

23. ¡ Local land use controls (e.g., Zoning and Specific Plans) limit size of
buildings that can be built, and size of residential units inside thus
limiting “density,” i.e., number of residential units a developer can
build on a site
¡ In order to allow developers to build more residential units, state law
and city ordinances give developers a way around these regulations
in exchange for including affordable units or senior housing, or for
building near mass transit; extra units are called a “Density Bonus”
§ Housing developments with at least 10% percent of units for households
earning 80% of AMI, or 5% of units for households earning 50% of AMI, allows
for an increase in size of total development of 20% above legal limit
§ Developers may also request up to three (3) additional concessions from local
zoning regulations e.g., developer may elect to raise maximum height of a
building to allow more units to be built on top of building
§ Condition of granting a Density Bonus is that affordable housing developed as
a result must retain its affordability for a minimum of 30 years
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DENSITY BONUS

24. ¡ California Environmental Quality Act (CEQA) is a state law that
requires government agencies to consider the environmental effects
of certain development projects before approving them
¡ Allows public participation and influence on future development
¡ Six (6) steps that a public agency must follow in order to comply with
CEQA:
§ Determine if proposed project is a “Discretionary Project”
§ Determine if project is Exempt or Non-Exempt from CEQA compliance
§ If project is Non-Exempt from CEQA, conduct an initial study to determine if
project may have significant environmental impact
§ If project has significant environmental impact, prepare an Environmental
Impact Report (EIR), else, prepare Negative Declaration (ND) or Mitigated
Negative Declaration (MND)
§ Certify, or approve as complete, EIR, ND, or MND
§ Approve or disapprove project – within five days of approving the project,
agency must file Notice of Determination, which declares that agency has
approved project application
¡ Note: After project has been approved, public may file lawsuit
challenging public agency’s decision in approving project
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CEQA

25. IN CONCLUSION - THE ROADMAP
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Plan
Gather
Relevant
Research
Involve All
Parties
Having A
Stake
Analyze
Make A
Qualified
Decision

26. CONTACT US
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Disclaimer: The information contained herein may be subject to errors, omissions, changes and, other factors that may adversely impact any decision made by a recipient/user, if
relied upon, without appropriate verification by a recipient/user. Ploutus Advisors, LLC, its partners and/or employees DO NOT provide any guarantees, express or implied, and/or
make any representations as to the accuracy of information contained herein. All information contained herein is only for general informational purposes, and should be independently
verified by a recipient/user. The recipient/user is hereby advised NOT to solely rely on information contained herein, and to conduct its own due diligence and consult with its advisors
prior to making any decision.
Source: Legal Aid Foundation of Los Angeles, Department of City Planning – Los Angeles, Planning & Zoning – City of Los Angeles
Real Estate Consulting & Advisory
Mr. Adnan Tapia
Email: atapia@ploutusadvisors.com
Tel: +1.424.274.3561
Ploutus Advisors, LLC
1875 Century Park East, Suite 700
Century City
CA 90067
Real Estate Investment, Acquisitions &
Development Analysis, Due Diligence, Underwriting
& Financial Modeling, Business Development &
Transaction Origination, Structuring & Negotiation,
Joint Ventures, Financing
Adnan is a Principal at Ploutus Advisors, LLC; a boutique real estate
investment and advisory firm based in Los Angeles, California.
Over a period of 18 years, Adnan has worked on 16+ million square
feet or US$2.5 billion worth of US and India focused real estate
transactions across several product types (office, industrial, retail,
residential, hospitality, mixed-use, land) and life cycles in areas such
as real estate private equity, financial consulting, acquisitions and
development.
§ MBA in Banking and Finance, Case Western Reserve University,
Ohio (nominated to the Honor Society of Beta Gamma Sigma)
§ Master in Engineering, Cornell University, New York
§ Bachelor in Civil Engineering, University of Pune, India
§ California Real Estate Broker’s License Holder
§ Member ULI, NAIOP, Cornell Real Estate Council (CREC)