Zoning, Entitlements, Permits: What Construction Managers Deal with So You Don’t Have To

Whether planning to build a home or business structure or planning an addition or renovation to an existing building, you’ll likely find yourself involved in the entitlement, zoning and permitting processes before any work can begin. Depending on the project, location and design, this process can take months or even years to ensure it adheres to all local codes and regulations. In many cases, public hearings will be necessary, adding a layer of complexity to the approval process.

Applying for and obtaining the various approvals and permits can be extremely time-consuming, especially for the uninitiated. Property owners and investors will benefit from hiring an experienced construction project manager to navigate the various authorization and permitting challenges, helping ensure project approval in the most timely. Following is a high-level look at entitlements, zoning and permits in the residential and commercial construction process and the role of a construction project manager.  

Pre-construction and Planning Phase

Entitlements. Consideration of entitlements is the first step of the pre-construction phase. “Entitlements” are approvals associated with a project’s intended use, conformity to a municipal plan, and the design and appearance of a proposed structure. While typically associated with vacant land, they also pertain to existing structures, for example, changing the landscaping or appearance of a building. Common entitlements include variances for parking, building height, setback and appearance to conform to the surrounding area. Entitlements also are granted for zoning and land use, e.g., building a commercial establishment in a residentially zoned area.

Securing entitlements is an extensive process and may involve multiple entities at the local and state levels, including your local planning department. Federal approval is sometimes required, e.g., related to environmental impact. You may also be required to inform the general public of your intent to obtain an entitlement and to hold a public hearing to address questions or concerns. Expect the entitlement process to take anywhere from three months to a year or more, depending on the project’s complexity and the municipality. A project manager familiar with the process (and the players) can save you substantial time and money to keep your project moving forward on track.

Zoning Use. As part of the entitlement process, determine if a zoning change or text amendment is needed for your project. Zoning refers to regulations specifying what can and cannot be built on a given parcel of land (or operations within an existing structure). Municipal zoning maps will determine what zoning category your construction site belongs to.

However, knowing the current zoning designation (e.g., “residential” or “commercial”) is just the beginning. You must also determine uses allowed under the assigned zoning designation and if any restrictions apply to your planned use. Assuming existing permitted property use will be extended to you is a common owner mistake. The former owner may have secured a variance, or its use was grandfathered—an entitlement that may not automatically extend to a new owner. Changes in the surrounding area, e.g., more or less homes, may inhibit your ability to secure the same variance. Alternatively, other approved variances in the area may help support an argument for a zoning change in your favor, or the property may come under a pre-existing nonconforming use clause, which may guarantee continued use of a property as it currently, even if it violates current zoning regulations. The bottom line with zoning and land use regulations is never to take anything at face value.

Permitting and Regulatory Compliance. The permitting process pertains to municipal health, safety and building code standards. For example, an office building owner who wishes to install an elevator will go through the permitting process to ensure the mechanism is installed safely and adheres to building codes. Manufacturers and businesses that handle hazardous materials or dispose of spent production waste may require special permits. It’s not unusual for an owner to be unaware of the required permits and limitations associated with a location. Like entitlements, the permitting process must occur before construction begins.

Acquiring Entitlements and Permits. The processes for acquiring rights associated with land development and property usage vary significantly by location but share some common steps, including plan submission, staff reviews, planning commission hearings, planning and zoning hearings, public hearings, plan alterations and re-submission of plans—starting the entire cycle over to secure entitlements. Unlike entitlements, including zoning, there is generally less room to diverge from the municipal standards regarding permits.

Value of a Project Manager in the Pre-construction Phase

Navigating the web of overlapping municipality regulations, various processes, and meetings with civic leaders and the public to explain development plans can be overwhelming for even experienced building owners. An experienced construction project manager can efficiently manage these processes.

Additionally, skilled project managers in your market will have in-depth knowledge of local zoning requirements, a sense of related granted entitlements and the permits that will be required. With this knowledge, they can quickly determine the entitlements and permits needed and identify red flags early in the process to allow alterations to design plans before putting significant time and money into a project unlikely to get approved as initially planned. Undertaking the entitlements and permitting phase simultaneously with the design phase can simplify the approval process but requires coordination between all parties.

Finally, a skilled construction project manager has experience with community relations—including serving as a liaison to city officials and civic or neighborhood groups to help secure the support required for approvals.

Build Phase

Once necessary entitlements are obtained and required permits are in hand, the construction manager continues to play a vital role throughout the building phase related to the approvals and permits, including overseeing inspections, regulatory compliance and general quality control, as well as helping resolve issues that arise during the building phase.

Inspections, Compliance and Quality Control. Beyond securing necessary approvals and permits, construction project managers confirm all work is performed according to building codes and adheres to the contract documents. Most projects must undergo an inspection before final approval. Correcting deficient work is a costly undertaking and can create significant delays.

A construction manager establishes quality controls beginning in the pre-construction phase of a project, communicating with the owner and the design team along the way. Taking a project plan from paper to a brick-and-mortar structure involves managing crews of skilled laborers. Project managers interact with engineers and construction and system specialists—ensuring work is performed to the agreed-upon standard and will pass all inspections.

Manage Changes as Necessary. Change orders—an amendment to a construction contract that changes the scope of work—are commonplace. For example, changes to the planned use of the space may necessitate moving a wall. Or, an owner may wish to change internal finishes in response to a tenant’s interest. The construction contractor and the owner must agree to the terms of a change order (including cost) before it’s implemented into the project.

Unless the change order is to reduce or eliminate an element of the design plan, change orders typically result in higher costs due to delays, additional work, changes in materials or some combination of all three. During the build phase, a construction manager should review, assess and negotiate change orders to minimize project cost overruns. While it’s impossible to anticipate every issue or variable in a project during the pre-construction planning phase, a proficient construction manager can reduce change orders through careful pre-construction planning.

Issue Resolution. A construction project manager is the “middleman” between owners, investors, and teams doing the on-site work. Disputes may arise, especially for large construction projects where multiple contractors perform work—perhaps simultaneously. The construction manager becomes the de facto traffic controller, determining what work is done and when. When there is conflict, the manager facilitates agreement from the various teams to keep the project moving forward.

Communication is at the heart of nearly every situation requiring issue resolution, including:

  • Poorly defined project scope or goals or lack of consensus around goals
  • Insufficient information sharing among stakeholders and lack of stakeholder feedback
  • Lack of clarity regarding who is responsible for specific outcomes
  • Misaligned expectations among stakeholders

Skilled construction project managers set up communication channels and ensure all stakeholders understand and follow through on their roles when it comes to communication. Beyond assisting with issue resolution, good communication helps keep projects on track, improve productivity and construction outcomes, minimize risk, reduce instances of change orders, and avoid “scope creep” and resulting cost overruns.

Assist with Document Review. Substantive paperwork is associated with all aspects of the pre-construction and build phases. Whether to document the argument for a zoning change or to track elements of a quality control inspection program, a construction project manager is the centralized point person to ensure accuracy, consistency and met deadlines.

If there is any doubt about the value of a construction manager for a project facing entitlements and permitting, remember that the construction project manager’s job is to act as the owner’s representative and provide objective project management and technical expertise from the initial planning and feasibility of a project through the building phase and inspections before occupancy. Having confidence a project will successfully move through the associated approvals and permitting processes is invaluable.  

GNP Realty’s in-house family of diversified companies provides our clients with full-service strategy and hands-on support for all your real estate needs. From brokerage and management to construction and maintenance, we tailor our commercial and residential services to help you achieve your goals as a property owner or investor.