Developing unimproved land can be a very profitable business endeavor. Whether developers intend to build bespoke standalone hosting units customized to buyers’ preferences or an office park, the property, when developed, could generate a substantial amount of revenue.
However, there are many hurdles for real estate developers to overcome when attempting to convert unimproved land into residential properties, commercial facilities or an industrial complex. Some of those challenges are highly unusual and only occur in specific scenarios. Other challenges are common and might arise in a variety of different situations. The three issues below are among the most common challenges that real estate developers need to overcome when they attempt to improve vacant land.
Zoning problems
Ohio zoning rules restrict what owners can do with a specific parcel. While existing businesses and properties sometimes have protection from new zoning rules, new developments must typically adhere to zoning rules. Otherwise, developers may need to apply for a zoning variance or request the rezoning of a parcel. That process can be very complex and could lead to delays or a failure to change a parcel’s zoning.
Environmental surprises
The development of unimproved property often requires an environmental impact study. Professionals must come and evaluate whether changing the land could affect local ecosystems or animal populations. The discovery of groundwater sources or endangered species at a parcel could limit the ability of developers to move forward with the project as planned. They may need to massively alter project plans or give up on the development altogether when environmental reports indicate that development would affect natural resources, the local ecosystem or endangered species.
Community pushback
Many communities feel strongly about preserving certain characteristics. For example, if an area has agricultural heritage, local property owners may not like the idea of converting vacant agricultural land into a large housing development. Developers sometimes find that those already living in an area may fight them tooth and nail to prevent them from doing what they want with the property. Learning the local culture and making the project as appealing as possible to existing landowners could help overcome this obstacle in some cases. Other times, preparing for a protracted fight may be necessary when a development plan is not popular with the local community.
Understanding what challenges could potentially arise during a development project can help executives and business owners prepare for issues that could complicate their plans.