So what’s the best strategy regarding investing in land for development or as a ‘Buy & Hold’ option? I shared in Land 101 that development doesn’t rise from thin air. My generalized answer is to check the roadmap. Some construe the General Plan as the authoritative map, let’s see what the land is zoned for. Zoning changes over time, requests can be made, revisions are made, zoning emphasis can change with economic conditions, but how a City or Region is laid out rarely changes.
Okay then, what’s the roadmap? I literally mean the roadmap. Wherever you go you will find a transportation related document. Roads are planned decades out. Once identified, they establish a ‘grid’ in which various types of development will be laid out with a zoning component. Traffic Engineers are the unsung heroes of development. They create a circulation pattern that ultimately will result in a speed limit of 25 mph, 40 mph or more of a higher speed expressway. They will determine the Primary and Secondary roads determining in large part where commercial growth will occur as opposed to residential. Bus routes or other mass transit will depend on their creativity as well.
I had an Associate contact me recently on an expired listing from another Brokerage. The parcel was designated as rural residential, however it was situated at a four-way stop. Development is headed from west to east. Additional development is headed from south to north. When will this rural four way stop have a signal? When will the zoning designation change to commercial? I really can’t say, but the odds are great that it will happen, the price will increase (Seller is already trying to factor the future in), and in this case it’s likely only two corners will serve as commercial, stoking the eventual high demand. Will other side streets gain status as a 4 way stop in the area? The answer will generally depend on spacing based on circulation conditions.
If you are considering infill development, I recommend you analyze existing traffic circulation as it could be an asset to your plans or a complete calamity. If you are looking to invest in growth patterns, you now know a key starting point to asking your real estate planning expert questions.