By-right development

A project is by-right when the zoning code already permits it and the only question for the local government is whether the plans meet the written rules. Review is administrative: staff check the drawings against the code, the developer fixes what does not comply, and permits issue. There is no public hearing at which the project can be denied for reasons outside the code, and no negotiation over conditions.

The alternative is discretionary review, in which a project needs a rezoning, a variance, a conditional use permit, or a planned development approval. Each of those involves a board or council with the power to say no, or to say yes with conditions that change the project. Discretionary review takes longer, costs more in consultants and legal fees, and carries a real risk that the project never proceeds.

For housing costs, the difference is priced into land and into the return investors require. Land with by-right approval for a given project is worth more and is bought by developers who can proceed quickly; land that needs discretionary approval is worth less and requires a developer willing to carry entitlement risk. Assume the difference is a year of process on $6,000,000 of land and soft costs at an 8% cost of capital: that is $480,000, about $33 per unit per month on 100 units, before counting the projects that are never attempted because the outcome is uncertain.

Expanding what is allowed by right is one of the more common zoning reforms proposed to lower housing costs, and one of the more contested, because it removes the case-by-case review that neighbors often value. We lay out both sides in Zoning and Regulation.