Description
Zoning Certificates City of Johannesburg and Rezoning Applications in South Africa
Just about everybody has heard of zones and zoning in relation to property, but the average property buyer or owner has little – if any – clear knowledge of what the different zones are, if and when one needs to apply for any form of zoning or re-zoning, and how to go about this task.
The different types of zoning
For the purposes of this, we are discussing the three basic categories of zoning – residential, business and industrial – and how each category is then sub-divided further into different zones.
Residential Zoning
Looking first at residential property, there are four categories, and restrictions on the building or buildings to be constructed on the property are determined in terms of three elements known as coverage, F.A.R. (floor area, ratio) and density.
Coverage is the maximum area of land on which one is permitted to build; F.A.R. (floor area ratio); bulk is the maximum floor area allowed under a roof; and density is the number of dwellings permitted per hectare (10 000 square metres).
Residential 1
Residential 1 is the zoning which stipulates that properties can have a density of only one dwelling per stand or erf, that is, a house.
An example here would be as follows:
Firstly, one is allowed to build one house on the property in terms of this zoning. Coverage permitted is 40%, which means that on a 1 000-square metre stand one would be permitted to build a dwelling covering a maximum of 400 square metres, including garages and outhouses. If one is given the right to build a two or three-storeyed home, one can cover up to 400 square metres per storey. The footprint cannot be more than 400 square metres.
Residential 2
Residential 2 allows a density of between 10 and 20 dwellings per hectare, bearing in mind that a hectare is 10 000 square metres (or just under 2.5 acres). This is obviously the ideal zoning for cluster housing or townhouse complexes.
Residential 3
Residential 3 permits a density of between 21 and 40 dwellings per hectare, and is therefore usually used for smaller cluster or townhouse complexes.
For example, on a 26 000-square metre property, 40% coverage amounts to 10 400 square metres. With a density of 25 units per hectare, the developer on this site could then typically build 65 townhouses (2.6 hectares’ x 25) of 160 square metres each (that is the total coverage of 10 400 squares metres divided by the 65 units) over two floors – 100 square metres at ground level (including a double garage) and 60 square metres upstairs.
Residential 4
Allows for a density of between 41 and 120 dwellings per hectare, and obviously caters for the construction of blocks of flats.
Business Zoning
Moving on to business property, once again there are four clear sub-divisions.
Business 1
Business 1 is the zoning one would seek for general business in the form of shopping centres or malls. This category is mostly unrestricted, which means that the developer or owner would be allowed to have almost any type of shop on the premises.
Business 2
Business 2 is a zoning for a shopping centre, but with certain restricted businesses.
For example:
Because of the location or immediate surroundings a restriction may be placed on opening a bottle store, or a pet shop.
Business 3
Business 3 is a stricter zoning which will not allow a wider variety of businesses to open and operate in the centre.
Business 4
Business 4 is the final zoning category for business, and does not involve shopping centres or malls at all.
It provides for office use (with or without residential use) and is typified by the growing number of office parks that one sees in South African urban centres today.
An example here:
A 4 000-square metre property with the usual 40% coverage and 0.4 floor area ratio could place a maximum of 1 600 square metres under roof. Assuming he has been allowed a maximum of two storeys, a developer of this site would typically build three double-story office blocks of 530 square metres each (1 600 square metres divided by 3). Each block could be further split into four office suites of 132 square metres each.
Industrial Zoning
The final category involves industrial property, and has three sub-divisions.
Industrial 1
Industrial 1 provides zoning for normal factories, warehouses or storage depots.
Industrial 2
Industrial 2 is specifically for operations which can involve noxious and/or unpleasant odours and emissions, such as abattoirs, foundries or glue works.
Industrial 3
Industrial 3 is the final zoning, and caters for specific applications such as specialist workshops or mini-factories.
For industrial zoning a 70% coverage is typically allowed, which means a 3 100-square metre property could have buildings covering a floor area of 2 170 square metres. Let us say it has also been granted a height restriction of 20 metres maximum. A developer of this site would typically build a single-storey factory warehouse unit of 2 170 square metres with a high roof for an application like a gantry crane or pallet storage.
When is zoning or rezoning necessary?
As far as residential property is concerned, usually one is looking either to rezone or to sub-divide a particular property.
Re-zoning could crop up – for example:
If one is running a business from home, and the business grows to the extent that traffic and activities reach a level which could upset and inconvenience neighbours. One would then apply for rezoning from a Residential 1 to a Business 4 category. This would generally not apply in the case of a small home business with two or three staff, one or two cars, and occasional client visits.
Property Sub-division
Sub-division, very simply, comes into play if one owns a large property (of 2 000 square metres, for example) and wishes to break it down into (say) four separate units. In this case one would apply for the property to be converted from a Residential 1 zoned property with one dwelling per stand, to a property zoned for one dwelling per 500 square metres.
In the case of residential or industrial property, obviously anyone contemplating the opening of a business or industrial undertaking will have to ensure – in looking for a suitable property – whether it is correctly zoned. If not, the prospective businessman or industrialist will have to submit the necessary application for zoning to the relevant local authority.
How do I apply for re-zoning?
No matter which option one is applying for – be it any of the subdivisions in the residential, business or industrial category – one has two options.
First option:
First of all, we are one email away form assisting you with this entire process
The advantage here is that the application is being handled by a specialist who is familiar with all aspects of the procedure, and who will follow it through to its logical conclusion both efficiently and effectively. The disadvantage, of course, is that one will have to pay a fee for this service, although one should bear in mind that any such fee may well be the cheaper option in the long run.
Second Option:
The alternative is to handle the entire procedure oneself, but be warned that it can be a long and laborious affair which could stretch to anything between two months and two years.
Should one choose this option, the essential first step is to arrange an appointment with the town planner of the relevant municipality. He or she is the expert, and will be able to provide you with a step-by-step guide of exactly what you have to do and what documentation you will have to obtain and complete.
Bear in mind, however, that in a less than perfect world the fact that one is armed with a detailed “to do” list does not necessarily mean smooth sailing. On the contrary, one is more than likely to encounter an ongoing series of hurdles and problems for which one has no answers.
Never feel too embarrassed to contact us with each question that crops up. It is far better to consult the expert than to take an ignorant and ill-advised stab in the dark oneself.
It is that sort of irresponsibility that will take far more of one’s time, and in the long run will cost one far more money than any fees one pays
Tap into your property’s zoning value
Thousands of real estate investors in South Africa are losing out on untapped revenue because they haven’t taken time in recent years to understand their property zoning conditions and the potential value locked in unexploited development rights.
The concept is simple; zoning directly affects the monetary value of your property, The effect is sometimes so dramatic that the sale prices of neighbouring properties which appear almost identical can differ by thousands or even millions of rands depending on their zoning.
“By law, every property in South Africa is zoned for a particular purpose,” explains Dart. “In a nutshell, your property’s zoning defines what you can and can’t develop on it.
“There are numerous zoning categories, but the main ones for private and corporate investors are – broadly speaking – residential, commercial and industrial.”
Profit Zones
He says there are two avenues from which to leverage additional zoning value.
“A property’s current zoning is noted on its zoning certificate, but at High Street, we’re constantly amazed by the number of property owners who don’t know what theirs is.
“Not knowing means you’re potentially losing money because if you own real estate in a desirable location that you haven’t fully developed according to its zoning conditions, chances are a developer will be interested in taking it off your hands and pay handsomely for the opportunity.”
Dart says the second avenue to unlock value from zoning is to explore a property’s rezoning options.
“This is particularly important for long-term investors who have owned their properties for a decade or more because there have been significant changes to municipal by-laws since the implementation of the Spatial Planning and Land Use Management Act (SPLUMA).
“One of SPLUMA’s requirements was that by 2020 every municipality in South Africa had to establish a land-use scheme in compliance with the Act. As a result of this spatial framework realignment, opportunities for new development paths have arisen in many areas.
“So even if you know what zoning category your property was assigned at the time of purchase, it’s worth contacting your local town planning department to find out if any new rezoning possibilities now exist.”
Dart says the rule of thumb in ascribing worth to zoning is the more you can do with a property in terms of use or expansion, the more valuable it will be to buyers.
Zoning by Category
For corporate and private investors, the main zoning categories are:
Residential:
- Residential 1 – The zoning that stipulates one dwelling per stand.
- Residential 2 – This allows for a density of between 10 and 20 dwellings per hectare (10 000m²) and is ideal zoning for cluster housing or townhouses.
- Residential 3 – Zoning permits between 21 and 40 dwellings per hectare, which is ideal for estates and larger complexes.
- Residential 4 – Zoning allows for between 41 and 120 dwellings per hectare and usually applies to apartment blocks.
Business/Commercial:
- Business 1 – Applies to general business, retail centres, and malls. Has few restrictions, so owners are allowed to have almost any type of shop on site.
- Business 2 – Also zoning for retail, but with certain trade restrictions.
- Business 3 – A more restricted zoning that does not permit a wide variety of businesses to open and operate in a centre.
- Business 4 – Zoning given for office developments; most typically the thousands of office parks scattered across South Africa. Can also include a residential component.
Industrial:
- Industrial 1 – Zoning for factories, warehouses, and storage hubs.
- Industrial 2 – Strict zoning for industries that involve noxious and/or unpleasant odours and emissions like abattoirs, tanneries, and foundries.
- Industrial 3 – Zoning for specific applications such as specialist workshops or mini-factories.
To Rezone or Not?
Dart says while it is true that broader zoning latitude increases property prices, owners seeking to increase their resale values by way of rezoning should carefully consider their options before starting a process they can’t reverse.
“You have to understand your market and the only way to do that is with expert advice.
“If you own a large Residential 1 property and decide to apply for Residential 2 rezoning, the process is going to be costly, intensive and long – up to two years in some districts.
“Imagine putting in all that time and effort, only to discover when you try to sell that the highest demand and highest prices being achieved in the area are actually on properties zoned for business.”
Dart says changes in zoning can also affect rates and taxes that a property attracts so it is essential that there is a business case for rezoning land for enhanced rights that could incur higher rates and taxes.
“Sellers need to stay on top of market conditions, and educate themselves about both tangible and prospective value touch-points.
“Property owners must put zoning on the radar if they want to leverage maximum returns when they sell. There’s unquestionably significant profit potential in unrealised real estate development rights.”
Check the zoning rights before buying a home for business use
How often do we see those adverts “perfect for home-office” or “ideal for business” on an estate agent’s advertising platform and take it as a given that the said property is in fact ‘ideal for business’? Often these advertising statements are either loosely, incorrectly or deceitfully used in order to make a property more attractive to buyers.
PJ Veldhuizen, CEO of Gillan and Veldhuizen attorneys, who have a specialist conveyancing and property law division, warns both estate agents and buyers of the danger of not checking if a property you are buying or selling for commercial use is zoned correctly.
Veldhuizen says the Zoning Scheme Regulations laws are aimed at achieving systematic and rational development of land and land use in an area of jurisdiction. The purpose naturally is to achieve a proper balance between competing rights and the interests of residents.
Part III of the Zoning Scheme Regulations serves to determine use zones and the uses to which property in those zones may be put. Regulation 3.11 allows for the practice of a profession or occupation from home. Professionals such as lawyers, doctors, dentists or architects often opt for this type of property as it is most suitable to their commercial needs.
In a recent case in Grahamstown, the court ruled that the owner of a day spa, who was operating her business from her home, was in contravention of the Zoning Scheme Regulations and interdicted her from using her property to trade as a business.
Commenting on the ruling, Veldhuizen says it is reckless for estate agents to advertise such properties without checking with the town planning division on the zoning rights.
“Often estate agents will be told by the seller that the commercial rights are sound and will not do their own due diligence and check the facts. Estate agents and sellers could find themselves in trouble as a complaint could be laid at the Estate Agency Affairs Board (EAAB) and, furthermore, a claim may lie against the seller due to a fraudulent misrepresentation,” he says.
“Re-zoning of a residential property for business use is a specialised service which requires the assistance of a town planner and usually an attorney – the process is not a simple one, nor is it speedy, and business owners could find themselves unable to run their businesses while waiting for re-zoning approval,” says Veldhuizen.
Veldhuizen advises prospective buyers firstly to request the title deed of the property, and secondly to check the zoning rights with the city’s zoning map.
Know before your buy! A practical guide to understanding zoning laws
Most people are familiar with the basic concept of zoning – that it determines the purpose for which a property can be used. However, many aren’t aware that there are also numerous sub-categories that can offer savvy investors potentially lucrative investment opportunities.
And, as the Johannesburg property landscape continues to transform in response to market shifts and emergent trends, a thorough understanding of zoning and land use regulations is key to reaping maximum returns in this dynamic market.
This is according Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg, who adds that because rezoning a property is a time-consuming process, it can cause costly delays if applied for after purchase.
“First prize is to buy a property with approved zoning already in place and when such properties do come onto the market, especially in sought-after nodes, investors must be able to recognise the value and potential so as not to miss out on remunerative opportunities.”
He advises that it’s therefore essential to familiarise oneself with the three factors that determine the restrictions of buildings to be constructed in this category; namely coverage, F.A.R (floor area ratio) and density.
“Coverage is the maximum area of land on which one is permitted to build; F.A.R. is the maximum floor area under roof allowed, and density is the number of dwellings permitted per 10 000sqm.”
Grahame Diedericks, Manager Principal in Midrand where development has been the order of the day in recent years, says: “To most people’s minds, residential zoning is simply a choice between sectional title and freehold and, until a few years ago, it wasn’t necessary know any more detail.
“But nowadays it quite literally pays to be aware of – and understand – the applications and regulations of the sub-categories.”
Residential Zoning
Residential 1: This density stipulation allows for only one dwelling per erf – a house with a permitted coverage of 40% of the total erf size, including outbuildings and garages. Regardless of whether it is a single or double-storey home, the 40% footprint applies.
Residential 2: This category allows for a density of between 10 and 20 dwellings per 10 000msqm and it is, therefore, the preferred zoning for cluster or townhouse developments.
Residential 3: Allows for a density of between 21 and 40 dwellings per 10 000sqm which is ideal for secure estates and larger cluster complexes.
Residential 4: This zoning permits a density of between 41 and 120 dwellings per 10 000msqm and therefore is most commonly applied for when constructing blocks of flats.
The growing prevalence of mixed-use areas in Johannesburg has elevated the significance of zoning in the commercial sector and properties with business rights in these areas highly sought after.
However, Diedericks cautions that the zoning stipulations must be strictly adhered to by developers, landlords and business owners in order to co-exist harmoniously with the residential component in these suburbs.
“And if you are considering purchasing land or property for business purposes that will require rezoning it’s a good idea to check the perimeter of the area to determine where the business district meets the residential neighbourhood.”
Business/Commercial Zoning
Business 1: This zoning applies to general business, particularly retail, in the form of shopping centres or malls. This category is largely unrestricted in terms of what type of shops the developer accepts as tenants.
Business 2: This also pertains to shopping centres, but with certain restrictions which usually apply to the property’s immediate surroundings. For instance, a restriction may be placed on opening a bottle store if the centre is adjacent to a school or popular child-friendly venues.
Business 3: A stricter zoning which will not allow a wider variety of businesses to open and operate in the centre.
Business 4: This zoning provides for office use (with or without residential use) and is typified by the growing number of office parks that one sees in South African urban centres today.
The availability of parking may affect the type of commercial zoning that is permitted and there can also be rules regarding the proximity of certain types of businesses to others.
Industrial Zoning
Unlike residential and business or commercial zoning, for industrial zoning, a 70% coverage is typically allowed
Industrial 1: This provides zoning for standard factories, warehouses or storage depots.
Industrial 2: This zoning is specifically for operations that can involve noxious and/or unpleasant odours and emissions, such as abattoirs, foundries or glue works.
Industrial 3: This zoning provides for specific applications such as specialist workshops or mini-factories
“Although the stipulations are strictly regulated, it is also possible to combine zoning designations to form a combination-use zone that is unique to needs the community or project at hand, however, it is always advisable to consult a town planner to avoid lengthy and costly delays, says Odendaal
“Yes, you will save on this fee by doing it yourself but the advantages of your application being submitted by a specialist who is familiar with all aspects and potential pitfalls of the lengthy procedure as well as all the relevant departments and officials is immeasurable.”
