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Abstract
Real estate developers may apply to re-zone a parcel of land when their development plan does not conform to the original zoning, or when economic conditions change and they decide that they need to revise their plan to one that is non-conforming. When the revised plan conflicts with the vision or values of other stakeholders (e.g. neighbors, local government), the real estate developer enters a decision process with both risk and uncertainty, while at the same time the affected stakeholders are placed in the reciprocal decision process. This process resembles a game with repeated plays as the developer and stakeholders proceed through information sessions, local government review, planning or zoning board hearings, and decision making bodies. This paper will explore the recent efforts of a local developer to rezone portions of an upscale residential neighborhood to condominiums and the complex interactions among the various parties from the perspectives of stakeholder analysis and game theory. The goal of this case study is to identify methods of informing the participants of the re-zoning process for improved outcomes. Recommendations for improvement of outcomes will be presented, as well as considerations for further research to expand the generalizability of the developed approach.
Key Words
Real estate, Rezoning, Game Theory, Zoning, Stakeholder Analysis, Land Use
1. Introduction
In early 2010, the residents of an upscale, partially completed lakeside community were informed by their developer that a rezoning effort would be initiated by the developer. The great recession had dramatically slowed sales of building lots, and the developer felt economic pressure to apply for a zoning change. Underlying the developer's request was a fundamental change in the development plan. Previously, the developer had improved the lots and then sold them to high-end custom home builders. Under the proposed zoning change, portions of the community would be developed as condominiums by the developer, with a dramatically increased density and much lower price point (the expected selling price would be cut by more than 50%, in some cases 75%) as compared to the custom homes.
This paper will examine the basis for zoning regulation, the evolution of zoning, and the evolution of the doctrine of private takings as the prerequisite to the re-zoning process. Next, an examination of the stakeholder analysis...