Improper Zoning Risks

[Derek Cheng]

Hi 

I am looking to purchase a 4 unit property in Philadelphia. Currently it is a (3) 1 bedroom and (1) studio mix. It is zoned residential RSA5 but it is zoned as a 3 unit. Can anyone share some insight on the risks of moving forward with this property as well as how the zoning process works? I dont want to open a can of worms by accident going forward.

Thanks

[Robert Palladino]

Unfortunately I have very little investment experience to date, but fortunately do have a fair amount of experience with the zoning process in Philadelphia. I am an architect in the city who has experience taking projects like this through the appeals process (not selling my services, just giving context). I am actually currently in the process of obtaining a variance to convert my own property which is in a RSA-5 district into a two family dwelling. 

to start: the current zoning board is very developer friendly, so you have that on your side. the other factor that you have on your side is a genuine hardship. You are purchasing an existing four family dwelling, but the seller only has license for 3. It will cause you a financial hardship to convert it down to a 3-unit

This is a rather lengthy process. You're looking at about 3-4 months. The ZBA is backed up at the moment, and they are currently assigning hearings 2-3 months out.

Step 1: submit a zoning application to L&I

Step 2: Wait the 21 working days for the examiner review. upon completion he/she will send you a comment letter stating that your proposed use is not permitted by-right, and will ask if you wish to receive a "Refusal". You say yes, and will be sent the refusal, and instructions on how to file an appeal, along with an appeal application.

Step 3: Once you file the appeal, and pay the appeal fee (usually a couple hundred dollars) you will receive Paperwork for what needs to be done leading up to your hearing date. see next steps.

Step 4: Contact all affected Registered Community Organizations (RCO) to schedule a neighborhood meeting to present your request to the neighborhood. You will need a letter of support from the RCO to send to the ZBA. Don't worry if you don't get their support. It is helpful in most situations, but not a deal killer.

Step 5: The city will provide you with a list of addresses of which you must mail a letter with all of the information regarding your project, and the upcoming neighborhood meeting. The city will supply a template of how this letter should be formatted.

Step 6: hire an architect or draftsperson to draft the existing floor plans, and prepare a presentation. You must have drafted floor plans to provide to the ZBA.

Step 7: This is important. If the property is owned by an LLC or something other than your name, you MUST be represented by an attorney at the ZBA.

Step 8: Attend the ZBA hearing. 

Step 9: Let's say you got the thumbs up from the ZBA, and you're approved, there is one more step, and this one is a pain. Now you have to obtain a building permit for the 4 family dwelling, even if you are not planning on doing work there.

This was as simplified as I could spew out, but my recommendation would be to hire an architect who does these types of application routinely to take care of the whole thing. It may cost you more money than you were planning to spend, but trust me, it's worth it.

I hope this helps

P.S. please excuse any misspellings during my stream of consciousness.....