This article was featured in the Spring 2025 edition of USLAW NETWORK, Inc.’s USLAW Magazine.
In our last article, we discussed the zoning standards that may be implicated when retrofitting existing retail buildings to accommodate the rise of online shopping and related operational changes, including curbside pickup. We also discussed how retailers, even with demand for high-quality retail space on the rise while inventory remains relatively low, may prefer to start from scratch, building or moving into a new space, rather than retrofitting an existing one.
Those retailers choosing new-builds over retrofits should be mindful of current land use trends, which necessarily will impact the development process. Attention to these trends may influence how retailers select and design new sites, which will dovetail into an evaluation of whether current zoning regulations permit these changes. Doing this analysis up-front will save retailers time, money, and headaches.
Here, we examine some of those zoning trends, and highlight how they may impact a retailer’s approach to developing a new site.
Artificial Intelligence (AI)
AI-driven technology is here to stay, and it will continue to impact most if not all sectors, including real estate. Indeed, AI already is part of the retail industry, helping retailers manage inventory and supply chain demands, predicting consumer behavior patterns, and recommending products to consumers based on purchase histories. Generative AI, or Gen AI, which can create content with text (like ChatGPT), code, audio, image, video and 3D imagery, can also be used in a variety of ways during the zoning approvals process. For example, Gen AI can create realistic renderings of retail-focused neighborhood centers, architectural elevations, and floor plans in a matter of minutes, when historically, the process took weeks or even months. Gen AI may even be able to assist with the drafting of zoning regulations, assembling suggested planting lists, and answering legal questions that arise during the land use process. These advances will impact not only how retailers operate on the day to day, but may expedite the land use permitting process. Retailers should continue to explore the use of Gen AI to increase productivity and improve business. However, Gen AI is not ironclad, and retailers should review AI work product at every step, ensuring the accuracy of design documents, proposed zoning regulations, planning materials, and the like. Trust but verify.
Climate Change Challenges
In 2022, nearly 33 million people were displaced globally due to natural disasters, including floods and droughts. 2023 was the warmest year since global records began in 1850. Concerns with water supply, water and air quality, stormwater management in the face of unprecedented rains, and other climate-related issues will continue to directly impact development for the foreseeable future.
In addition to heightened development standards, regulations, and policies, retailers should expect to be put to task on these issues when designing new sites. Low-impact development, or LID, as well as green energy features will be highly-recommended, if not required.
Retailers can save time by recognizing these concerns at the beginning of the design stage and incorporating green features into their development plans. LID, which reduces flooding and stormwater runoff, thereby improving water quality, among other things, can include rain gardens, green roofs and permeable pavements. Green energy features can include the use of renewable energy like solar; the incorporation of high-efficiency building materials, including windows and insulation; and the enhancement of indoor environmental quality measures, such as incorporating air purifiers and ensuring adequate ventilation. Working with consultants well-versed in these design features will be key.
Neighborhood Centers and Transit-Oriented Development
Mixed-use spaces are not new, but they’ve had a recent surge in popularity given the push for “live, work, play” communities. These developments, which combine residential, commercial, and other recreational uses, are reshaping how many shop, work, and interact with one another. Another popular trend in land development is the creation of transit-oriented development (TOD) areas that emphasize the integration of residential, commercial, and recreational spaces around public transportation hubs, such as bus or train stations. These areas are typically comprised of walkable communities that encourage the use of public transit and reduce reliance on cars.
Because mixed-use and TOD areas facilitate walkable communities and, thus, increased foot traffic, it is no surprise that they are appealing to retailers. Retail tenants are often willing to pay higher rents in these areas given the increased consumer traffic. This makes sense given that consumers living in these areas are able to lower their transportation costs and then redistribute that income into the retail and entertainment uses nearby. A win-win, so to speak.
While mixed-use/TOD nodes are desirable, retailers may face obstacles securing and developing retail spaces in those areas. One very real challenge is the lack of inventory, which creates competition and increases costs. The dearth of available space may be due in part to restrictive zoning, which often favors low-density developments, particularly in suburban communities. For example, zoning regulations may prohibit more than one principal use on a single parcel or restrict multifamily housing altogether, essentially preventing the very mixed-use/TOD developments retailers and municipalities alike are seeking to create. Restrictions like these result in communities that are more spread out and less connected, making them less attractive to retail development.
Fear not, though, because change is possible. The focus on neighborhood centers has forced many municipalities to take a hard look at how to revitalize their downtowns, including how to zone those areas to attract new development. Retailers would be well-served in focusing on those towns and cities first in hopes that change would be welcomed with open arms. Effectuating that change can be done in myriad ways. For example, in Milford, Connecticut, one developer was able to secure land use approvals to redevelop a mostly-vacant, 47-acre office park into a thriving mixed-use community by, among other things, revising the zoning regulations to permit the intended uses, thereby opening the door to the other approvals needed for the site.
Another viable option is the creation of a floating zone, which is a zone that does not have a predetermined location on the zoning map, but can “land” on a particular parcel by zoning commission approval. This approach can help accommodate new developments that might not fit neatly into existing zoning categories. Farmington, Connecticut successfully used a floating zone to create, maintain, and incentivize the expansion of a bio-medical corridor, which now includes multifamily housing, at least one restaurant, and other “live, work, play”-related uses.
Given the desirability of mixed-use and TOD areas, partnership with the municipality itself, and even other existing retailers in the area, may be possible. Retailers should leverage local connections to determine if such a partnership would be worthwhile.
Parking – Is Less Really More?
While every builder has been told at one time – or many – that they have not provided enough parking, the reality is that America is grossly over-parked. This demand for parking, regardless of whether or not it is actually needed to serve a proposed use, has had devastating environmental impacts, altered the architectural integrity of neighborhoods, and stymied development altogether when often arbitrary parking requirements could not be met. With four parking spaces for every one car in the U.S., some cities are finally looking to reduce surface parking, which retailers can and should capitalize on.
For example, Hartford, Connecticut was one of the first cities in the country to eliminate minimum parking requirements, implementing instead maximum parking requirements and minimum bicycle parking requirements. According to one article, this regulatory structure shift is helping the city “reposition…itself for a future with less dependence on the automobile.” Buffalo, New York also eliminated its outdated minimum parking requirements, noting that the prior zoning code allowed stores to be built on oversized lots, with no pedestrian access, instead of incentivizing walkable neighborhoods.
Retailers should take a hard look at local parking requirements and see if there is an opportunity for change. If zoning regulations require excessive parking spaces, approach municipal officials with the volumes of data available on over-parking, and be ready to “substitute” parking with other improvements, including public transportation improvements, such as bus shelters; pedestrian improvements, like crosswalks and signal timing changes; and non-vehicle transportation-related amenities, like bike racks.
Ultimately, the future of zoning is not just about adapting to changes; it is about seizing opportunities to shape more resilient, efficient, and vibrant communities. Retailers who embrace innovation—whether through AI, sustainable design, or strategic partnerships—will not merely respond to trends; they will help set them, playing a crucial role in redefining how we live, work, and shop. By actively engaging with these zoning trends, retailers will have the power to influence and co-create the urban landscapes of tomorrow. Working with experienced land use counsel is the best way for retailers to chart a feasible and efficient path to approval.
