Federal Land Use Laws & Regulations

Instructor: Shawn Grimsley
The use of real estate is regulated at the federal, state and local levels. In this lesson, we will be focusing on the land use laws and regulations enacted at the federal level of government.

Overview of Land Use Laws

Real estate is an important and finite resource. In recognition of this fact, development of real estate is regulated through land use laws and regulations that control how you can use a particular parcel of real estate, such as zoning ordinances enacted by city governments. You'll find land use laws and regulations at the local, state and federal levels. In this lesson, we're going to take a look at some of the primary federal land use laws.

National Environmental Policy Act

It may come as a surprise to you, but the federal government not only polices how private parties use real estate but also polices itself. The National Environmental Policy Act (NEPA) requires that the federal government consider the environmental impact of any major act it takes that may affect the environment in a significant manner.

According to the Environmental Protection Agency (EPA), federal projects that bring the NEPA into play include, but are not limited to, construction of airports, military bases, highways and parks. Before green lighting a project that falls under NEPA, the government is required to undertake an environmental assessment (EA). The end result of this analysis is a report called an environmental impact statement (EIS), which discloses any possible environmental impacts of the proposed project, such as the impact a new highway may have on the habitat of an endangered species.

CERCLA

Another federal law related to land use is the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as the 'superfund.' CERCLA was enacted by Congress to clean up land that has been contaminated with hazardous or toxic substances. These pieces of land are commonly referred to as 'superfund sites.'

Importantly, CERCLA also imposes liability on certain responsible private parties involved with properties that are contaminated by requiring them to pay to clean up the mess. Responsible parties may include current owners of the property, past owners of the property, arrangers who arranged for disposal of the toxic substances on the property and transporters who transported the toxic materials to the property. Even more importantly, a responsible party can include a current owner of the property who played no part in causing the contamination. Consequently, it's important for purchasers of property to carefully inspect properties for environmental issues, especially if the property was used for commercial or industrial purposes, such as a factory or gas station.

National Historic Preservation Act of 1966

Sometimes laws are enacted to protect the past. The National Historic Preservation Act of 1966 (NHPA) is one such law. The Act created a National Register of Historic Places, which is a list of properties that have been determined to be of historical significance, such as the New York Public Library. As of 2015, there are more than 90,000 properties on the register. You should keep in mind that privately owned properties are eligible for inclusion on the list, such as an old hotel converted to an apartment building.

Projects that alter a property that's on the register (or eligible to be on it) are reviewed before the alterations are made to determine if the project may have an adverse effect on the historical property. This process is known as the Section 106 review. Examples of adverse effects include, but are not limited to, physical destruction or damage, relocation, change in character, change in use and adding historically incompatible elements. For example, a project gutting the interior of the New York Public Library to replace its historic characteristics with a sleek new modern design may be considered as having an adverse effect.

Each state has a State Historic Preservation Officer (SHPO) who works with federal agencies and property owners during the process. If the review process finds that a proposed project will adversely affect the historic property, the parties will try to reach a mutual agreement to resolve the problem.

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