What part of land development is more complicated than it should be?
Los Angeles, CA · Member since 2026 · 10 posts · 1 vote
What part of land development is more complicated than it should be?
18 Replies
- 1moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
depends on jurisdiction. CA being one of the tougher ones for sure.. in CA you have the SEqua laws which can be frustrating and EIR's which can take years and hundreds of thousands to over a million. etc etc.. then other states not so much Like Oregon for example the land if zoned has already gone through basic EIR stuff so you only do spot studies like maybe wet lands and traffic not a full blown EIR.
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks Jay, this is helpful. The difference between California and Oregon is interesting. When developers are looking at land in different jurisdictions, how do they usually figure out what they’re getting into before moving forward? Are the requirements usually pretty clear from the beginning, or do things tend to come up later?
- 1moAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Zemam, the part that tends to surprise people is how much time and money can get spent before vertical construction even starts.
Entitlements, zoning interpretation, civil engineering, utility capacity, environmental reviews, traffic requirements, surveys, impact fees, permitting, plan revisions, and agency comments can all create delays before you’ve poured a foundation. And because those steps are connected, one change can ripple through several others.
From the tax and accounting side, I’d also keep the pre-construction costs organized from day one. Development costs, engineering, permits, interest, site work, and other pre-development expenses don’t all get treated the same way as ordinary operating expenses, so clean project-level accounting matters a lot.
I’d also separate the development business from any buy-and-hold rental activity. If you’re developing primarily to sell, that’s generally active business income. If you also keep some projects as rentals, those should usually be structured and tracked separately because the tax treatment, depreciation, and potential cost-seg opportunities are very different.
That separation can also create planning opportunities. Properly structured buy-and-hold properties may generate depreciation losses that can sometimes help offset active development income, depending on the participation rules and the taxpayer’s facts.
One other tax-planning point to keep in mind if you’re dealing with unimproved land: if you eventually sell the land rather than develop it and the transaction qualifies, an installment sale may allow you to recognize the gain over the years you receive the payments instead of taking the entire tax hit in the year of sale. That can be useful for managing the timing of the tax liability, although the structure and facts matter.
The biggest headache usually isn’t one permit or one agency, it’s the coordination between all of them.
Feel free to DM me, I’d be happy to send over a few resources that might be helpful.
INVESTOR FRIENDLY CPA®5240 Reviews- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks Ashish, this was really helpful. Your point about the biggest headache being the coordination between everything really stood out to me, especially with how many different pieces are involved before construction even starts. When you say coordination, what does that usually look like in practice, and what tends to make it so difficult?
- 1moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
The lack of uniformity is what makes land development so difficult. From one municipality to another, zoning and building codes, review standards and procedures, civil engineering requirements, and variance processes can all change, requiring developers to navigate an entirely different regulatory framework for each project.
The second part that's overlooked is how quickly building codes are developing along with all of the additional review standards and civil requirements that are being introduced that add time and expense both to the entitlement process as well as the construction execution phases.
My best advice is to familiarize yourself with a single or few municipalities that you intend to focus on and align with local experienced civil engineers and architects.
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks Stuart, this is really helpful. I was curious about your point about relying on local architects and civil engineers because in my own experience, I’ve had situations where even the architect or engineer wasn’t aware of a local requirement until it came up later. Have you run into that too? If so, what do you think is the best way to catch those things earlier?
- 1moDiana KhanPro MemberAttorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 555 posts · 194 votes
Quote from @Zemam Beyene:
I work in construction, and the more I learn about what happens before construction starts, the more I realize how complicated the development process can get.
Between entitlements, permitting, different jurisdictions, pre-construction and everything else that can come up, I was curious to see if other people have had the same experience.
For those of you who have worked on development or new construction projects, what part of the process gives you the biggest headache? What takes way more time or coordination than you think it should?
@Zemam Beyene, one thing I’ve seen cause problems very early is when everyone starts planning the project before really understanding the property itself.
Before getting too far into plans, I like to know things like: Is access clear? Are there easements? Are there deed restrictions? Are the utilities actually available where you need them? Is there anything in the title that could affect what you want to build?
I’ve seen projects lose time because those questions came up after money had already been spent on plans and other work.
To me, that is one of the frustrating parts of development. You can have a great design and a good construction team, but one issue with the land or ownership can change the whole plan.
That is why I think the legal and title review should happen very early, not after the project is already moving.
Since you’re in California, the local rules will be different from what I deal with in Maryland, but the same lesson applies: understand the property first, then build the plan around it.
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Diana, this is really helpful, especially your point about issues coming up after money has already been spent on plans. I’m curious, when you’ve seen that happen, why do you think those issues weren’t caught earlier? What usually causes that disconnect?
- Member since 2026 · 32 posts · 4 votes1mo
Zoning and entitlements are the worst. Every jurisdiction has different rules. Neighbor opposition can derail months of work. It's not just time, it's uncertainty. A land use attorney is a must
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks Xavier, your point about uncertainty stood out to me. When you bring in a land use attorney early, how much of that uncertainty can actually be figured out upfront? Are there still things you just can’t know until you’re further into the entitlement process?
- Developer · San Antonio · Member since 2016 · 157 posts · 85 votes1mo
I'm a civil and completed projects in 30+ cities, and it the aspect of navigating entitlements & permitting, because in each location can have a wide range of jurisdictions that require approvals. In some you may need City, County, State, multiple Utility Providers, etc, and it can be a web to handle different submittal requirements to each and run the process in the necessary approval steps. Also, before someone wants to pull the trigger on the project, the goal is to understand that full process, and timeline, which can be difficult to map out with entities that are either unresponsive or lacking in their standards, etc.
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks Jamie, this is really helpful, especially coming from someone who’s worked across so many different cities. When you’re trying to understand that full process and timeline before moving forward with a project, how do you actually go about figuring it all out? Is there a process or set of resources you rely on, or does it mostly come down to contacting each entity and piecing it together?
- Investor · Pacific Northwest · Member since 2026 · 538 posts · 309 votes1mo
The part that gets unnecessarily complicated is usually not any single approval — it’s the dependency chain between all of them.
Entitlements, utilities, civil, environmental, access, financing, design, jurisdictional comments, contractor assumptions — each one can be manageable by itself. The headache starts when one changes and nobody has a clean view of what that change does to everything downstream.
That’s why I’d treat predevelopment less like a checklist and more like a live dependency map: what is required, who owns it, what it blocks, what it costs, what can run in parallel, and what happens if the assumption changes.
A lot of “slow development” is really unresolved dependencies being discovered too late.
If you ever want to compare notes on how we structure that layer, feel free to reach out.
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks Michael, this is really helpful. I’m curious about the dependency map you mentioned. Is that something you actually use on your projects? I’d love to hear more about how it works in practice.
- 1moDivin KanyamaBusiness MemberAccountant · Seattle, WA · Member since 2025 · 470 posts · 190 votes
@Zemam Beyene , You’re absolutely right—the work before construction can be harder to predict than the build itself. For us, the biggest headache is not one permit; it’s coordinating land use, design, utilities, civil, financing, and contractor pricing while each party works on a different timeline.
In Seattle, that coordination risk is especially noticeable. SDCI reviews often involve several teams and multiple correction cycles, and projects can also depend on Master Use Permits, design review, drainage, side-sewer, tree, or environmentally critical area requirements. The city has been working on faster and more parallel reviews, but schedule uncertainty still affects carrying costs, financing, and whether a project remains feasible.
The most preventable delay is usually an incomplete early investigation or a slow response to corrections. A strong feasibility review before closing—zoning, utilities, survey, geotechnical conditions, trees, drainage, and likely entitlement path—can save months and protect the budget.
I’d be curious whether others find agency coordination, utility approvals, correction cycles, or financing timelines to be the biggest bottleneck in their market.
- Los Angeles, CA · Member since 2026 · 10 posts · 1 vote1mo
Thanks @Divin Kanyama, this is really helpful. I noticed you’re an accountant, so I’m actually curious where you tend to come into the development process. Are you usually working with developers during feasibility and financing, or do you stay involved throughout the project?
- 1moDivin KanyamaBusiness MemberAccountant · Seattle, WA · Member since 2025 · 470 posts · 190 votes
Thanks, @Zemam Beyene . You’re right—the work that happens before construction starts can be just as complicated as the build itself. In my experience as both a CPA and a real estate investor, the biggest challenge is rarely one single issue. It’s getting the permitting, financing, tax structure, and construction budget to work together while the timeline and assumptions keep changing.
I like to get involved during feasibility and financing, while there’s still time to test the numbers, think through the ownership structure, and understand the tax impact. From there, I’ll usually stay involved through construction and stabilization, keeping an eye on job costs, draws, cash flow, and how delays or scope changes affect the overall deal.
I’ve seen this in my own value-add investments. A project can look great on paper, but the numbers can change quickly when renovation costs come in higher than expected, financing runs longer, or the exit gets pushed back. That’s why I try to build in realistic contingencies and think through the refinance, hold, or sale strategy before committing capital.
So I see my role as more than coming in at tax time. I’m most helpful when I can be part of the conversation from the early underwriting stage through stabilization or exit. From the construction side, what pre-construction issue have you found tends to create the biggest ripple effect once the work begins?
- Woodland Hills, Los Angeles County · Member since 2026 · 17 posts · 3 votes1w
Zemam, the big-picture items are covered above, so here's the small-project version. On LA infill, lot splits and ADU builds, the things that surprise people usually aren't the zoning itself. They're the items that only show up once the city or utilities actually review the plans:
- Utility capacity. Power service upgrades, transformer or pole work, and new water meters can have long lead times and real costs. Ask the utility early whether the existing service can support what you're adding.
- Sewer. Whether the lateral and the main can take additional units, and whether the existing connection is even in usable shape, is something you want answered before you close on the land, not after.
- Fire access and hydrants. Street width, hose-pull distance and fire flow can limit what you can build or force sprinklers and other upgrades, especially on hillside lots.
- Street improvements and dedications. On some lots the city will require sidewalk, curb or right-of-way work as a condition of the permit, and that can change the math on a small project.
- Protected trees, soils and geology. A tree survey or a soils/geology report can add months, particularly on slopes.
- Plan check correction cycles. Each round of corrections adds weeks. Experienced designers who know a given jurisdiction's checklist save more time than almost anything else.
My rule of thumb is to treat everything before permit issuance as its own phase with its own budget and timeline, and to assume it takes longer than whatever anyone tells you. For anything tax-related on the development side, a California CPA who works with builders is worth bringing in early.
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