Land Usage and Property Types
- Craig Kaiser
- Feb 7
- 6 min read
Real estate terms can be confusing, with assumptions that everyone understands their meaning. However, this is not always the case. While some terms may sound straightforward, there can be hidden complexities behind them. Understanding land use is crucial for land buyers, sellers, and owners. This guide provides definitions, highlights the importance of land use, and discusses common types of property.
Key Takeaways:
Understanding Land Use: Essential for buyers, sellers, and owners to ensure land can be used for intended purposes.
Types of Land:
Vacant Land: Unimproved real estate, potential for development.
Undeveloped Land: No improvements, remains in natural state.
Real Estate: Land with improvements, including natural resources.
Land Use Categories:
Agricultural: Cropland and pasture land for food production.
Recreational: Used for leisure, including parks and hunting land.
Commercial: Designated for business activities, vital for the local economy.
Residential: Zoned for housing, subject to zoning restrictions.
Mixed Use: Combines different land uses, often commercial and residential.
Transport: Designated for transportation infrastructure.
Urban: Used for economic and community development.
Determining Land Use: Factors include zoning, climate, and topography. LandApp's property report aids in assessing land suitability and land features.
What is Land Usage?
According to the U.S. Environmental Protection Agency, "land usage" describes the human use of land. It’s the intent people apply to the land available to them. More specifically, land usage is the characterization of actions people apply to land for various purposes. This is often dictated by the natural resources the land provides and historical use along with whether the land is public or private.
Land usage is important because for buying land because it's crucial to ensure that you can use it for your intended purpose. The "perfect" property may not be suitable once you determine its land use. Whether you want to build a house or engage in agriculture, make sure that the properties of interest are zoned and designated accordingly.
What are the Main Types of Land Use?
The four main types of land use are agricultural, residential, commercial, and industrial. Additional types of land use include transport, recreational, urban, and mixed-use.
1) Agricultural Land Use
Producing crops and raising livestock is one of the oldest forms of land use. Agricultural land is land devoted to the controlled use of any form of life to produce food for people and is often referred to as cropland or farmland. With more than 900 million acres of land, agricultural land makes up approximately 40% of the total land area in the United States, as reported by the USDA's Census of Agriculture.
Types of Agricultural Land Use
Agricultural land is divided into three major categories: cultivable land, pasture land, and land under permanent crops.
Cropland: Cultivable land, also known as cropland, is dedicated to the production of various crops such as corn, soybeans, and wheat. It serves as the foundation for the agricultural industry, providing the essential resources for food production and sustaining the nation's economy.
Pasture Land: Pasture land is primarily used for cattle grazing. It offers rich grasses and vegetation, creating an ideal environment for livestock such as cattle, sheep, and horses to graze and thrive. This not only supports the livestock industry but also contributes to the production of high-quality meat and dairy products.
Land Under Permanent Crops: Land under permanent crops refers to agricultural land that is used to grow crops that do not require replanting after each harvest, like fruits and nuts. These crops are typically perennial, meaning they grow and produce yields over multiple years without the need for annual sowing.
2) Residential Land Use
Residential land refers to property that already has a residence or is suitable for building one. It is typically zoned for primary housing and is sought after by individuals who wish to build their own homes. Residential land values fluctuate based on location and various factors. For example, residential beachfront land is often much pricier compared to similar-sized lots located a few miles inland.
It is important to mention that there are often restrictions associated with residential land use. Zoning restrictions for residential land use vary from one city or state to another. These restrictions can include the types of materials that can be used to build, the overall size and height of the residence, and the type of animals allowed (if any are permitted).
3) Commercial Land Use
Commercial land refers to property designated for business activity or commerce, aimed at generating income. It plays a vital role in city land use planning and contributes to the overall health of the local economy. Commercially designated land is appraised differently, with varying values. Even if not zoned as commercial, it can still be valuable if in the path of economic growth. For example, commercial property is often leased for rental income.
Types of Commercial Properties
Commercial land use and the types commercial real estate includes offices, retail stores, multi-family, and hotels.
Offices: Office buildings are typically classified as either urban or suburban. Urban office buildings are located in cities and often include skyscrapers and high-rises, with some spanning several million square feet. In contrast, suburban office buildings are generally smaller and are often situated within office parks.
Retail Stores: Retail refers to commercial spaces that house the retailers and restaurants we visit regularly. These spaces can either be multi-tenant, often featuring an anchor tenant that attracts foot traffic to the property, or single-use standalone buildings.
Multi-family: When a single entity owns five or more residential units, they are classified as commercial real estate. The multifamily sector encompasses all residential properties beyond single-family homes, such as apartments, condos, co-ops, and townhomes. Similar to office buildings, multifamily properties are typically categorized into Class A, Class B, and Class C.
Hotels: The hotel sector includes establishments that offer accommodations, meals, and various services for travelers and tourists. Hotels can be either independent (boutique) or part of a major chain, known as flagged hotels.
4) Industrial Land Use
Industrial land use refers to the allocation of land for activities related to manufacturing, production, storage, distribution, and other industrial operations. This type of land use is typically designated in urban planning and zoning to accommodate industries that require specific infrastructure, such as factories, warehouses, power plants, and research facilities.
5) Transport Land Use
Transport land is real estate that is designated to the moving or transportation of people and goods from one place to another. The majority of transport land, which is owned by government entities like the city, requires extensive land use planning. This involves careful coordination and may even necessitate the involvement of land use consultants.
Their expertise is invaluable for maintaining, upgrading, or even developing new transportation land to ensure efficient and effective transportation systems for the community. Transport land use includes airports, roads, subways, and trains.
6) Recreational Land Use
Recreational land use is property used for personal enjoyment. This could be privately owned land or property owned by a government entity. It could include anything from city parks and open spaces to national parks and large tracts of hunting land. Some examples of recreational land use include ranching and hunting, along with camping and fishing.
7) Urban Land Use
Urban land use refers to the way land is utilized in urban areas, such as cities and towns, to accommodate various human activities and needs. It involves the planning and organization of land for residential, commercial, industrial, recreational, and other purposes within densely populated areas. Urban land use is a critical aspect of urban planning and development, ensuring that land is allocated efficiently to support the needs of the population while maintaining functionality and sustainability.
8) Mixed Land Use
Mixed land use refers to the combination of different types of land uses on a single property. While it can include various types, the most prevalent form involves a blend of commercial and residential land use. For example, a property with mixed uses could include a ranch that has both a home and farmland.
How to Determine the Best Use for Land
Many qualities contribute to how the land can be used. Zoning, easements, climate, topography, and biology are a few. Fortunately, there’s land for sale out there for whatever you’d like to do. Understanding land use policies and property types is a piece of the puzzle to help set you up for success in your search.
LandApp's property report can provide landowners and real estate professionals who own or are selling land with data to help determine its suitability for different potential use cases. This data can be used to market their property effectively for the most value. Get a free Property Report by finding your parcel on LandApp's nationwide map today: