Large acreage often gets described as having “development potential,” but those two things are not necessarily the same. Before a property can be marketed to developers at a premium, there are a number of practical and regulatory questions that need to be answered.
In Riverside County, subdivision and development can involve much more than simply having enough acreage. Zoning and the General Plan designation have to support the proposed density and parcel sizes, and many additional issues can affect whether a subdivision is actually feasible.
Access can be a major factor. If a property fronts a state highway, proposed access changes or increased development impacts may involve additional review. Driveways, drainage, grading, utilities and impacts to the roadway can all come into play.
Mountain properties can bring even more questions: fire apparatus access, road width and grade, turnarounds, all-weather surfaces, water supply, drainage, topography and emergency access.
Where sewer is unavailable, septic feasibility matters too. A proposed subdivision may need to demonstrate that the individual lots can support wastewater systems and that adequate water is available.
There may also be private easements, recorded restrictions, utility limitations, environmental concerns or other conditions that affect what can realistically be built.
And this is where sellers need to be careful.
Just as I would not market a residential property as having a new roof, permitted addition or functioning septic system without evidence to support that representation, I would not market land as having meaningful development potential simply because someone believes it does.
If a seller wants a buyer to pay a premium based on subdivision or development potential, the seller should be prepared to support the qualifying factors behind that claim. Depending on the property, that might mean zoning research, title and easement review, preliminary planning consultation, access analysis, septic or water feasibility, surveys, engineering or other professional investigation.
None of that means a property cannot be developed. It means the feasibility has to be established.
And sometimes, after engineering, entitlement, road improvements, fire-access requirements, utilities, septic systems and other infrastructure are considered, a technically possible project may simply become cost prohibitive.
That is why I think sellers are better served by distinguishing between acreage and demonstrated development potential. They are not the same thing.
Development potential has value when the facts support it.
