NEW YORK CITY-They say all politics is local--and that same adage goes for local zoning, too. With power constantly changing hands, frequent legislation turnovers and late-night city council meetings, it can be easy to miss an ordinance revision or rezoning decision that could affect property owners and land values. For much of the commercial real estate community, it’s still difficult to decode. “It is hard to speak in broad strokes because it such a dynamic and moving field,” commented Dan Kleiman, of Zurich North America Commercial.

Yet Kleiman, as Zurich’s head of real estate for North America, knows what to do and what not to do when it comes to the municipal zoning process. “Everyone is affected by it, and there are a number of different driving factors,” Kleiman said. He and his fellow panelists during Thursday’s “Decoding Local Laws: How changes in local laws can lead to increased real estate exposures” webinar discussed the ins-and-outs of local legaleze from a variety of perspectives, including owner/developer, governing bodies, tenants and lenders.

In navigating this regulatory jungle, panelists conceded that zoning changes may affect property values in several ways, especially if a municipality decides to landmark, change the use of or downzone the property, which could potentially impact maturing debt or completely damage the deal. As an example, Wayne Caplan, director of investment and development at Sperry Van Ness, who specializes in the sale and lease of commercial properties throughout Chicago, said he represented a mixed-use property that was downzoned in the middle of a transaction. In turn, the zoning change dramatically affected the size and scope of the planned project, resulting in a 40% decrease of the land’s total value. “It kills the deal,” Caplan said. “It causes you to have less buildable value, and that’s a problem.”