Which statement is true regarding zoning changes and their impact on property value?

Zoning changes can significantly influence property values, and one of the key aspects is that increased zoning, often referred to as a more permissive zoning classification, typically raises property values. When a locality allows for greater density or a broader range of permitted uses, it can attract development interest and investment, thus enhancing the potential income from the property. This can lead to increased demand from buyers and investors, who often see opportunities for higher returns due to the expanded uses allowed under the new zoning regulations.

For example, if an area that was previously zoned for single-family homes is changed to allow multi-family dwellings or commercial activities, it can lead to an increase in property value as developers may find it more lucrative to invest in that area. More options for property use create more avenues for revenue generation, which is appealing to both current property owners and potential buyers looking for investment opportunities. As a result, properties in areas with favorable zoning changes become more desirable, driving up their market value.