Real Estate 306 Exam 2 Questions and
Answers
Police Power
✓ ~~~ right of government to enact laws to protect the general health, welfare, and safety
of public
Federal Reserve
✓ ~~~ sets a target range to keep healthy level of unemployment and inflation to avoid
swings in the economy
Federal Funds Rate (FFR)
✓ ~~~ - The average rate that banks pay when borrowing from each other overnight.
- influences interest rates that banks charge including debt on real estate
✓ ~~~ - one time fee charged to new developer by municipality to offset cost of increased
city resources needed as result of additional developments (in theory)
- can be used for pet projects, policy priorities, or knowingly/unknowingly to restrict
growth.
eminent domain
✓ ~~~ Power of a government to take private property for public use with compensation
(amendment 5)
,Regional Plans
✓ ~~~ - created by the state, county, or regional authority
- Include major transit and natural resources
- Do not usually impact individual buildings
Comprehensive Plans
✓ ~~~ - Created by a municipality and enforced by municipal ordinances
- Produced through public meetings, data analysis, and politics
- Include growth priority areas, future use plan, types of uses, transportation goals
Neighborhood plans
✓ ~~~ - Must comply or be incorporated into the municipality's comp plan
- Produced with the help of professionals through neighborhood involvement and
public meetings
- Typically driven by neighborhood associations resistant to significant change
zoning
✓ ~~~ - specific rules for each. land parcel as described in the Zoning Code or Municipal
Ordinance
- reflects priorities identified in the Comp Plan
- allowable uses and site requirements
building codes
, ✓ ~~~ - regulate a building's physical structure
- address issues of health and safety
Floor Area Ratio (FAR)
✓ ~~~ The density of nonresidential land use, exclusive of structured parking, measured as
the total nonresidential building floor area divided by the total buildable land area
available for nonresidential structures.
entitlements
✓ ~~~ A set of approvals needed for the right to develop a piece of land.
Role of Government
✓ ~~~ 1. to pay for/provide all things we can't do individually (military, roads, schools,
utilities)
2. Manage economy (jobs & inflation, Fed Reserve)
7. Inspections (building inspection + review services for all construction)
Planning
✓ ~~~ process of developing plans and programs for use of land within a community
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