By-Right vs Special Exception

Actionable guidance for by-right vs special exception in Washington, DC. Learn the local rules, budgets, timelines — and how to finance it intelligently.

Last updated: 2025-09-25

Overview

By-Right vs Special Exception in DC requires careful attention to local rules, neighborhood context, and permitting. Align your scope and budget with realistic timelines to protect IRR.

Why It Matters in DC

Washington, DC’s historic fabric, rowhome typologies, zoning overlays, and ANC engagement shape every by-right vs special exception decision. Understanding these nuances reduces risk and cost overruns.

Regulations and Permitting

• Check zoning (R, RF, RA, MU) and overlays early.
• Confirm if historic review (HPRB) applies; adjust design accordingly.
• Use licensed pros for plans; submit complete, code-compliant sets.
• Plan inspections and hold points to align with draw requests.

Costs and Budget

Build a bottoms-up budget: labor, materials, soft costs, financing, contingency (10–15%). Validate against comps and your target exit or DSCR thresholds.

Timeline and Milestones

1. Due diligence and feasibility
2. Planning and permitting
3. Mobilization and demo
4. Rough-in, inspections, close-in
5. Finishes, punch, C of O or rent-up

Pro Tips

• Lock scope early; control changes with written approvals.
• Release draws against documented progress and lien waivers.
• Track critical path items (lead times, inspections, utility taps).
• Align financing terms with realistic schedule and exit.

Common Pitfalls

• Underestimating historic constraints and review durations.
• Thin contingency in a volatile materials market.
• Poor documentation for change orders and draws.
• Weak comp set or appraisal prep.

Checklist

• Verified zoning, overlays, and historic status
• Complete plans and code references
• Line-item budget with contingency
• Draw schedule and inspection plan
• Exit comps or DSCR underwriting

Financing Options

Consider hard money for speed, DSCR for stabilized rentals, and construction loans for larger scopes. Match leverage, draws, and reserves to your development strategy.

FAQs

Related Guides

• DC Fix and Flip 101
• Finding Distressed Properties in DC
• Running Comps and ARV in DC
• Scope of Work Templates
• Permitting with DC DCRA (DOB)
• Historic District Rules (HPRB)