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Local government plays a crucial role in real estate development primarily through the regulation of land use, which is achieved via zoning laws and permits. Zoning laws determine how land can be used — distinguishing areas for residential, commercial, industrial, or mixed-use purposes. This regulation ensures that development is consistent with community goals and public health and safety standards.

By establishing specific zoning requirements, local governments control factors such as the height and density of buildings, the types of businesses that can operate in certain areas, and the overall character of neighborhoods. Developers must obtain permits to ensure that their projects comply with these zoning regulations, which helps manage growth and maintain the quality of life for residents.

This approach not only protects the interests of the community but also provides a framework within which developers can plan their projects, allowing for coordinated development that fits the municipality's long-term vision. Therefore, the role of local government in regulating land use is fundamental to shaping the development landscape in a way that balances economic growth with community needs.