Definition of a live-work unit

by Peg and Jack

Visitor Question: I was listening to planning and zoning the other night. One of the board members was arguing that live-work units would be a good thing at the edge of our downtown. There's a side street there that isn't exactly visible but it's just a few steps off the major street. I don't understand what a live-work unit means and what it implies for our tax structure or zoning. We live nearby, and I need to understand this.

Editors' Reply:

Live-work unit simply is a contemporary way of referring to a building that is both the residence and place of business of the proprietor. We're using the old-fashioned word proprietor on purpose, because historically in the U.S. and many other parts of the world, business owners lived "above the store."

Certainly the live-work unit doesn't have to be organized in that same way, namely, an apartment on the second story above a storefront or walk-in office.

However, it's still a common sense approach to living and working in the same building, and an historically accurate American vernacular architecture form.

These comments do point up that it may be challenging to retrofit buildings that never were used as combined commercial and residential into live-work units, although it's not impossible.

Whether new or renovated, design issues include making the storefront feel secure from break-in, while still being inviting enough that if desired for the particular business, people will walk in without an appointment. Obvious security systems will help with this issue. Secondary security at the top of the stairs may be highly desirable as well, depending on whether the location is in a major city or a neighborhood that attracts some crime.

A secondary building code issue to work out with the municipality is which codes pertain to the building. For example, a single residence usually doesn't require a fire sprinkler system, but a business may well.

The live-work arrangement also implies that the city government has to wrestle with questions about which sign, noise, and parking requirements apply--residential or commercial.

Must there be a way to enter the residence without going through the business, and vice versa? Must the business and the housing unit be able to be locked off from one another? Are firewalls between the residential and commercial parts of the unit required?

As for the tax structure, that will vary based on state law. Your town should talk with the local assessor about their interpretation of how state law would impact the assessment of the building.

With any luck, the assessor will feel comfortable legally in simply assessing the percentage of building square footage used residentially at the residential rate, with the percentage of commercial use at the commercial rate. This implies that the real estate tax rate in your locale is different for residential and commercial land uses. This common arrangement in the U.S. may not pertain to your situation.

Even if commercial and residential properties are assessed at the same rate, it would be logical to think that the value of the building would be higher if part of it is situated as a business, with commercial-grade systems. This means that the tax base would be higher, which is an excellent outcome for the city government and all the districts and governmental services that depend on real estate property tax for all or part of their revenue stream.

Next you ask about zoning implications. It's true that many traditional zoning ordinances that have changed very little since the model codes of the 1920s would have a hard time coping with a vertical mixed use, or any mixed use within a building.

However, if your town has a mixed-use district, it's relatively easy to regulate the live-work units as a permitted use within that district, with any clarifying regulations that need to be spelled out included in the district regulations.

If you haven't taken the important step of encouraging mixed-use development through creating a district that anticipates and allows for the differences between single-use and mixed-use buildings and complexes, now would be a perfect time to make that broader change. Then plugging in live-work units would be a minor part of your zoning ordinance update.

This may be unnecessary for someone who sat through a planning and zoning commission meeting on the subject, but we'll just allude to the advantages of mixed-use development in general and live-work units in particular.

Obviously you'll delete an entire commute from your transportation sytem, or maybe two if family members both work in the business.

Secondly, you've animated your business district with some life after 5 p.m., and provided walking traffic to nearby restaurants and entertainment venues that may be located in your downtown. Those are some major advantages in reducing energy usage, traffic congestion, and urban sprawl.

Since you say that you live nearby, of course you'll be personally interested in assuring that all of the possible implications of having a commercial space edging closer to you are taken into account.

If you and your town are worried about the live-work unit impact, try limiting the number of live-work units that can be within a certain area. This could be done either by limiting the size of the zoning district in which they are being permitted to the first time to perhaps one block.

If that's too much, then only corner lots within the district could include one live-work unit. If you wish, limit the maximum number of square feet of the entire unit, and then the percentage of the unit that may be occupied by the commercial use.

Live-work units are especially suited to insurance and financial offices, artists, boutiques, small antique shops, dance studios, personal trainers, and consultants of various types. Any business that is low-key in terms of its impacts on neighbors, but which needs more space than a converted bedroom in a house, is a candidate for a live-work unit.

Of course local governments can feel free to create a limited palette of uses that would be allowed in the particular live-work unit situation. A cautious incremental approach isn't wrong when you go about changing zoning. However, based on what you describe, the area would be a transitional zone from downtown to residential, so any business in the previous paragraph should fit.

Your primary concern should be parking and traffic. If allowing a number of live-work units, shared parking arrangements should be permissible.

We haven't heard of this, but a viable way to fine-tune the business uses that may be permitted in your live-work units may be that only businesses operating on an appointment basis can be located in the zoning district that you modify or set up to allow for this type of arrangement. This will limit the traffic and parking implications.

Then if you have a larger live-work district, such as an entire city block or several blocks, you could drop the appointment aspect of the business so that you accommodate specialty retail and other businesses that need walk-in traffic.

If elected officials remain skittish about change even after thinking about the advantages of mixed-use development of this type, we recommend that the residence be required to be occupied by the business owner. This will almost guarantee that the neighborhood will function almost as quietly as any residential neighborhood.

If this is a new infill development at the edge of your downtown that's being discussed, be aware that live-work units are staples in new urbanism, which is a mostly positive influence on many real estate developments now.

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