Growing Together: Utilizing Live-Work to Enhance Our Communities

Community and Economic Development – Blog by UNC School of Government

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Growing Together: Utilizing Live-Work to Enhance Our Communities

By CED Guest Author

Published May 18, 2021

Prior to suburban flight, living in urban centers was commonplace, and business owners often lived in their commercial properties. Commonly referred to as live-work units, architect Thomas Dolan defines live-work as “a building, unit, or compound in which residential and work activities are pursued on that same property by most, if not all of the same people.” Over the course of the 21^st century, interest in urban living has renewed, and technology has enhanced the level of work flexibility and telecommuting. While the number of people working from home at least occasionally has been growing, recent impacts by the COVID-19 pandemic are accelerating the telecommuting trend. Many people are increasingly working from home to conduct work on behalf of companies while others are employing the live-work model to manage their own businesses across a variety of services including software development, art, and hospitality.

To accommodate the needs of the growing telecommuting cohort, multifamily developers have increasingly incorporated coworking amenities into their projects. The Van Alen, a new multifamily building in Durham, includes a cyber café, conference rooms, and various forms of open seating in its amenity package. Likewise, Blu on Farrington, another recent multifamily development located in Chapel Hill, includes amenities desirable to remote workers including common social areas with ample open seating, private work booths, and a coffee bar. These amenities allow telecommuting residents to remain productive outside of their home without purchasing a coworking membership.

Additionally, business owners can realize significant benefits by consolidating a home and office into a live-work space, with the most important benefit being cost savings. Business owners can save money on the cost of rent, insurance, and utilities for an additional office space, eliminate time and money spent on commuting to work, and also realize tax deductions on expenses related to a home office. In Durham, the Golden Belt Lofts began leasing live-work units at rental rates as low as $875 per month. According to Startup Savant, the minimum monthly cost for a hot desk during regular businesses hours at a co-working office in Durham is $199. Alternatively, an artist can rent a shared studio for $350 per month at Cecy’s Gallery in Durham. In the example of Golden Belt Lofts, occupying a live-work unit can save over 18% on rent expenses alone for startups, small businesses, and artists.

Beyond the benefit of cost savings, live-work inhabitants often benefit from a customer base within arm’s reach. The Spark Apartments in Indianapolis includes 11 live-work units, occupied by a salon, law firm, children’s apparel store, and additional businesses, with prominent street frontage. Similarly, Camden Lamar Heights in Austin contains live-work spaces below 282 units of multifamily residences. All neighbors within and adjacent to the property are potential customers in addition to the trade market that a typical retail store would attract.

Peekskill, a town in New York State, used live-work spaces to revitalize its diminishing downtown. After creating a rezoned Artist’s District, the town developed a 28-unit cooperative of artist lofts explicitly targeting certified artists at affordable prices. The successful project enhanced the community’s vibrancy and led to further development, including a new mixed-income housing development of artist lofts and commercial spaces housing local businesses. The development includes extensive amenities and different spaces to showcase resident sculptures, artwork, and performances. Using live-work spaces to welcome artists and small businesses led to a revitalized downtown known for its vibrant artist community. Additional examples of live-work development, such as Mission Lofts in Washington D.C. and the Tipsy Pig in Nashville, show that live-work units can be employed in a variety of formats and scales.

Many municipalities have single-use zones and districts that don’t have ordinances designed to address live-work units, which can become prohibitive for potential business owners. In West Dallas, the lack of zoning code permitting live-work developments disincentivized investment despite promise for revitalization. Local governments can use zoning laws to define live-work units beyond standard residential and commercial classifications to reduce barriers to entry. After requests from property owners to adjust industrially zoned districts to mixed-use, the Zoning Ordinance Advisory Committee of Dallas supported a zoning alteration for the use of “live units” in many non-residential districts.

Rezoning to allow live-work units has been a tool used by municipalities to improve housing conditions. In San Diego, eased zoning regulations were proposed to increase the city’s housing supply and improve housing affordability for residents. San Diego’s director of land use and economic development suggested that the prospective rezoning could be catalytic in revitalizing neighborhoods. While the proposal would cause critical improvements in San Diego’s housing conditions, the change would also be expected to reduce car travel, helping the city move further toward its goal to diminish the negative impacts of pollution on climate change. With the help of the UNC DFI (Development Finance Initiative), the City of Kinston, NC established a live-work overlay zoning district in the historic Mitchelltown neighborhood, facilitating an artist-led community revitalization wave in a residential area adjacent to its downtown experiencing high vacancy, disinvestment, and a preponderance of distressed housing.

What can municipalities do to support and encourage increases in telecommuting and live-work residents beyond zoning? With residents spending more time in the local area, improvements can be made to enhance pedestrian transit. Such improvements can include improving sidewalk connectivity, reducing traffic speeds, adding bike lanes, increasing public transit services such as buses, and adding green space to sidewalks. Additionally, improving internet infrastructure through fiber-optic cable installation will be critical to supply residents high-speed internet access despite increased usage. These improvements would enhance connectivity, benefit local businesses, and encourage telecommuters to stretch their legs and explore the neighborhood.

Municipalities are in a unique position to address social developments and leverage their resources to pursue their desired future. Local governments have the opportunity to review zoning ordinances and infrastructure programs to ensure shifting land-use trends are adequately accommodated for long-term community benefit. While municipalities have varying built environments and economic conditions, work from home and live-work units can be flexibly employed to meet the current and future needs of a town and contribute to an increasingly thriving community.

This post was co-authored by David Singer and Matt Crook. David Singer is a recent graduate of the UNC Kenan-Flagler Master of Business Administration program and former DFI Community Revitalization Fellow. Matt Crook is a Project Manager with the Development Finance Initiative.