Considerations for Live-Work Space

by Zimmerman Volk

“Live-work” is a unit or building type that has been designed to accommodate non-residential
uses in addition to, or combined with living quarters. Live-work units are commonly
proposed in new traditional neighborhoods or new town centers, particularly as a transition
from residential to commercial areas or as a means of introducing small-scale retail.
The growing number of home-based businesses in the United States (reported in 1997 as four
million) is often cited as a justification for live-work. However, there is an important
distinction between a “home-based business” and a “business-based home.” Most home-based
businesses can be accommodated in almost any kind of dwelling unit. In contrast, the
business-based home is a true live-work unit: a dwelling unit with a configuration that is
influenced or even dictated by the non-residential activities.
Four live-work development considerations:

1. Flexibility
Live-work units should be flexible in order to respond to economic, social and technological
changes over time. The unit configuration must also be flexible in order to comply with the
requirements of the Fair Housing Amendments Act and the Americans with Disabilities Act.

2. Non-restrictive zoning
Compatible uses (retail, office, residential) should be permitted on blocks in and surrounding
the neighborhood center, regardless of unit configuration.

3. Tenure
Rental live-work units are absorbed faster than for-sale. The financial commitment of a lease
is small and of relatively short duration compared with a mortgage. A for-sale live-work unit
represents an opportunity for the small investor: a resident investor can lease the flex space for
residential, retail or office use; a non-resident investor can lease both the main residential space
and the flex space.

4. Timing
Live-work is not exempt from normal commercial real estate dynamics. In new
neighborhoods, live-work should be one of the later building types to be introduced, not the
first. It is easier to capture the full value and appeal of live-work units in locations where the
benefits of traditional neighborhoods are readily apparent.