Fiscal Note

Each piece of legislation that appropriates funds, creates position authority, or will create a financial impact through policy direction or otherwise, requires a fiscal note.  The fiscal note should be drafted by department staff and should include all relevant financial information.  After preparation by departmental staff, the Department of Finance will review and make necessary revisions before transmittal to Council. 

 

Department:

Contact Person/Phone:

DOF Analyst/Phone:

DCLU

Mark Troxel

Stephen Land /  684-7920

 

Legislation Title:

AN ORDINANCE relating to live-work units, authorizing live-work units, establishing development standards for live-work units that are located at street level in Commercial and Neighborhood Commercial zones, correcting minor errors, and amending SMC Sections 23.42.106, 23.46.004, 23.46.006, 23.46.012, 23.47.004, 23.47.024, 23.47.032, 23.47.036, 23.47.042, 23.48.016, 23.49.008, 23.49.011, 23.49.016, 23.49.026, 23.49.146, 23.50.012, 23.53.005, 23.53.015, 23.53.025, 23.53.030, 23.54.015, 23.55.028, 23.71.038, 23.73.010, 23.84.004, 23.84.024, 23.90.006, 25.06.110, and 25.06.130.

 

Summary of the Legislation:

The attached  will amend the Land Use Code to define "live-work unit" and establish appropriate development standards.  Facilitating development of live-work units will encourage a greater variety of housing types in Seattle, and will also broaden the types of uses allowed at the street-level in certain commercially zoned areas.  The proposed amendments establish development standards for this unique hybrid use.  The standards will also help to maintain the limited supply of commercially zoned land by requiring that the spaces be designed for easy conversion to more traditional retail and commercial uses should demand for such spaces increase.  Allowing live-work at street level in appropriate downtown and commercially zoned areas will increase opportunities for mixed use development, meeting Seattle's growth management and quality-of-life objectives. 

 

This ordinance does not have financial implications.

 

Appropriations (in $1,000’s):

Fund Name and Number

Department

Budget Control Level*

2003

Appropriation

2004 Anticipated Appropriation

 

 

 

 

 

TOTAL

 

 

0

0

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

 

Expenditures (in $1,000’s):

Fund Name and Number

Department

Budget Control Level*

2003

Expenditures

2004 Anticipated Expenditures

 

 

 

 

 

TOTAL

 

 

0

0

* This is line of business for operating budgets, and program or project for capital improvements


Anticipated Revenue/Reimbursement (in $1,000’s):

Fund Name and Number

Department

Revenue Source

2003

Revenue

2004

Revenue

 

 

 

 

 

TOTAL

 

 

0

0

 

Notes: 

Total Permanent Positions Created Or Abrogated Through Legislation, Including FTE Impact; Estimated FTE Impact for Temporary Positions:

Fund Name and Number

Department

Position Title*

2003 FTE

2004 FTE

 

 

 

 

 

TOTAL

 

 

0

0

* List each position separately

Do positions sunset in the future?  (If yes, identify sunset date):

 

 

Background  (Include brief description which states the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Please see attached Director’s Report and Recommendation dated January 15, 2003.

 

The financial cost of not implementing the legislation  (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented):

 

 

Possible alternatives to the legislation which could achieve the same or similar objectives  (Include any potential alternatives to the proposed legislation, including using an existing facility to fulfill the uses envisioned by the proposed project, adding components to or subtracting components from the total proposed project, contracting with an outside organization to provide the services the proposed project would fill, or other alternatives):

 

 

Is the legislation subject to public hearing requirements (If yes, what public hearings have been held to date):

 

 

Other Issues (including long-term implications of the legislation):

 

 

Attachment:  Director’s Report and Recommendation

Director’s Report and Recommendation

Live-work Amendments

 

 

Summary of Recommendations

 

Land Use Code changes to facilitate live-work units will encourage a greater variety of housing types in Seattle, and will also broaden the types of uses allowed at the street-level in certain commercially zoned areas.  The proposed amendments define a live-work unit and establish development standards to help create resulting street-level spaces that will be a positive contribution to the pedestrian environment, particularly in active neighborhood business districts and Downtown.  The standards will also help to maintain the limited supply of commercially zoned land by requiring that the spaces be designed for easy conversion to more traditional retail and commercial uses should demand for that space arise.  Allowing live-work at street level in appropriate downtown and commercially zoned areas will increase opportunities for mixed use development, meeting Seattle's growth management and quality-of-life objectives.

 

The main elements of the proposal are to

 

 

 

Background

 

Live-work space is not a new idea.  A century ago, living in a dwelling attached to one's business was customary in commercial areas.  Reforms of the early 1900s led to the segregation of uses into zones oriented toward a single purpose (residential, commercial, industrial, etc.) and generally sought to protect residential uses from the traffic, noise, and odor of commercial activity.  The dominant side effect of this reform has been an increased dependence on roads and vehicles.  Now that we seek to create neighborhoods where more of the essential goods and services are located closer to homes, re-examining businesses where the proprietor lives upstairs or in the back makes sense. 

 

The trend toward enabling live-work spaces in North American cities reflects several cultural phenomena.  Improved technology allows more telecommuters to work at home.  Entrepreneurs and creative professionals in new media and more traditional businesses seek ways to closely integrate life and work.  And mixed use development locates neighborhood-serving businesses closer to residential uses to their mutual benefit.

 

Seattle’s policies and codes recognize mixed use development as an important tool in meeting the growing demand for housing and jobs.  Mixed use development usually takes the form of residential and commercial uses in the same structure or on the same lot and is most commonly found in our Neighborhood Commercial zones and Downtown.

 

Seattle's supply of commercially zoned land is limited, comprising approximately 6% of the City's land area, and in 1988 the development of multifamily residential development in Commercial and Neighborhood Commercial zones appeared to be displacing favored commercial uses.  Mixed use regulations were added to neighborhood commercial zones to encourage nonresidential uses within projects containing residential uses and to limit the density of single-purpose residential structures.  Projects containing only residential uses were also subject to conditional use approval.  The concern for the potential displacement of commercial uses by residential use or the loss of commercial land for future commercial expansion was cited as the reason for limiting the density of residential uses in commercial areas. The result was a substantial increase in the number of mixed use projects located in Commercial and Neighborhood Commercial zones.  When a project successfully qualifies as mixed use, it is not subject to residential density limits and is permitted outright. 

 

But there were problems associated with the new projects, such as slow commercial absorption rates, which resulted in long initial periods of vacancy, particularly in the street-level commercial spaces.  A 1993 study[1] found that, for 51 mixed use projects completed between 1988 and 1993, the vacancy rate for their commercial space was 47% at a time when the prevailing vacancy rate for retail was 4.6% and the rate for office was 13.3%.  The City responded with Land Use Code amendments specifying minimum dimensions for street-level spaces and minimum ceiling heights, and over time our design review process has gained experience with mixed use development issues.  Over time, the better designs and the revival of the market for street-level commercial spaces reduced the vacancy rate.  Seattle's current economic down cycle has caused neighborhood business groups and mixed use developers to ask whether conditions exist for a return to the high vacancy rates of the early 1990s, based on a concern over the "urban blight" effect of too many empty storefronts.

 

Another important driver in the study of live-work has been the Seattle arts community's concern over affordable housing and workspace for artists.  In neighborhoods like Belltown, Fremont, and Pioneer Square, the influence of artists has played an instrumental role in reviving the urban environment, but the ensuing higher property values are making it more difficult for artists to live and work there. 

 

Regulations that support mixed use development currently draw a hard line between residential and nonresidential uses.  Qualifying mixed use structures are allowed outright and at substantially higher density than their solely residential counterparts.  Since the adoption of regulations governing mixed use development, primarily in the late 1980s, the concept of live-work increased in popularity.  Current regulations do not fully recognize live-work, which is a hybrid of residential and nonresidential use in the same tenant space. 

 

 

Analysis

 

The Land Use Code amendment is premised on a conclusion that live-work is a beneficial component of mixed use development that can help the City and neighborhoods achieve the following goals:

 

Seattle's Land Use Code currently allows live-work space in limited formats, classifying it either as a home occupation or as an artist's studio/dwelling.

 

"Live-work units" already on the market in Seattle are typically residential units within which home occupations are allowed.  The Land Use Code regards these as residential uses, thus live-work units are not currently allowed at street level within mixed use projects because they do not meet street-level nonresidential use standards required of mixed use development.  Other regulatory controls on live-work include the Building Code and Fire Code, which require life safety features such as exits from sleeping rooms and fire-rated walls and doors between different uses. 

 

Home occupations are subject to the following limitations:

·        must be conducted by a resident of the unit;

·        must be clearly incidental to the use of the property as a residence;

·        may not give their addresses in any advertisement except business cards;

·        may employ only one nonresident;

·        must limit commercial deliveries to one per weekday;

·        may not cause or add to parking congestion or traffic; and

(See Client Assistance Memo 236 at http://www.ci.seattle.wa.us/dclu/Publications/cam/cam236.pdf.)

 

Artist's studio/dwellings are permitted as an administrative conditional use in Commercial, Neighborhood Commercial and Industrial zones.  Conditional use criteria for artist's studio/dwellings are the following:

·        They cannot be located where environmental or safety problems exist;

·        In Industrial zones, the studio/dwelling cannot be located on freight lines or next to a freeway or highway access, or where it would restrict or disrupt industrial activity; and

(See Client Assistance Memo 114 at http://www.ci.seattle.wa.us/dclu/Publications/cam/cam114.pdf.) 

 

Live-work spaces and “artist lofts” or “artist studio dwellings” are popular in Seattle's market, and characterizing them as primarily residential uses does not appear to be hindering their proliferation.  The unmet need in the Land Use Code is flexible space that is primarily commercial in nature.  Such spaces could accommodate businesses with higher impacts than home occupations, such as daily customers, more frequent deliveries, or multiple employees. 

 

Other Cities' Live-Work Experiences.  The live-work concept means different things in different cities.  Historical land use trends and larger planning objectives influence the intended character of live-work regulations.  Boulder, Colorado, for example, sought to transform obsolete industrial buildings into housing as a step toward shifting the surrounding area toward residential uses.  In contrast, Seattle's policy objectives are to preserve its contiguous industrial areas, and where older industrial buildings have become isolated from freight lines or highway access, the economics appear to favor demolishing the older buildings and establishing new nonresidential uses in new construction.

 

In 1987, San Francisco allowed live-work units in residential areas as a way to provide housing for artists and small businesses.  The prior year, San Francisco voters had passed Proposition M, placing an annual limit on new office development.  San Francisco also requires new housing projects to provide a certain percentage of affordable units and child care, or pay a fee in lieu thereof.  The resulting artist live-work spaces were not subject to ADA accessibility requirements, were easily convertible to office uses, and were exempt from affordable housing and child care requirements.  Live-work projects proliferated, and became offices for technology start-ups and luxury housing for city and Silicon Valley professionals.  After a few years of trying to reform artist live-work regulations and the cap on new office development, citizens crafted a new petition, Proposition L, revising the controls on office uses and limiting the creation of live-work projects, by then known popularly as "lawyer lofts."  After a bitter campaign, the proposition failed with 49.8% of the vote.  A rival proposition from the Mayor and Board of Supervisors, Proposition K, which only amended office development controls, failed with only 39.2% of the vote.  The lesson for Seattle may be that live-work spaces must meet regulations for both aspects of its use – the residential and the nonresidential – because perverse incentives can have far-reaching consequences.  For example, if the intent of live-work in Seattle is to broaden the variety of housing types and create spaces that can foster new businesses without detracting from commercially zoned streetfronts, then live-work units at street level should meet street-level mixed use standards, and live-work units off the street should meet residential use standards such as open space requirements. 

 

Oakland, California, has adopted a comprehensive approach to live-work,[2] going so far as to classify several variants of the concept based on the spatial relationships of the living and working areas:  live/work, work/live, live-with, live-near, and live-nearby.  Mayor Jerry Brown's intent has been to attract 10,000 new residents to the urban core of Oakland (the 10K plan), establishing in the process an extensive, diverse live-work community in one location that meets growth needs with minimal impacts on traffic and utilities.  Oakland has amended the Oakland Building Code to codify substitute requirements and define new residential occupancies with accompanying life-safety standards.  Seattle already allows uses that correspond with Oakland definitions of live/work, live-near and live-nearby (i.e., home occupations and mixed use development).  The Seattle Building Code already accepts substitutions when it can be shown they meet the life-safety performance standards of the original requirement.  Rather than create a new chapter in the Land Use Code devoted to live-work design and construction, Seattle can leave that work to the architects and builders who see a market for more intensive and integrated live-work spaces.  Although Oakland is only three years into the 10K plan, arts advocates have already said that affordable spaces are being refurbished out of their reach,[3] and financing for larger projects has been more difficult to obtain than anticipated.[4] 

 

Lionsgate in Redmond, Washington, is not a live-work project per se, but it is a unique interpretation of mixed use development.  Rather than providing street-level retail with living units above, Lionsgate provides retail spaces only at the corners.  The remainder of the street-level spaces are small home offices with separate entrances and small display windows.  The project contributes little to pedestrian activity, but it is located in an auto-oriented area where very little pedestrian activity is established.  Across the street from the most retail-oriented side of the project is a large vacant lot behind a shopping center.  Future retail development on that lot may enliven ground-level uses within Lionsgate.  Seattle's live-work proposal needs to acknowledge that street-level live-work units will not be as likely to generate intense pedestrian interest and activity as strictly commercial spaces.  Live-work spaces can be compatible with an established neighborhood commercial area, but a row of street-level live-work spaces without some unusually attractive design element will be unlikely to create a pedestrian-oriented commercial atmosphere where one does not presently exist. 

 

 

Elements of the Proposal

 

Definition of Live-work Unit.  Live-work units, though categorized as residential uses, like artist's studio/dwellings, may occur as a hybrid use containing both a residential and a commercial or manufacturing use.  In this form, the residential use within a live-work unit would be accessory to the nonresidential use that satisfies the requirement for mixed use development in Commercial and Neighborhood Commercial zones.  The proposed definition of “live-work unit” would require that at least one resident of the unit have a business license and would limit the type of commercial activity conducted in the unit to what is allowed in the zone where it's located.  DCLU proposes the following definition:

 

"Live-work unit" means a structure or portion of a structure combining a commercial or manufacturing activity that is allowed in the zone with a residential living space for the owner, tenant, or the owner or tenant's employee and that person's household.  The resident shall be responsible for the work performed in the live-work unit and there shall be a valid business license associated with the premises.

 

The proposed definition gives the City a way to recognize the resulting hybrid nature of live-work units without having to prescribe relative proportions for the living and working areas of a unit, and will allow designers of live-work units to be creative in configuring spaces to serve the diverse needs of new businesses. 

 

Prohibited in Industrial Zones.  Due to clear Seattle policies that preserve industrial lands for industrial uses, live-work units are not permitted in Industrial zones (IB, IC, IG1, IG2, and within the Duwamish Manufacturing/Industrial Center).  Artist's studio/dwellings, which are similar in many respects to live-work units, are only allowed as conditional uses in existing structures, and the conditions reflect the sensitivity of industrial uses to encroachment by residential and other nonindustrial activities. 

 

Street-level Development Standards.  Preserving the potential for vitality and customer appeal in commercially zoned areas is essential to allowing live-work units at street level.  Successful live-work units should function as successful commercial spaces with respect to the streets on which they are located.  Live-work units should be a combination of a residential use and a nonresidential use, and, when located at street level in mixed use buildings, must remain consistent with the development standards for street-level nonresidential spaces in SMC 23.47.008 B, where 80% of a structure's street-level façade must be occupied by nonresidential uses.[5]  Being subject to the development standards of the zone in which they are located will, in most Commercial and Neighborhood Commercial zones, result in the following requirements:

·        Generally, depth from the streetfront façade must be 30 feet.

·        Nonresidential uses at street level must not be principal use parking or accessory parking, mini-warehouses, warehouses, lodging uses or utility uses.

·        At least 51% of the nonresidential portion of a structure's streetfront facade containing the required street-level uses must be at or above sidewalk grade.

·        Entrances to required street-level uses must be no more than three feet above or below grade.

·        Mixed use buildings must have a minimum floor-to-floor height of 13 feet at street level.

 

Based on street-level live-work examples in other cities, even live-work spaces in a "storefront" configuration are not always active contributors to a lively streetscape.  An active streetfront is only one consideration in commercial areas.  Allowing live-work at the street level may not be as street-enlivening as a commercial enterprise would be, due to its attendant advertising and customer activity, but live-work spaces allow for a street design that is sensitive to pedestrian scale and ambience while maintaining opportunities for commercial use in the future.  Following recommendations made at a recent forum on space for artists, DCLU analyzed whether requiring street-level live-work spaces to be open to the public in some manner (e.g., a minimum number of hours per week) might limit the dampening effect of a shuttered storefront.  Based on the following factors, DCLU recommends against such a requirement: 

 

Applying the same development standards to street-level live-work units that apply to all mixed use development in Commercial and Neighborhood Commercial zones should help ensure that the resulting nonresidential space within a street-level live-work unit will have adequate design features to attract tenants or purchasers on the strength of its viability as commercial property.  

 

Open Space Requirements.  Comprehensive Plan policies reflect the importance of open space for residents and employees in commercially zoned areas.  Consequently, live-work units not located at street level must meet residential open space requirements, which will make them more suitable for round-the-clock occupation.  Live-work units located at street level, however, will be oriented toward the streetscape.  This access to the light and activity of the sidewalk should generally meet the objectives of residential open space requirements. 

 

Protection of Mapped Neighborhood Shopping Districts and Pedestrian-designated Areas.  Seattle approaches the issue of preserving and enhancing its neighborhood business districts and pedestrian-designated areas in two ways: (1) use and development standards that apply to individual urban villages (see SMC 23.47.004, maps A - K); and (2) use and development standards that apply to already-established pedestrian-designated streets. 

 

In urban villages whose neighborhood-planning processes mapped areas where single-purpose residential buildings are prohibited, such as South Lake Union, Wallingford, Lake City, and Bitter Lake, street-level live-work units will be prohibited.  In pedestrian-designated areas (P1 and P2 zones), street-level live-work units will also be prohibited.  In Downtown zones, live-work units are proposed to be allowed outright, except at street level in those areas, shown on Map H to SMC 23.49.025, where specific street-level uses are required.  Prohibiting projects that are solely live-work units in areas where single-purpose residential buildings are prohibited will protect the intent of neighborhood planners from the risk that a project comprised entirely of live-work units, the impacts of which might be indistinguishable from a single-purpose residential building, could be located where such projects are not wanted.

 

In the remaining areas of Commercial and Neighborhood Commercial zones, live-work units are proposed to be allowed outright if they meet the development standards that otherwise apply to mixed use structures in the underlying zone. 

 

Artists and Live-work.  Some in the arts community recommended that DCLU explore live-work regulations that would specifically encourage space for artists.  The rationale is that artists, in particular, would be assets to their surrounding neighborhoods.  Within the narrow scope of land use regulation, however, artists' housing concerns are the same as any low- or moderate-income household that finds it increasingly difficult to find an affordable place to live, and working artists in any medium are largely indistinguishable from creative entrepreneurs. 

 

Developers in Seattle have successfully adapted older industrial buildings into artist's studio/dwellings, which must be occupied by a "bona fide working artist" or a "person regularly engaged in the visual, performing or creative arts."  This restriction has drawn a few complaints that some residents of these spaces are not artists at all.  There are models of jury systems in other jurisdictions, however, that can determine in a fair way who is a bona fide working artist.  Seattle's recent artist housing projects generally employ similar systems to make the more important determination of whether a given applicant-artist will be compatible with the prevailing community of artists within the project.

 

DCLU proposes a broader approach to live-work regulation, one that fosters a diversity of living and working spaces for artists as well as for other enterprises. 

 

Incentives for Mixed Use Development in Commercial Zones.  

DCLU’s analysis of live-work uses within mixed use development is driven in part by recent concerns over the effect the economy is having on development and on commercial leasing.  As Seattle’s economy labors toward recovery, some developers and neighborhood business groups have again expressed increasing concern over vacant storefronts, often perceived as evidence of "urban blight."  To find out how current levels of mixed use retail vacancy compared to vacancy in 1993(when the earlier mixed use study was conducted), DCLU staff contacted leasing agents for new mixed use buildings in the Greenwood, West Seattle, Ballard and Belltown neighborhoods currently advertising vacant retail spaces.  They report that retail spaces are generally being absorbed at normal rates, the key factors being location and the quality of design.  Citywide, the total retail sector vacancy rate is a low 3.3% and the office sector vacancy rate is approximately 11%.[6]  Chronic vacancies do not appear to be as large a problem as they were in 1993.  Allowing live-work units at street level in mixed use developments will increase options for developers of mixed use projects, and thereby incrementally address the absorption rate of new retail space.

 

DCLU’s proposal continues current residential density incentives for mixed use development.  Live-work is a hybrid use combining residential and nonresidential uses, which is different from a solely residential use in that, in the best case, it is indistinguishable from a nonresidential use and, in the worst case, it preserves the potential for future establishment of a commercial or other nonresidential use.  Essentially, allowing live-work units increases the options for mixed use development, meeting the spirit and intent of the current approach to mixed use, and helps with any difficulty experienced in filling the spaces in projects.

 

 

Recommendation

 

Live-work units can significantly broaden the housing types allowed in Seattle.  The proposal

 

The Director recommends adopting the proposed Land Use Code changes.

 

 


Attachment 1

Consistency with Seattle’s Comprehensive Plan

 

Housing

 

Goals for mixed use commercial areas

 

Mixed use commercial areas

 

Policies

 

 

 

 



[1] Thomas & Potter, Mixed Use Development Standard Study (December 1993) at p. 40.

[2] Official Guide to the City of Oakland Live/Work Building Code, http://www.live-work.com/plainenglish/

[3] Artist Resource Newsletter (Sept 21, 2002).

[4] Amanda Bishop, "Housing Hurdles Stunt Growth," San Francisco Business Times (Nov 23, 2001).

[5] Exceptions to the 80% requirement are calculated when a structure faces two or more streets, one of which is not a commercial street.

[6] ReisAmerica, Second Quarter 2002 Report, and Economic Development Council of Seattle and King County, http://www.edc-sea.org/research_data/economic_realestate.cfm#office.