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<br />An important component of achievin~ a healthy <br />mix of locally oriented commercial uses is the <br />issue of affordable commercial space. <br /> <br />stand legal challenges to these often contro- <br />versial regulations. To illustrate, one of the <br />Corvallis, Oregon, comprehensive plan poli- <br />cies states the city's goal to "support the <br />establishment of locally owned, managed, or <br />controlied small businesses." Similarly, in <br />Manchester, Vermont, the town plan policies <br />contain the following objectives: <br />· Create and maintain a business environ- <br />ment which is hospitable to locally owned <br />and managed businesses. <br />· Create regulations to moderate the <br />increased presence of retail businesses that <br />. . . attract a nonresident customer base. . . <br />whose presence in Manchester would tend to <br />detract from the Town's uniqueness or distinc- <br />tiveness as a place to visit. <br /> <br />CREATING AFFORDABLE COMMERCIAL SPACE <br />An important component of achieving a <br />healthy mix of locally oriented commercial <br />uses is the issue of affordable commercial <br />space. locally oriented businesses often <br />cannot afford the high rents that character- <br />ize vibrant downtowns and successful cen- <br />tral business districts. Many communities <br />have implemented affordable housing <br />requirements through inclusionary housing <br />(i.e., a requirement that a certain percent- <br />age of new residential homes be affordable) <br />and commercial linkage programs (a <br />requirement that developers of nonresiden- <br />tial property pay a fee to the local govern- <br />ment for the creation of affordable housing). <br />Soon, these requirements may serve as <br />models for creating affordable commercial <br />space. The following are two potential <br />strategies, one voluntary and the other <br />mandatory, that could draw from affordable <br />housing programs in order to create and <br />sustain affordable commercial space in <br />areas threatened by an overconcentration of <br />high-end businesses and chain retailers. In <br />some respects, these strategies may look as <br />much like an economic development pro- <br />gram as a zoning regulation. As land-use <br />regulations, therefore, these approaches <br />must seek to strike a balance in serving the <br />public interest without being labeled an <br /> <br />anticompetitive policy that favors certain <br />users with subsidized lease rates. <br /> <br />Incentives <br />local governments frequently offer incentives <br />to developers who agree to' provide affordable <br />housing, open space, and other community <br />benefits. These incentives often take the form <br />of density bonuses, expedited development <br />review and permitting, and exemptions from <br />certain land-use regulations or requirements. <br />These incentives could be extended to com- <br />mercial or mixed use developers in downtown <br />and other key commercial areas who provide <br />"affordable" commercial space on the ground <br />floor of their projects. This space could take <br />the form of units with limited leasable square <br />footage or restrictive covenants that cap rents <br />for certain properties. Incentives are more <br />palatable to most developers than direct regu- <br />lations requiring provision of affordable <br />space. Also, affordable housing programs <br /> <br />already in place could be adapted to create <br />additional incentives for an affordable com- <br />mercial component. Incentives can help to <br />keep residual land value (i.e., the land value <br />remaining after regulatory restrictions such as <br />zoning and development standards are con- <br />sidered) at a level that maintains project feasi- <br />bility from the developer's standpoint. <br />However, in some places incentives have <br />proven ineffective in accomplishing goals like <br />affordable housing. Thus, communities may <br />want to consider imposing regulations to <br />encourage affordable commercial space. <br /> <br />Regulation <br />One approach might be to emulate manda- <br />tory affordable housing linkage programs. <br />Developers of commercial space, or any <br />development that eliminated commercial <br />space, could be required to provide off-site <br />affordable commercial space or make a pay- <br />ment-in-lieu into a city affordable commer- " <br />cial space fund. This fund would be used by <br />the local government to purchase or build <br />commercial space that would be leased out <br />to "desirable" businesses at reduced rates. <br />Affordable housing programs could serve as <br />a model, particularly in the areas of admin- <br />istration and enforcement. <br /> <br /> <br />., <br /> <br />m <br />'" <br />'" <br />,. <br /> <br />ZONING PRACTICE 10.07 <br />AMERICAN PiJlNNING ASSOCIATION I page 5 <br /> <br />65 <br />