In August, this column continued its series on accessory commercial units (ACUs), and it focused on placement.
Affordability is also vital.
Affordable commercial space is not necessarily easy to come by in this neighborhood.
This is largely due to city zoning rules, under which most commercial uses are not allowed outside commercial/mixeduse zones. That’s where the price of land is higher on a per-square-foot basis than for land with residential zoning – even if just on the other side of a lot line from commercially-zoned parcels.
This is partly a function of the potential residual land value of developing to the highest and best use allowable on a property.
Seller expectations also play a role, with an expectation of a seven-figure sales price for commercially-zoned land in a hot corridor, even if it isn’t currently producing income of any sort. Even vacant lots can command a price premium, if they are commercially zoned.
Even if commercially-zoned lots were the same price as residentially-zoned lots, a lot in Concordia with a viable building on it of 2,000 square feet or more will likely cost more than $650,000. A smaller building might fetch as little as $250,000, if not in great condition.
That is a lot of cash.
Many people can afford to buy a home for those prices, because they’re able to save for down payments and can obtain federally-backed low-interest mortgages.
Yet purchasing a commercial property for a similar price to start a new, unproven small business is not really within the realm of possibility for these same people.
Therein lies a conundrum. To start a new business, a budding entrepreneur needs space within which to operate. Often, the entrepreneur-to-be may have access to a single-family home, perhaps with a garage or basement that provides the extra space within which to set up specialized equipment and create a product to offer.
The incremental price to build a new commercial structure as an accessory to a home is just the cost of the structure. The land has already been paid for by the primary use.
The incremental price of a new business could thus be reduced by an order of magnitude. It could be as little as the cost of bringing in a shipping container, trailer, camper, prefab shed or other space sufficient to house a small new business. That expense could be small enough to put on a credit card or saved within a reasonable amount of time on a middle income.
Bringing down the cost of entry can reduce the barriers of entry into affordable commercial space. This can ease attainment to the first rungs on the ladder of economic opportunity and make business creation more accessible to folks without subsidy.
The only requirement is to change zoning codes to allow for the legal concept of accessory commercial space.
Editor’s note: The first two installments of this Urbanism series about ACUs were published in July and August.
Garlynn Woodsong lives on 29th Avenue, serves on the CNA board and is an avid bicyclist. He also is a dad who is passionate about the city his son will inherit. He is the planning + development partner with Cascadia Partners LLC, a local urban planning firm. Contact him at LandUse@ConcordiaPDX.org.