Live/work units provide commercial in small increments

Live/work units, an updated version of the old live-above-the-shop storefront, now are built or under construction in a handful of new urbanist projects. Units are built or under construction at Vermillion in Huntersville, North Carolina, Kentlands in Gaithersburg, Mary-land, Middleton Hills in Madison, Wisconsin, and Orenco Station in Hillsboro, Oregon. A type of housing that is fairly common in old towns and cities, live/work units do not fit anywhere in conventional suburban development. New urbanists rediscovered live/work, and are now exploring the extent of the market. The prototype for the new urbanist live/work unit is Ruskin Square in Seaside, Florida, where 20 townhomes were built with the first floor at sidewalk level for easy pedestrian access to a commercial enterprise. The top two floors of the three-story buildings are for living. Ruskin Square sold out quickly and became one of Seaside’s most lively mixed-use areas. The current batch of live/work units is testing the viability of the concept in a nonresort setting. Regulation of these units varies significantly, with some towns treating them as home-based businesses, others as full commercial enterprises. Regulation significantly impacts cost of units, and by extension market appeal. The depth of the market has not been fully explored in any project or region. Live/work units serve the following purposes in TNDs where they have been built: 1) They provide a transition bet-ween residential units and more intense commercial buildings. 2) They offer the smallest possible increment of retail and professional office, allowing businesses to incubate with a very small investment, affordable for average families. 3) In some new urbanist projects, developers are declining to build mixed-use, multistory buildings in the town center. In that event, adding live/work units is a relatively easy way to create a mixed-use, 24-hour environment. 4) They allow the developer to sell the dream of entrepreneurship, or “being your own boss.” 5) They accommodate the ever-growing number of work-at-home families. 6) Buyers get flexibility of use. The downstairs can be used for retail, office, or living space. The upstairs also can be used for commercial or living space, and can be lived in by the owner or rented out. 7) Entrepreneurs can save money and gain control by owning their own workplace. Also, they can pay one mortgage for home and business, instead of making two payments. Live/work in Vermillion In Vermillion, developer Nate Bowman has sold 83 townhomes, eight of which have been live/work, since opening about a year ago. The 1,495 square foot units started at $131,000, and have since escalated to about $140,000. The brick live/works are slightly more expensive than Bowman’s standard townhomes. The 16-foot wide units have a 170 square foot office, a full bath, and a bedroom on the first floor. The second floor has the main living areas, and the third floor the master bedroom. “The key is to start small, if you don’t know the market,” says Bowman. variety of units Bowman’s next step will be to offer a one-bedroom version of the same unit, with the entire first floor devoted to business space and a small half bath. He also has plans to build a significantly larger, 21-foot-wide live/work model. “One key to getting this to work is to build different size units, so that you get different size businesses, which is what you find on a village street,” he says. A variety of floor plans and sizes translates to wider market appeal and more sales of these units, Bowman adds. Bowman has permitted the live/work units as homes, treating the commercial as home-based businesses. They are built to the same standard as residential townhomes. If buyers want to open a business requiring a health permit, the units will need to be upgraded. In Kentlands, the live/work units are being designed as commercial buildings, with stricter building standards. Gaithersburg regulations require a two-hour fire separation between uses for nonsprinklered units, and a one-hour fire separation for sprinklered units. They also must have a separate HVAC system for commercial and residential areas, must meet commercial load bearing requirements, must install hard-wired smoke detectors throughout, and include other safety features. Stephen Wilcox, president of Parkwood Homes, says regulations have increased costs $75,000 to $100,000 per unit over residential Kentlands townhomes. Nevertheless, he has sold 11 of the first 13 units for $350,000 (shell) to $425,000 (finished), and expects to have no trouble marketing the other two. Wilcox contends that the regulations could safely be eased somewhat for live/work in Gaithersburg. He has installed a separate HVAC system on each floor, for example, to permit the units for three uses. That standard is more stringent than the requirements for a 50-story office building, he says. broad market approach Three live/work units have been built and sold in Middleton Hills, and another is under construction. Builders are wary about the marketability of live/work, so the developer, Marshall Erdman Associates, is taking a broad approach to marketing. “We designed them so they could be sold as live/work, live/live, and work/work,” says Jane Grabowski-Miller, architect with Marshall Erdman Associates. “I don’t think anybody expected there to be a market for work/work, but that has turned out to be the strongest market. It’s what I call the commercial condominium. People want to own their own workplace.” The units in Middleton Hills have sold for $214,500. They are two floors, totaling nearly 2,000 square feet, with an additional full basement that is completely below grade in front. Conforming to building codes has been difficult, Grabowski-Miller says, and has increased costs and slowed down design and construction. “The building code reviewers just scratch their heads and say ‘I don’t know,’ she says. “The regulations are not set up to handle live/work.” One of the first units, to be occupied by a salon on the first floor and a spa on the second floor, shows how costs can be impacted by regulations. The owner had to provide a duplicate massage room and handicapped accessible shower on the first floor, because these facilities are offered on the nonwheelchair accessible second floor. Because the basement was designed as a waiting room, a second set of stairs were required. The first four live/work units were regulated as a single building. Regulatory uncertainty and conflicting interpretations from building code reviewers at the local and state level slowed down the design process, she says. important purpose Despite the regulatory hassles, the live/work units are serving an important purpose as Middleton Hills, says Grabowski-Miller. “They are adding a commercial element that we need, because it is difficult to bring commercial into a TND. They also are providing flexibility of use for people who can’t find it in any other building type.” A dozen live/work units have been built in Orenco Station, with 16 more planned. The units range from 2,250 to 2,400 square feet and sell for $370,000 to $430,000.