Quote:
Originally Posted by RCDC
How are businesses in gentrified ares "regulated" differently than ones in non-gentrified areas?
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I think the argument is if zoning was freer involving mixes of uses, the commercial/residential mix would naturally meet its optimum.
Consider a very high-cost gentrified urban area. Retail space is limited, because much of the land is set aside for residential. Therefore, rents will be higher than even the property values would suggest, as the commercial base is even more restricted than the market in general. In turn, businesses which offer limited utility to local residents but which can make rent (say banks, high-end fashion stores, or jewelry boutiques) end up being over-supplied, whereas you might have to leave the neighborhood to go to a drug store or get your hair cut.
Allow for enough commercial space and the price per square foot for residential and commercial will reach something approaching parity, at which point it stops making economic sense to expand commercial offerings.
Another aspect of freeing up zoning is it's a lot cheaper to convert the first floor of a historic residential space into a small retail location than it is to build a large new commercial space. The local market might not have a high enough demand for the rents required to make the latter feasible, but home conversion could still be quite profitable.