The Discourse Lounge · Housing & Cities
TIER 4 Wed, 19 Nov 2025 22:41:19 +0000
An analysis of commercial corridor upzoning for apartments in Berkeley, Calif. and the issues must be tackled to harmonize density with local business survival. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ | | ---|---|--- | | | Forwarded this email? Subscribe here for more --- # The Challenge of Commercial Upzoning ### An analysis of commercial corridor upzoning for apartments in Berkeley, Calif. and the issues must be tackled to harmonize density with local business survival. | | Darrell Owens --- | Nov 19 --- | --- --- | | | --- | | --- | | --- | | --- | | READ IN APP --- | | ---|---|--- Foot traffic in Downtown Berkeley at University Ave. and Milvia St. at 7 PM. Two brand new apartment homes built with local, small businesses occupying the ground floors. Flanking both are older commercial strips with popular restaraunts. This was formerly a late-night cafe and an autoshop parking lot. San Francisco is in the midst of a political war over the Family Zoning plan, which re-zones commercial corridors on the west side of the city for higher-density apartments. Oakland has already re-zoned its iconic Rockridge district along College Ave. for mid-rise buildings several months ago, without controversy, due to Oaklanders broadly supporting densification. Last week, Berkeley had a hearing on its proposal to upzone a smaller portion of College Ave. known as The Elmwood, and two linear commercial districts in North Berkeley. The first council hearing on the upzoning -- as they typically do in Berkeley -- witnessed significant opposition, this time from merchants. The reason cities are doing this is that the federal government on condition of receiving public funds, has begun enforcing "Affirmatively Furthering Fair Housing" rules, which require equality of residential land uses between low-income and high-income neighborhoods. This framework began with the Civil Rights Act of 1968, but enforcement was started by the Obama Administration. At a high level, I'm excited about our proposal. I have long wanted dense, new housing on transit corridors in my neighborhood in North Berkeley, which is rapidly aging at the rate of Floridian retirement communities, rich with 4 supermarket grocery stores, and inaccessible to middle-class young people. Voters appear supportive of these initiatives, too. The notoriously anti-growth and affluent towns of Marin County saw two major issues, commercial upzoning in iconic Sausalito and the recall of a pro-development councilmembers in Fairfax, pass and fail this November with strong margins. There are valid concerns that need addressing with commercial upzoning, especially as cities dictate more density to commercial areas over existing residential ones. At Berkeley's first council meeting on the subject, there were the usual anti-development regulars with the usual diatribes about how terrible the downtown area in the city has become with new apartments. But the vast majority of merchants who spoke were not NIMBYs but earnestly worried that development would lead to their removal and replacement with chain stores who can afford the new commercial rents or survive the construction period. While research is increasingly incontrovertible that new housing lowers area rents and increases mobility, it is not as clear that new housing is good for _incumbent businesses_ as proponents of commercial upzoning imply it is. Areas with greater residential density and foot traffic are good for business. But this is not usually about the impacts on businesses during and before the process of construction. The argument for commercial corridor rezoning is that incumbent businesses will benefit and tax revenues will increase. Under Proposition 13 in California, any property transaction is a boon to local property tax revenue, no doubt. But how effective were previous commercial corridor rezonings at accomplishing increased commercial sustainability? There's no better case example than Berkeley's downtown plan (which is a corridor upzoning since Berkeley does not have a real downtown but just two commercial strips that intersect each other.) At the council hearing, anti-upzoning opponents frequently cited that downtown has two blighting development projects that have stalled and implied this may besiege their quaint districts. One of these projects, colloquially referred to as Harold Way, although now largely forgotten, was the product of a decade-long showdown of lawsuits and meetings that piqued my personal interest in housing as a freshman in high school. It shouldn't take the duration of three presidents to approve and build a rather common high-rise apartment. The state passed a law (S.B. 330) written in response to Harold Way that capped this situation from happening again. The other, more egregious blight by a developer named Chicago Ventures sits as a vacant husk on Center Street, which was once a bustling strip of daytime shops nestled at the gateway to UC Berkeley. Chicago Venture's stalled project, its widely disapproved method of local merchant replacement, and its tight-lipped public communications to a supportive public have been the biggest poster child for a bad outcome of commercial redevelopment. Although I've been told by city staff that the project developer is actively planning to resume work next year, until this project moves forward, it will continue to be held up as the worst-case scenario. As bad as vacancies and stalled projects are, nobody remembers them once they're completed, no matter how long they've been stalled or vacant for. Telegraph Avenue used to be clustered with vacant lots and buildings. "Telegraph and Haste" was synonymous with Center Street today: an ugly, blighted, empty lot for over 20 years. But housing was finally built over it, and a 20-year association with "blighted lot" was erased from local memory, overnight. Overall, since the passage of the Downtown Plan and the influx of downtown residents, the amount of vibrancy in downtown Berkeley is objectively miles ahead of all three of these neighborhood districts and is on par with San Francisco and Oakland's downtown. Anyone who disputes this is encouraged to contact me and I'm happy to record street activity with them during my Friday evening, Saturday or Sunday. Especially the nightlife. Downtown nightlife hasn't been this plentiful with clubs, bars and restaurants in decades. Downtown in the 2000s was so dead that my father and I would park right on Shattuck Avenue near Center Street around 5 PM because nobody was there. My partner's folks come out from the suburbs every now and then to get dinner and they rave about how lively Shattuck is. | | ---|---|--- Solano Avenue in Berkeley around 3 PM on a cold but dry Sunday. The grocery and gas station on the right -- mid-century structures -- are identified as likely sites for dense housing. On the left side are legacy businesses in older, small lot, unlikely to be redeveloped structures that have dedicated patrons who mostly drive there. All commercial districts in Berkeley are nice districts and Solano and North Shattuck are no exception. I frequent the Elmwood (College Ave.) area some weekends and it's lively. Honestly speaking, Solano has remarkably little foot traffic on it, even at noontime on the weekends. I walk Solano almost daily, and outside of the Peet's Coffee patio, it can feel like a ghost town. North Shattuck and College Avenue have a decent smattering of people, especially in the morning and noon hours. Dining on North Shattuck is quite good, and it's seamless with the dining on the downtown portion of Shattuck north of Allston Way. Although downtown feels more lively due to the collection of clubs and lounges beside the dining spots. The same is true for downtown Oakland, which has seen an explosion in eateries and restaurants post-development. Where North Berkeley and College Avenue beat downtown is the morning activity on the weekend. They do feel, relatively to their size, more vibrant than downtown on Saturday and Sundays at 12 PM. Downtown lacks as high a concentration of brunch diners and morning cafes, which has gotten a bit worse since the pandemic. It didn't used to be this vacant, although new cafes are opening downtown post-development once again. Part of the problem is stalled development projects, and others are neglectful commercial landlords like the property beneath the Shattuck Hotel. I noticed the people who say downtown is dead and ruined tend to be older. My theory is that they used to drive downtown, and now that street parking is all taken, it's harder to shop there without paying for parking. Why they don't take the bus, for which nearly all lines go downtown, or just use the parking garage, I don't know. Also (and I'm not being racist), but old Downtown and the three commercial districts targeted for upzoning are very WASP-y in their restaurants. Lots of Americana food and non-American food are designed to appeal to American taste buds. $9 ice cream scoops, pizzas, hamburger shops and non-American food seasoned and catered for sensitive mouths. Many of my favorite hot dog and burger joints have been replaced with currently popular, international Asian cuisine not catering to American taste buds like hot pot, Asian barbecue, ramen, boba and dumpling shops. There's also been a boom in Hispanic restaurants and organic restaurants. They're all objectively popular and packed with people. These restaurants are responding to the shifting demographics of Berkeley. A town increasingly less White and Black, less Americana in cuisine, and more Asian and Latino, more seasoning and spice, especially downtown. Even if I personally miss the Americanized Chinese restaurant that my white and black friends loved and my Chinese friends ignored, the crowd of diverse young high schoolers and college kids every day standing outside at HeyTea at 12 PM is good for vibrancy and the soul. The food is so much better downtown today than it was years ago. But has this housing boom been good for incumbent businesses as it has been for newcomer restaurants? Well, if the business owns its building, yes. They've gotten lots of new customers, or they were happy to sell and retire in peace. Some local shops, like Endless Summer Sweets, a sugarbowl for high schools and college kids, returned to its spot after development and is packed at lunch time. Others, like the New York Times-acclaimed Rose Pizzeria, quickly nabbed an expansion into a coffee shop at a newly built retail space beneath an apartment. But in most cases, a lot of stores that weren't cafes or restaurants have _not_ returned under new housing projects downtown. Nearly all of the ground-floor commercial spaces in new developments in Berkeley and Oakland have been cafes, restaurants and food-related services, gyms, or banks. These businesses post higher profits and stand a better chance of surviving a 10-year commercial lease. Many former merchants downtown have been frustrated with the process of eviction for new housing -- particularly the Center Street strip -- and the commercial stalls replacing them are not as accommodating or affordable. After their lease ends, there's really little other retail space available in the area. Older commercial districts, which make up Solano, North Shattuck and Elmwood, were built to initially house high-margin retail businesses of their period. Through generations of filtered commercial rents, they now house quirky, low-margin shops you don't normally find in new developments. Even though I don't patronize them much, it is nice that older commercial districts have a variety of businesses like gift stores, trinket shops, hardware, salons, and furniture stores that wouldn't return the revenue to survive in new development. The declining diversity in commercial districts is many years old. People now shop online for clothes, medication, and trinkets, and mostly go out for food and beverages only. Commercial stalls in new developments are fast-forwarding what is inevitable for many commercial districts. Right now, gyms and fitness are all the rage, replacing once vacant spaces around Berkeley's commercial strips. There will be new commercial activities with high margins that dominate the future stalls of mixed-use developments. But the local city government also has responsibility in the merchant struggles, specifically the ease and cost of getting permits and licenses to open a business. Berkeley has historically been an anti-business city, which only passes policies that give advantages to incumbents over chains and newcomers. What incumbent businesses fail to understand is that this hurts them too, because it makes turnover and evolution unnecessarily long and complicated here. While Solano Ave. in Berkeley has struggled with vacancies and foot traffic, the Albany section of Solano is significantly more vibrant. In Albany, Solano is rich with new restaurants, which aid the non-high-margin businesses like toy stores, spice stores, and trinket shops by putting more patrons on the sidewalks to stroll by. When I talk to merchants on Solano, they tell me that the hurdles to getting permits and business licenses in Albany are much easier than in Berkeley, and that Albany city staff dedicate tremendous time to assisting local businesses. Local and state permitting for businesses is cumbersome and expensive. This results in prolonged periods of vacancy, not only in downtown but the small, commercial districts. I'm reminded of this Chinese entrepreneur, shocked at how long it takes to get permission to renovate in the U.S., just due to the lethargic responsiveness of local government. > Wang said the biggest cultural shock for her is the time it takes to open a store in the US. Ningji decided to take over the fully functioning venue of a shuttered beverage store in the Los Angeles suburb of Glendale last November, but as of early February, Wang was still waiting for the license to be approved to start the renovation. "I am speechless," said Wang. "We open a new store on average in 20 days in China." In the US, especially with inattentive or underfunded local governments, the timeline and process require consultants and lawyers, instead. The local city government is often so understaffed that the issuing of permits takes months on end. The entire process takes years. We really need a YIMBY movement for retail and commercial activity, the way we have one for building permits for housing. The time it takes to get permits and licenses to open up businesses kills local businesses, which kills the prospect of walkable cities, even with density. Without an easing in the opening and operation of local businesses, development means almost certain closure for businesses without decent margins. Moreover, city councils are signaling their desire to drop ground-floor commercial requirements. I strongly oppose this. While not having ground-floor commercial makes sense for residential-only or primarily residential neighborhoods, to replace commercial slots in existing commercial places with residences forecloses any business ever operating there. Shattuck Avenue from Francisco to Virginia has a dead zone of residential-only mid-century apartments with only their gaping parking garages to greet you before the commercial activity re-commences. A short-sighted decision that ruined commercial vibrancy there. Supply and demand apply to commercial spaces just as they apply to housing units. When commercial space is lost for development projects, it inflates commercial rents and reduces mobility and opportunity for future businesses. New housing benefits existing businesses, provided they aren't in the redevelopment area. The benefits for displaced businesses are much lower absent commercial vacancies elsewhere, and the ease of mobility into them. If American cities persist with this path of least resistance by only placing high-density housing on commercial strips, we're at risk of cities becoming high-density suburbs without walkability that made the commercial areas ideal for density in the first place. So what should accompany commercial upzoning to guard against this? 1 -- Opening a business should be doable in 6 months to 1 year. This isn't specific to upzoning, this is a local government administrative issue. Commercial building permits need to be streamlined substantially, and commercial licenses that aren't required by state authorities should be dropped or streamlined. The California legislature recently passed a YIMBY law known as the "Housing Shot clock" where if city governments fail to issue certificates to housing developers within 30 days, a third-party reviewer can grant it to them instead. We need to bestow that same grace onto local businesses and commercial interests. If non-life-threatening licenses aren't issued within a month or two, let a third-party review get it for you. 2 -- Require Commercial Ground Floor and Expand Commercial Zones. I'd favor abolishing commercial requirements for new housing if we were expanding commercial zones, but we're not. Commercial zoning shouldn't even exist. Anyone should be allowed to open a restaurant or non-industrial, non-hazardous retail store wherever they want. That would take a lot of power away from commercial landlords, where many cities are dominated by a handful of commercial property owners who have a monopoly over brick-and-mortar buildings. Add a commercial buffer of two or three blocks from existing commercial strips, along with upzoning. Berkeley's commercial zoning (like SF and Oakland's) is silly and based on where old streetcars used to have stations. Allowing adjacent houses and properties to become or include commercial use could mitigate the immediate harms of redevelopment and open up opportunities for relocation during construction. Several cities have passed laws legalizing retail uses on corner lots citywide. 3 -- Give Benefits, Exempt Impact Fees, and Offer Tax Abatements to Mixed-Use Developments Protecting Incumbent Businesses. Mixed-use streamlining can incentivize commercial companies to build apartments. Costco is entering the apartment business by developing a new supermarket with homes on top in Los Angeles to take advantage of state law streamlining home construction with commercial components in commercial zones. With the boosted incentives at the local level, cities can get the commercial industry into the housing business and expand ground-floor vibrancy. Living near grocery stores **is as important** as living near public transit for reducing carbon emissions and vehicle travel. I would pass a**** local grocery streamlining ordinance exempting a suite of fees, hearings, and taxes for new housing projects with ground-floor grocery stores. I want the grocery stores in North Berkeley not to leave, but to rebuild their old facilities with housing on top, like what's being proposed in San Francisco. This is, in my opinion, the most important outcome for commercial upzoning. Same with local business preservation. It's not practical to mandate it, but incentives would work. Any developer that commits to returning a displaced business to their ground floor retail and assisting their relocation during construction, I would exempt from any additional hearings beyond the issuing of a building permit by the Planning Department, and offer abatement and fee exemptions to help compensate for the expense of relocation services. 4 -- Get Over Commercial Vacancies. Ground-floor retail in new development can remain vacant and impose a street blight for years on end. I feel like anti-development forces think only in the short-term of how a construction project impacts them, and pro-development forces think in several years about the economic impacts. When I look at the work being done in my town, I'm thinking of the impacts 30 years from now. Commercial areas have always taken a long time to fill vacancies. I recall when the new apartment at Milvia and University Avenue had a commercial vacancy for 7 years, which anti-development folks would constantly point out as a blight. This year, a popular, local ramen shop expanded there, and those memories were erased overnight. No one will remember or care that a developer took a year or several years to fill a space once it's filled. Long-term thinking accepts that ground-floor commercial may be vacant for years. That's alright. It's not going to be vacant forever. I know these ideas won't convince people who just don't want tall buildings, but that's a declining position anyway. The people want housing, and voters make that clear, constantly. American urban planning is becoming too focused on adding housing units while not focusing on commercial activity and transportation necessary to urban vibrancy and low-carbon lifestyles. They're all interconnected. Commercial areas are not just places to add housing units with the least political resistance; they're infrastructure assets that make possible low-carbon lifestyles and should be treated as essentially as a transit line. I live in North Berkeley precisely because the transit-oriented commercial area makes it possible to be car-free. The survival and expansion of commercial activity is as essential as the housing units themselves. | | ---|---|--- Commercial districts in the urban East Bay are mostly products of old streetcar stops built by developers. This corporate grocery store and drug store is now a beloved toy shop and tattoo parlor randomly situated in residential North Berkeley. 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