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Empty Storefronts? Let Entrepreneurs Make Things There.

New York and other cities are changing their zoning codes to allow clean, small-scale production in their commercial corridors. Opening up retail spaces to “artisanal manufacturing” has many benefits for communities.

Commercial spaces for lease on West 14th Street in New York City.
Commercial spaces for lease on West 14th Street in New York City.
New York City recently enacted the largest overhaul of its commercial and manufacturing zoning codes in 60 years. A key element of the overhaul offers a model for other cities: It gives blanket zoning approval for small, quiet and clean production businesses in all of the city’s commercial corridors.

That’s especially timely, given the epidemic of vacant storefronts nationwide. Small-scale manufacturers create products — from hardware to handbags to hot sauce — that typically are sold both in retail shops and online and are thus not solely dependent on foot traffic for revenue. That makes them well suited to neighborhoods and business districts seeking to revitalize from significant commercial-space vacancies.

Some other major cities, including Indianapolis and Nashville, have already been allowing clean, small-scale production — sometimes called “artisanal manufacturing” — in their commercial zones. Montgomery County, Md., has done so as well. But nowhere has this been done on the scale of New York City, where storefront vacancies have yet to recover from pandemic levels. This new precedent should generate widespread consideration.

American cities typically have zoning rules that do not allow small-scale manufacturing in storefronts. That’s largely because zoning laws are often outdated and reflect concerns from decades ago rather than current realities. Small-scale manufacturing today bears no resemblance to what was common then.

With the emergence of the digital age in the 1980s, the capacity of small-scale manufacturing began to be transformed. Today, small-scale manufacturers are exceptionally good neighbors, with limited space needed. The New York City law contains a limit of 3,000 square feet per business. Health and safety regulations remain in place, of course.

Today’s appeal and demand for small-scale manufacturing businesses is strengthened further by the fact that they often combine production facilities with a retail store and even entertainment space. That enables them to play a more enhanced role in the civic life of their communities. Small-scale manufacturers or groups of them can become destinations for local residents and visitors, bringing much-needed economic vitality to neighborhoods and business districts eager for it.

The challenge with outdated zoning laws is that small, clean production businesses typically must seek a conditional rule or zoning waiver, which can take many months, even years. That loss of time can cause the business to lose thousands of dollars in the wait or even trigger bankruptcy, and at the very least is a major impediment to the business’s success.

The conditional rule has been needed because zoning laws generally distinguish only between industrial and residential uses. Small-scale manufacturers are not designated in their own right and therefore are often considered light industry. That makes them ineligible for any kind of commercial space in a residential neighborhood or business district, where they are now desperately needed.

The resulting loss to the community is multidimensional, because the benefits of small-scale manufacturing businesses are profound. Not only do they bring needed energy and spending to communities, but they address other economic needs as well. They provide middle-income jobs that pay better than traditional retail and hospitality positions. They enhance wealth-building across a city’s demographic diversity, as increased business ownership helps address the pervasive racial wealth gap. Black business owners, for instance, have on average 12 times more wealth than Black community members who do not own businesses. Research shows that for every 1 percent increase in the entrepreneurship rate, the poverty rate decreases by 2 percent.

Small-scale manufacturers are also likely to be deeply rooted in the community. They typically start as home-based businesses, drawing upon local culture and heritage, and shift to brick-and-mortar settings as they grow. They are therefore likely to hire people and spend money locally.

New York City has adopted a model that could have a major impact on the nation if implemented more broadly. The blanket inclusion of small clean production businesses in commercial areas can fill the vacant storefronts that pockmark our nation, while generating greater economic vitality vital to our communities.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
Ilana Preuss is the founder and CEO of Recast City.
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