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Changing concepts for working and living in the same space
Saturday, September 29, 2007

With more people working at home at least part of the week, it's not surprising that condo developers around the country are beginning to promote live-work units as part of their mix of offerings. Though the concept harks back to days when the corner grocer lived in rooms above the store, the design usually owes more to the artist's lofts that have proliferated over the past few decades in renovated commercial buildings found in resurrected downtowns.

In addition to sculptors and painters, these modern, at-home work spaces target professionals and entrepreneurs. While they may appear to be a good solution to such urban problems as sprawl, traffic congestion, rising fuel costs, parking and the mounting price of leased office space, the newness of the concept can present a number of challenges to consumers and developers.

Some developers could find their projects delayed because building codes in most municipalities don't yet have provisions for these residential-commercial hybrids. The type of work the unit owner can engage in will likely come under municipal examination, community scrutiny or both. And some critics question whether the cost of the average live-work unit puts it beyond the economic reach of most young professionals.

"Live-work condos are a niche market, but they are, in certain circumstances, attractive to some people," says John McIlwain, senior resident fellow for housing at the Washington, D.C.-based Urban Land Institute.

There's no doubt that working at home is a growing trend. In 2000, the U.S. Census found nearly 4.2 million people age 16 or older worked at home most days during the week, up from 3.4 million in 1990. That 23.5 percent increase over 10 years almost doubled the growth rate of the overall work force. The Census Bureau's most recent estimate, made from community surveys conducted in 2003, raised the number of home-based workers to 4.5 million -- an increase of slightly more than 7 percent in only three years.

There's no single definition of what constitutes a live-work unit.

"In some cases, they simply have an extra room that can be used as an office or a bedroom," says Mr. McIlwain.

The Metropolitan, a condo project by Hoyt Street Properties in downtown Portland, Ore., offers prospective buyers a range of possible floor plans to help them visualize possible uses, says Marilyn Andersen, Hoyt Realty Group's principal broker.

Those uses range from a contemporary office with several workstations to a small office within a home.

Kolter City Plaza in West Palm Beach, Fla., where zoning is more amenable to live-work buildings, offers upstairs living and downstairs work units connected by an internal staircase, says real estate attorney Cynthia Spall of Gunster, Yoakley & Stewart, which represents the developer.

Code problems arise because the live-work concept usually falls between the cracks, says H. William Freeman, a principal with Freeman, Cotton & Norris in Bloomfield Hills, Mich.

"Communities don't know whether to treat them as commercial or residential," Mr. Freeman says. "And that presents problems because of the stricter commercial codes for things such as fire protection and sewer capacity, the need for compliance with the Americans with Disabilities Act, and so on."

Because of these difficulties, live-work units are most frequently found in master-planned, New Urbanist-style developments, Mr. McIlwain says, "where the idea is to try to combine uses, harking back to the old days -- or at least what we imagine the old days were like."

For the unit owner, Ms. Spall says, "the threshold zoning issue is that clearly only certain uses are going to be allowed in an area that also allows residential use. Buyers need to understand what uses they can and can't have."

These uses are generally spelled out in condo association documents -- or sometimes by the municipality. Ms. Andersen envisions the range in occupations by residents at the Metropolitan as "attorneys to artists, counselors to massage therapists."

Can the young professionals, often cited as the likely target market for live-work condos, afford to purchase them? A study of affordability prepared by The Live-Work Institute, a nonprofit organization in Oakland, Calif., founded by architect Thomas Dolan, says the idea is that the owner of such a unit saves money by not paying separate rents for living space and work space, as well as reducing transportation costs.

First published on September 29, 2007 at 12:00 am
Marilyn Bowden writes for www.bankrate.com, a loan clearinghouse on the Web. Reach her at editors@bankrate.com.
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