Real Estate Update in Palo Alto & Los Altos

With more and more people working at home at least part of the week, it’s perhaps 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 loft that has 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.

Demand for live-work space grows
“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. “Sometimes people use them for an office or a store, sometimes just as extra space they can use or rent out for income.”

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.

Multiple design features
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 McIlwain. “In some cases, there’s real showroom space with an apartment upstairs. Sometimes it’s more of a loft-style apartment. So they vary.”