From the March 2000 issue of Startups

When Jim McCarthy wanted to launch McCarthy Communications in his Washington, DC, neighborhood of Georgetown, he figured working from home might be frowned upon.

To the contrary, he found the community was home-office-friendly.

Congress, he learned, had enacted "dual-use" enterprise zones to spur economic growth in the area. Thus, in 1997, when McCarthy moved into his condominium--with ample space for his business and a loft overlooking bustling M Street--he knew he had found a home.

"The idea was to promote more small-business [activity] and investment in the neighborhood," says McCarthy, noting that businesses enjoyed a reduction in both the local business tax and the district's unemployment fund. "It's a good thing. Small business needs it."

For DC officials--as well as leaders in communities throughout the country--such zoning moves to allow home offices help spur new investment in neighborhoods suffering from residents' and owners' flight from the area. This "transitional zoning" provides incentives for businesses to move into formerly residential neighborhoods, or actually rezone residential neighborhoods to include light business and home offices.

When city leaders in Wilton Manors, Florida, saw their Five Points neighborhood aging, they considered ways to curb the downturn in property values and forestall resident flight. The city's Residential-Office Service Control area has been a model success in the South Florida market, says Harold Horne, the city's community services director and author of the plan. Part commercial space, part restaurant row, part artisan colony, some 10 offices are sprinkled among 60 other homes in the special zoning district. Low-level signage, limited parking and a strict review policy ensures things remain quite neighborly.

"We wanted the zoning to serve as a bulwark against blight and to preserve and protect those who live there," Horne explains.

The transitional zoning helps protect the area's residential character and increases property value. The only retail use is for artists who live and sell their own creations from the home. Signage can be no taller than three feet, and most parking must be in back of the properties. Property owners don't have to live or work in the structures, but can do both, Horne says.

Such rezoning is just one tool cities are using to stall decay and draw residents back to once booming neighborhoods, says James Schwab, editor of Zoning News, a publication from the American Planning Association (http://www.planning.org )

Mixed use neighborhoods like Wilton Manors--where doctors, accountants, artisans, retailers and residents peacefully co-exist--are the result of government and residents working together for the good of the community, says Schwab. He adds that such zoning brings no negative impact on the community, and, in fact, often increases property values.

While government staff can recommend zoning changes and city leaders can enact policy, Schwab recommends residents also become advocates for favorable change in their neighborhoods by contacting their zoning department or their elected officials to inquire about potential change in their neighborhood or community. They also should network with the neighbors to gauge or generate support for such change. "People need to recognize a zoning ordinance is a piece of legislation created by people who have a vision for the city and how it works," he says. "[Residents] are entitled to work with the city to enact change."

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