Brian O’Neill’s plan to prevent developers from building more than one apartment over retail storefronts in Philly’s CMX-2 zones got watered down some, but this new idea to prohibit ground-floor residential units shows that he still doesn’t understand the economics:
O’Neill told CP via email: “I will be amending the multifamily residential in CMX2 to allow greater density and to prohibit residential in the front of the ground floor. I am currently meeting with and discussing same with representatives of the administration. Our discussions have been very positive and I am hopeful that we will reach an agreed upon compromise in the next week or two.”
The reason that somebody would want to put a residential unit or a commercial office space on the ground floor is if they weren’t allowed to build more apartments on the top floors. In the absence of arbitrary caps on the number of housing units, most developers would prefer to use the ground floor for retail, and the upstairs floors for residential.
But if you make people choose between building one apartment/one retail space and two apartments, some of them are going to want to build two apartments and use the ground floor for residential. You’ve created an unnecessary scarcity where retail has to compete with residential. The lesson is that you don’t need to ban ground-level residential, you just need to let people build more 3 and 4-story buildings.
(Thanks: Samantha Melamed)