Years ago, I discussed with some other people involved in real estate the idea of live in / work in space: Mid range priced apartments with an attached (or located elsewhere in the building) small spaces for businesses. Not necessarily artist space. Case in point: One of my tenants runs his cleaning service out of the basement in one of my buildings.

There are a lot of people who have jobs on the side that could utilize small commercial spaces that are rolled into their normal residential rent.

Impossible to build though with the current zoning. Even with the zoning, at the time (pre new community banks), your only option was a loan packaged through Fannie and Freddie. If you are a property investor with buildings under an LLC, it gets REALLY difficult to buy a property (I'll post details why later).

If zoning were changed to allow something like I described, or allowed me to building multi-units that I could rent out (cash flow positive) for around $1,200 (2 bedroom), I would almost never have a vacancy... even during a recession.

Thought I'd post a link to a great podcast interview with the Regional Plan Association about their report on how zoning and lending practices have changed our cities for the worse. Of specific interest to our neighborhoods is how and why you can't get an FHA loan for a property with a storefront. It has a strong relationship to our oppressive R-1 zoning making only the cheapest possible infill economic to build.

http://shoutengine.com/StrongTownsPod ... sing-finance-policy-16351

report:The Unintended Consequences of Housing Finance

Executive Summary
Growing numbers of young and old Americans prefer to live
in communities where they can walk to stores, school, services,
parks and public transportation. But federal housing rules make
it difficult to meet this demand. By capping the amount of commercial
development permitted in federally-backed mortgages
and programs, the rules make it hard to finance construction or
renovation of three-to-four story buildings in many mixed-use,
walkable neighborhoods. These rules, mostly devised for an
earlier era to reduce perceived risks to federal investments, have a number of unintended but damaging consequences.