ZONING | The Profound Economic Impact of Form-Based Codes
Giving small businesses an edge is only the beginning.
Written By Vaneesha Patel
Imagine a citizen who has seen a need for a local café near her neighborhood. She decides to open this café herself when she finds out her neighbors also wish they had a local place to meet. After some research, she realizes that there is no available land nearby that is zoned commercial. In fact, supply is so limited that one of the last commercial spaces was sold at a price far outside of her budget.
Meanwhile, a lot is sitting empty on the corner, but she can’t purchase it under traditional zoning. If this citizen’s city had form-based codes, she could have. Form-based zoning is a practice that divides land based on physical form and scale rather than its intended function or use.
The restrictions that result from land being zoned by use have disproportionately negative impacts on small businesses and those looking to start them. Big-box retailers and franchises have the financial capabilities and the lobbying power to change the designation of land to suit their needs. As small business owners often do not have the same resources, they are limited to expensive commercial properties. Under form-based codes, small business owners would have access to a larger supply of land at fairer prices.
That isn’t the only way that form-based zoning benefits small businesses. With fewer regulations, the freedom to start a company anywhere within a city can also help business owners avoid their competitors. With form-based codes, entrepreneurs can situate their business where competition is favorable and demand is high—without being restricted by land use.
Form-based codes don’t just help small businesses. They also improve the public realm, which includes streets, sidewalks, trees, and gathering areas outside of built spaces. By emphasizing walkability, sustainability, and aesthetics, form-based codes contribute to a public realm that is friendlier to customers and more likely to encourage them to spend more time in retail spaces. Investments in the public realm have also been shown to have a variety of positive impacts, including increasing land and property value and helping areas regain market strength through sale prices and turnover rates for commercial property, both of which are important as we recover from the turmoil of the COVID-19 pandemic.
With areas that make use of form-based codes generating $65 million more in tax revenue when compared to areas that do not, it is clear that the implementation of form-based codes has profound economic impacts. To help small businesses stay competitive while generating economic growth for the communities they call home, cities should start by implementing form-based codes.
Vaneesha Patel was the Spring 2023 Mencken Publishing Fellow on Urban Development.