Editor’s note: This is the second article in a three-part series discussing the City of Saint Paul’s zoning laws that severely limit where businesses can be located.
In last week’s article, I showed that the dearth of neighborhood-serving businesses in many St. Paul neighborhoods is not a result of bad luck or of impartial market forces, but rather the intended result of zoning rules that have effectively banned businesses in all locations where they didn’t already exist before. In this article, I’ll outline the biggest issues with this system.
Let’s start with the obvious: Walkable neighborhoods provide many benefits to their residents, which I briefly described in Part 1. Strict limitations on new commercial buildings disable neighborhoods from evolving into more walkable places and preclude all of those benefits that walkability provides.
But there are other, less obvious reasons why St. Paul’s strict limitations on the location of commercial buildings have negatively affected the city. Here are a few.
Inhibiting Small-Scale, Incremental Development
You may question whether St. Paul’s zoning rules really have disallowed new commercial buildings for 50 years. Many new commercial buildings have been built, such as near the Raymond Avenue stop on the Green Line and on Snelling Avenue south of Interstate 94.
Yes, that’s true. But most of those buildings were constructed at locations where commercial buildings already existed before the city enacted its strict zoning rules in 1975. In other words, most of these new buildings replaced other, smaller commercial buildings; they didn’t increase the number of locations where commercial buildings exist in St. Paul. And that’s the problem I’m focused on: the limited number of parcels or lots in St. Paul where someone could open a shop, a service business or a restaurant.
These buildings also illuminate another consequence of the strict limits our zoning rules impose on the location of commercial buildings: They inhibit “small-scale” real estate development.
Let’s return to Bole Ethiopian Cuisine at 1341 Pascal St. (featured in Part 1) to consider why. Imagine you own the house at 1463 Midway Parkway, immediately south of the restaurant. It seems an ideal location for another business that could serve folks from the neighborhood: maybe a corner store, a specialty retail shop, another restaurant with a patio in the yard or perhaps offices for attorneys, therapists or various other “office” businesses. For small businesses, there’s strength in numbers — a benefit to being located in a cluster with other small businesses with which you might share customers — and Bole is the only restaurant in the neighborhood.
But 1463 Midway Parkway is part of the H1 residential-only zoning district. You learn that in order for your lot to get rezoned, you’d have to present your case to an appointed citizen board called the Planning Commission. The process will likely take months and cost you lots of time and money; and in the end, there’s no certainty that the commission will approve the rezoning. You decide it’s no use even trying to rezone your property, and give up on the dream of starting a business there.
How many would-be entrepreneurs have been deterred from trying to open businesses in St. Paul’s neighborhoods because of restrictive zoning? How many dreams and great ideas weren’t able to get off Square One? I would bet that many more little neighborhood shops, cafes and restaurants would dot our city today, if not for the rigid policies that prevent them from getting started.
Now let’s turn from a hypothetical example of a “failure to launch” toward a real case study from the past year.
635 Cleveland Ave. S
According to a staff report, 635 Cleveland Ave. S has been a part of the “Office” zoning district since 1975; as the name suggests, this means that the two-story building with the goofy mansard roof at this address is allowed to house “office” commercial uses (like the internal medicine office that has resided here for years) but not “non-office” commercial uses like retail shops or restaurants. Last year, its owners had to pay a fee to request that their property be rezoned into the T2 district, which would enable them to open a retail shop on the ground floor; the shop would sell locally and nationally made Montessori educational products. They would still have medical offices on the second floor.
The building is just steps away from a vibrant commercial strip called the Highland Village, complete with several restaurants, retail shops, fitness studios, other medical offices and more. A few blocks north is another node of commercial spaces at Cleveland and Randolph avenues. The location is obviously well-suited to a variety of different uses, not just “office” uses.
Thankfully, this story has a happy ending: The Planning Commission granted the property owners’ request for a rezoning. But the story also illuminates the absurdity of our rigid and highly prescriptive zoning rules. It seems nonsensical to require the property owners to jump several hurdles just to get permission to use their building in a way that is so clearly well-suited to that location. And there seems little doubt that many would-be entrepreneurs would never bother to wade into a rezoning process at all because of the substantial barriers that these rules create.
Big Buildings, Big Banks, High Rents
By effectively requiring that any landowner looking to build a commercial space must first have their land rezoned, St. Paul’s zoning rules all but guarantee that the only people (or companies) that build commercial spaces in the city are those that can afford the time, delays and uncertainty entailed by the city’s rezoning process. Most of the time, these are large companies — the kinds that can afford attorneys, that get their financing from big out-of-town banks and that lease their commercial spaces to national chain tenants. (The Vintage on Selby at 1555 Selby Ave., pictured below, is a great example of such a building.)
I’m not arguing that this type of large-scale development is bad. In my opinion, new housing and new commercial spaces are almost always a positive thing: They are built in response to the need for more homes and more places to do business, and they generate much-needed property tax revenue for the city. St. Paul has many locations where these kinds of buildings ought to be encouraged.
The problem is that developers of buildings like these seldom build the kinds of commercial spaces that can be leased to local enterprises at relatively low rents. With relatively low development costs, a regular person could buy an ordinary house (like the one at 1463 Midway Parkway) and renovate it to become a commercial building; the costs of paying the mortgage, utility fees and other expenses would be much lower than the rent in a new building. (Mischief Toy Store on Grand Avenue, pictured below, is a great example of a local retail shop in a building that was once a house.)
Similarly, a person could build an “Accessory Commercial Unit” onto the front of a house at a relatively low cost; the business would be located in the ACU, and the main part of the house could continue to be a residence. (Dog Days Daycare and Boarding is an Accessory Commercial Unit on the front of what is — or was — a house at 1756 Grand Ave. W.)
A third type of relatively-low-rent commercial space is the good old corner store, like Minnehaha Grocery and Deli at 1818 W. Minnehaha Ave., pictured below.
The mom-and-pop developers who would be more likely to build those types of spaces cannot afford the uncertainty and difficulty that a rezoning process would present to them.
Small-scale types of commercial buildings have benefits beyond their relatively low rents, too. Precisely because they’re small, they can be built at scale: The relatively low cost of constructing one dramatically increases the number of people who could feasibly afford to build them. For me, they have an aesthetic appeal: A cluster of four or five eclectic residential-turned-commercial buildings are far more charming and interesting to walk past than a single, 200-foot-long building with four identical storefronts. And the relatively low-rent spaces within them are more likely to host niche, funky, local enterprises that so often become beloved fixtures of neighborhoods.
There’s also an (admittedly cerebral) argument to be made about power: It’s healthier for a city if many owners control its land and buildings. When a few big companies own large amounts of land and buildings in a city, the risk increases that those companies wield outsized influence on the city’s local politics (or that they flagrantly ignore local policies). Most city blocks in St. Paul are divided into dozens of small lots, controlled by thousands of different owners. At least in theory, this “fine-grained” design of the built environment is a bulwark against the possibility of concentrated power over land, and politics by extension.
Another benefit of small-scale commercial buildings is that they are generally more easily adapted over time than large commercial buildings are — not only between different types of commercial uses (different kinds of retail, offices, service businesses, etc.) but also between commercial and residential uses. A house that has been converted from a dwelling to a retail shop can easily be converted back to a dwelling, if that turns out to be the building’s best use again sometime in the future.
In last week’s article, I noted that this kind of agile adaptive re-use of buildings — not only from residential to commercial use, but also vice versa — was once afforded to property owners by right, without need of special permission. Unfortunately, this potential advantage has been preempted from all land and buildings in St. Paul zoned in the Residential-only or Business-only zoning districts, which is the vast majority of the city. If a person wants to convert the use of their land from housing to retail, or vice-versa, they have no choice but to endure the rezoning process.
Here’s an example of a case just like this from earlier this year.
25 George St. E
Until 2004, the land and buildings at 21 George St. E and 25 George St. E (pictured above) were a single property (according to a staff report). Then, the owner worked with the city to split the lot into two separate parcels. The first part (21 George St., which had a house on it) was zoned into a Residential-only zoning district; the second part (25 George St., which had a garage on it) was zoned into a “Business-only” zoning district. Exactly why 25 George St. E was zoned for Business instead of Residential is unclear, but perhaps it was because the corner lot immediately east (33 George St. E) was already zoned B1 and housed a corner store.
And so despite the fact that 25 George St. E seems a perfectly obvious location to build a house, its owner had to pay a fee to request that his property be rezoned into a district that allows residential buildings, wait several weeks and hope that his request would be approved. Thankfully, it was. But again, one wonders why this process was necessary at all — why the landowner wasn’t proactively given the flexibility to build either a house or a commercial building at this location.
Draining Staff, Volunteer Resources
Every time a landowner approaches the city to request that their land be rezoned from a residential zoning district to a commercial one (or vice versa), staff in the Planning and Economic Development department are obligated to spend time preparing and presenting a report on the proposed change to a 21-person board of volunteer residents called the Planning Commission. A zoning committee comprised of a subset of the Planning Commissioners holds public hearings about such rezoning requests, takes and considers public testimony, deliberates and makes recommendations back to the full Planning Commission. This process typically also entails seeking input from neighbors in proximity to the parcel in question, as well as whichever of the 17 District Councils the parcel exists in, which itself can generate work for an additional group of volunteer residents.
The Zoning Committee, as well as the commission itself, act in a “quasi-judicial” capacity, and must follow explicit state guidelines as to “findings” that must be “made” in order to grant such requests. The Planning Commissioners, in turn, spend time deliberating about whether to grant the landowner’s request. If a request is denied, landowners have 10 days to appeal the decision to the City Council, which can trigger additional layers of staff-time expenditure, Council deliberations, additional public testimony and hearings, and more. In total, these processes can cost dozens of hours of precious time to make decisions that our city once allowed landowners to make themselves.
I’ve already offered two examples in this article; here’s a third one.
639 Ohio St.
An old church building sits at 639 Ohio St. on the West Side (pictured above), built in 1940. According to a staff report, the building was used as a dance studio between 1980 and 2020, at which time it ceased operations. The land and building have long been part of a Residential-only zoning district, which allows small residential buildings and churches by right, but not commercial uses like dance studios. So back in the 1980s, the owners requested and were granted a “Nonconforming Use Permit,” which allowed them to open the dance studio without having to rezone their property.
The dance studio resumed classes in 2022. Evidently, they were informed sometime between 2022 and 2024 that since they closed the business in 2020 for more than a year during a global pandemic, their Nonconforming Use Permit had lapsed. They would need to go through all the steps and pay a fee to request the reestablishment of the Nonconforming Use Permit they had maintained for the preceding 40 years. Fortunately, the Planning Commission unanimously approved reinstating the Nonconforming Use Permit, but only after a lengthy and unnecessary bureaucratic process.
Could a case study cast the absurdity of these zoning rules in starker relief than this?
- Why should our city policies require city staff and planning commissioners to spend any time researching and deliberating and voting on whether to allow a business that has existed in a location for decades to continue there?
- And how is it that a business that has quietly inhabited a residential area without issue for four decades be labeled as a “Nonconforming Use” in the first place?
I doubt anyone believes that the rigid, highly prescriptive nature of our zoning rules about commercial uses are serving our city well. Yet we have continued to follow them for half a century.
I am not arguing against zoning in general. In some situations, our zoning regulations serve to protect the public interest and require property owners to request permission from the city to use their land and buildings in a particular way. But in cases like the ones I’ve highlighted above, the layers of process that our rigid limitations on commercial spaces have now required for 50 years seem like a colossally wasteful use of city staff time and taxpayer dollars — and, for that matter, the time and dedication of citizen volunteers on the Planning Commission.
St. Paul’s Planning and Economic Development department has a relatively small staff, and lots of important work to do. Just imagine all of the other worthy problems they could spend their time solving instead!
Conclusion
In this article, I have attempted to show some of the problems caused by St. Paul’s overly prescriptive zoning rules for commercial buildings. In next week’s final installment, I’ll share some hopeful signs that St. Paul is ready to modernize its commercial zoning rules, and I will offer suggestions for some specific updates the city could make.