Converting Commercial Real Estate to residential real estATE
In California, converting commercial properties such as offices, warehouses, or retail spaces into residential units has become an increasingly attractive solution to address housing shortages and revitalize underused areas. The process, however, is not uniform across the state and requires careful navigation of zoning laws, building codes, and environmental regulations in each city or county. Below are the general steps a property owner can anticipate when transitioning commercial real estate for residential use.
Generally, rezoning a commercial property to residential in California follows a four-step process:
Investigate local zoning regulations: The property owner reviews the jurisdiction’s zoning code and general plan to confirm the site’s current land-use designation and identify any special requirements or restrictions in the applicable county or city.
Submit a rezoning application: File a formal zone change request with the local planning department, often including site plans, environmental review documents, and supporting studies.
Present the proposal to decision-makers: The application is typically reviewed by planning staff, planning commission, city council, and/or county board of supervisors.
Await the final decision: If approved, the zoning map is updated to reflect the new residential designation in public records.
Each jurisdiction sets its own development standards, review procedures, and timelines, which can dramatically affect the feasibility and speed of a project. This is evident in Los Angeles, where the Adaptive Reuse Ordinance (ARO) has played a transformative role in a property owner’s process of transforming commercial property to residential.
Rezoning Commercial Property to Residential in Los Angeles, California
Under ARO, Los Angeles’ existing commercial buildings constructed before July 1, 1974 are deemed eligible for meeting zoning code requirements, including height, floor area, yards or setbacks, parking and loading spaces, and open space, without bringing the building’s features into strict conformance. The ordinance allows any configuration of units and unit sizes, the addition of new floor levels within the existing structure, and the creation of shared amenities for residents. It also permits the construction of new one-story rooftop structures for uses such as fitness rooms, lounges, or shaded roof terraces, provided these are accessible to all residents or guests, without counting them as new floor area. In Los Angeles, commercial buildings that do not meet this age threshold under ARO require approval by a Zoning Administrator.
Examples of ARO revitalizing and reusing older buildings are present in various parts Los Angeles. The Pegasus Apartments were originally built in 1949 as the Mobil Oil/General Petroleum Building and were converted into 322 residential units in 2003. The National City Tower, constructed in 1924 as the National City Bank building, was rezoned and converted into 93 residential units in 2008. The Spring Arcade Building, built in 1924 as a commercial shopping arcade with two twelve-story towers, was adapted into 143 residential units in 2010.
How Blake Law Firm Can Help
Rezoning can be a key strategy for unlocking a property’s full potential. Blake Law Firm assists property owners in leveraging strategies, like converting commercially zoned buildings into prosperous residential hubs. Our attorneys are available to help evaluate commercial real estate opportunities such as transforming vacant offices into apartments or condos to revitalize neighborhoods and help property owners maximize the value of their assets.