Title
Neighborhood Scale Commercial Code Amendments Briefing
Recommended Action
Information only. No action requested.
Report
Issue:
Discussion on the Neighborhood Scale Commercial Code Amendments.
Staff Contact:
David Ginther, Senior Planner, Community Development, 360.753.8335
Presenter(s):
David Ginther, Senior Planner
Background and Analysis:
Neighborhood Scale Commercial has been envisioned to grow as part of the community for more than 20 years. The Sustainable Thurston plan (2013) had a goal that by 2035, 72% of region’s households should be within a half mile (10-15 min walk) to a urban center, corridor, or neighborhood center (20 minute neighborhoods). In 2014, 35% of households were within a half mile of a business. Staff did not find any new statistics, but it is unlikely that a significant change has occurred. This is due to the lack of new neighborhood scale commercial development.
The Neighborhood Centers Strategy Report was completed in 2024. The report found that the main obstacles facing neighborhood commercial development are financial feasibility (return on investment) and land availability. The study also found that there were barriers, such as zoning, that needed to be adjusted.
Comprehensive Plan:
In 2025, the City Council added a new policy to the Comprehensive Plan in support of allowing small scale commercial uses within residential neighborhoods.
PL24.6 Allow small-scale commercial uses within neighborhoods through conditional use permits until design standards are developed. Commercial uses in residential zones should be appropriately scaled and designed to serve nearby residents.
The narrative of the Land Use and Urban Design Chapter mentions small scale commercial several times. The following is an excerpt from the narrative of the chapter:
Small-scale commercial uses in neighborhoods will provide goods and services to nearby residents and will be designed to limit impacts to surrounding properties.
Community Guidance:
Community surveys/questionnaires have been provided to the community three times over the past dozen years. The results have been somewhat similar with the most requested land uses being bakeries, coffee shops, food stores, and small retail. The community indicated these should be small, community serving types of businesses, and impacts should be minimized by controlling some features of the businesses such as the size and hours of operation. The most recent questionnaire/survey was in September of 2026. 181 community members participated and provided 243 unique comments. The first draft of the amendments was created based on the initial community input.
Amendments Summary:
Types of businesses allowed:
• Restaurants and bakeries
• No bars but restaurants can serve alcohol
• Includes cafes and coffee shops
• Retail stores
• Personal services
• Includes barber and beauty shops, massage, pet grooming, etc.
• Excludes dog daycare and boarding of pets due to potential impacts
• Servicing of personal apparel and equipment
• Tailors, cobblers, bicycle repair, etc.
• Allow health and fitness
• Maker spaces, art studies, galleries, and creative workshops
• Counseling offices
Proposed regulations to reduce impacts and retain a compatible scale:
• 3,000 square foot limit for most uses
• Survey preference for 1500 sf limit on restaurants, retail stores, and personal services
• Pedestrian orientation:
• No drive-ins or drive-throughs
• Limit parking to five off street parking spaces
• Limited operating hours (7am-10pm)
• Limited outdoor storage locations
• Requirements to demonstrate how the project will reduce noise, light, glare, waste etc.
Climate Analysis:
The proposed amendments will allow small businesses to locate within residential neighborhoods. This is intended to provide options for neighborhood residents to obtain goods and services within walking/biking distance of their homes. This will likely reduce the number of vehicle trips that they might otherwise take to get the same goods or services from a business located further away in a commercially zoned business area. This could also reduce the need to own, operate, and pay for the expenses associated with an automobile.
Equity Analysis:
Equity is challenging to address in code amendments. The regulations apply equally across the residential zoning district designations regardless of where they are in the city. In some instances these regulations could provide opportunities for community members to start a business with a lower startup cost compared to a commercial location.
Neighborhood/Community Interests (if known):
A survey/questionnaire was made available to the community in September 2026. 181 community members participated and provided 243 separate comments and suggestions. Staff used the input received from this survey/questionnaire to draft the first version of the amendments. A summary of the survey, including all 243 of the comments, is available on the project webpage on Engage Olympia. City staff also attended a South Capitol Neighborhood Association meeting on October 21, 2026, and provided a briefing on the proposed amendments.
Options:
1. Receive the briefing.
2. Receive the briefing, discuss it, ask questions, and provide feedback to staff.
3. Postpone the briefing to a later date.
Financial Impact:
This is an internally funded project.
Attachments:
Draft Amendments (Annotated)
Public Comments
Survey/Questionnaire Results Summary
Engage Olympia Webpage