Pop-ups can be a useful way for existing businesses to test the expansion of their business in new markets or for new businesses to test their products with limited potential for loss. In challenging retail markets, pop-ups can also help landlords “unlock” or monetize a space that would otherwise sit vacant. Pop-ups have gained more and more popularity and are now employed by a range of businesses, from big-name retailers to micro-manufacturers and independent craftsmen. Often, pop-ups bring an air of excitement to a retail district, as customers have come to expect a unique shopping experience (new and trendy products, unique design, or discount prices).
For pop-ups to be worth the effort to new and expanding businesses, the permitting and approvals process should be easier, faster, and cheaper than for traditional rezoning. Unfortunately, pop-ups often face a regulatory maze. In most cities, pop-ups are subject to the same (in some cases, tougher) land use, zoning, and licensing requirements as traditional retailers. A long and costly variance process will deter most businesses looking to set-up a pop-up.
Several cities have recognized the unique advantages of pop-ups: their ability to fill challenging vacancies and their ability to bolster new and existing businesses as they test out new products and new markets. These cities have helped new businesses create pop-ups by simplifying regulations, offering expedited services, funding retail incubators, and more.
BEST PRACTICE – Chicago, IL pop-up licenses
In July, Chicago passed an ordinance to create a pop-up license for small businesses. The license, the first of its kind in the nation, is not tied to a specific location, so business owners can choose to open anywhere in the city or roam between multiple spots during the duration of their license. Licenses are available for 5-365 days, are low-cost, and don’t require any on-site inspections. Landlords are not required to obtain a license to host pop-ups (with the exception of restaurants or cafes, in which landlords must apply for an inexpensive host-license). Lastly, existing restaurants are able to operate pop-ups without having to obtain the new pop-up license (or any additional approvals).
BEST PRACTICE – Austin, TX expedited permitting for pop-ups
In 2012, Austin changed the city’s code to make it easier to set up pop-ups for up to 90 days. They reduced permitting fees to $50, created expedited permitting days twice a week where business owners can apply for and receive a permit within 24 hours, and require minimal paperwork. They also streamlined the process for food trucks. Previously, businesses had to deal with multiple departments, but it was transitioned to a single, centralized permitting process.
BEST PRACTICE – Oakland, CA pop-up retail incubators
In 2011, Oakland worked with local business incubator Popuphood to create a retail incubator in Old Oakland (according to the New York Times, this was the first retail incubator in the U.S.). With the help and guidance on Popuphood, the City of Oakland Redevelopment Agency offered five businesses six months of free rent in a historic 3,000 sqft space, a city-owned building that was formerly a bank. Popuphood owner, Sarah Filley said coordinating opening several businesses at once was catalytic, both for the businesses and the area, “You can’t expect someone to go and set up shop in a transitional neighborhood and wait five years for it to come up around them,” she said in an interview. Several businesses transitioned from Old Oakland pop-up incubator to permanent retail space in the area, helping to revitalize a part of Old Oakland that had been struggling for years. The retail strip remains incredibly successful today.
BEST PRACTICE – Portland, OR food truck hubs on vacant lots
In 2009 Portland included provisions in the Economic Development Plan to encourage food trucks (essentially mobile restaurant pop-ups). In many cities, strict regulations make it difficult for entrepreneurs to start a new pop-up food truck (for example, in Boston, food trucks cannot be within 100 feet of an existing restaurant and are required to install a GPS tracker so officials can monitor their locations). In Portland, however, their 2009 plan specifically incorporated food trucks and included several measures designed to make operating their business easier; most notably, food trucks are not required to conform to local zoning and building codes (as long as they are on wheels). The plan encourages the use of vacant lots as food truck hubs or “pods,” deterring blight in those areas, and creating environments with a larger consumer draw. The city now has more than 20 food truck pods. Recently, the city of Portland eased regulations to allow food trucks to serve alcohol, which more than a third of food trucks now serve. Lastly, the city provides ample resources online and in person, including a detailed guide on the permitting process and a blog about updates to regulations.
Cities looking to activate vacant storefronts or revitalize commercial areas should consider following the lead of these cities: easing regulatory barriers, investing in retail incubators, or simply making the access to information more clear and easy to access.