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A building of pretend artists
How the exemption worked
The program was meant to give artists cheaper rent. A building got exempted from some zoning restrictions, and in exchange its tenants had to be artists. Over time the definition of artist loosened to cover anyone with a business that was remotely creative-adjacent.
The business license check
The city sometimes checked in to see whether everyone had bought a business license, which cost $50, and tenants without one got a grace period to buy it. What piled up in the building was a confetti of non-operating dance studios and LLCs for ostensible freelance writers who had day jobs at Dropbox.
What it left behind
City hall did not want its employees spending their days on the question of What Is Art. The arrangement modestly increased housing supply, and every tenant took part in a slightly grubby ritual of pretending to be an artist while working in tech.
How did artist-only housing zoning begin?
Artists began moving into empty industrial lofts in places like Manhattan's SoHo in the 1960s, even though the buildings were zoned for manufacturing and not for living. New York responded in 1964 with a zoning change that let certified artists live in such lofts legally. The city's Department of Cultural Affairs handled the certification, which meant a panel judged whether an applicant counted as an artist. Other cities, including San Francisco, later created their own live/work categories.
How do governments separate a business from a hobby?
In the United States, the IRS judges an activity by its profit motive, and registration does not settle the question. Its tests, written into the hobby loss rules of the tax code, ask whether the activity is run in a businesslike way, how much time goes into it, and whether the person depends on the income. An activity that turns a profit in at least three of five years is presumed to be a business. A business license only records that a person registered with a city.
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