The Kansas City Startup Village permit issue: explained

Two weeks ago, a small army of Kansas City entrepreneurs descended on the Planning Commission meeting in Kansas City, Kansas. Here’s why. Entrepreneurs are not known for their patience, and a room full of them listening through appeals on sign location was a strange sight. Their sudden interest in the zoning laws, however, was the…

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KCSV “Villagers” during a recent cleanup day. Credit: KCSV

Two weeks ago, a small army of Kansas City entrepreneurs descended on the Planning Commission meeting in Kansas City, Kansas. Here’s why.

Entrepreneurs are not known for their patience, and a room full of them listening through appeals on sign location was a strange sight. Their sudden interest in the zoning laws, however, was the result of an ongoing struggle to find “work-life balance” in the Spring Valley neighborhood, where tension between entrepreneurs and long-time residents have come to a head, as the Unified Government of Wyandotte County (UG) decides whether to renew a special use zoning permit at 4428 State Line Road.

How Kansas City Startup Village started

There wasn’t any fanfare or a community meeting to mark the first day of the Kansas City Startup Village (if you’re a local, the KCSV or “the Village”). And there certainly wasn’t a strategic outline or plan that governed the dozens of entrepreneurs that came to live and work out of the houses and workshops near 45th Street and State Line Road, straddling the line between Kansas City, Kansas, and Kansas City, Missouri.

In September and October of 2012, shortly after Google announced its intention to power the Spring Valley neighborhood with gigabit Internet service, Leap2 (now Leap.it), FormZapper, Local Ruckus and EyeVerify moved into commercially-zoned houses and workshops in the area.

At the same time, Ben Barreth was blogging about his idea to combine the business development opportunities promised by Google Fiber with our biggest native asset, Midwestern hospitality. In Ben’s estimation, convincing Kansas City homeowners in Google Fiber-serviced areas to open their spare rooms to out-of-town entrepreneurs hoping to take advantage of gigabit speeds would attract fresh ideas and talented techies to the area.

The founding of the Hacker House

When Ben decided to put his money where his mouth was by cashing in his 401(k) to buy the Village’s “Hacker House” at 4428 State Line Road, he set the Village on its current course. That day, Ben pioneered the idea of attracting startups from around the country (and the world) to start and develop their businesses in Kansas City’s Spring Valley neighborhood.

Ben went before the planning commission and obtained a special use permit for his Hacker House (necessary, as multiple home-based businesses would be run out of the same location). He personally vetted and interviewed applicants and selected winners of a three-month stay in the house, rent-free.

Over time word spread, and “Villagers” began to meet regularly at the Kauffman Foundation to identify opportunities for collaboration and publicity for their businesses and for Kansas City. The meetings began to attract people who didn’t live or work in the Village, but who wanted to contribute to Village efforts.

Some volunteered to conduct tours or host “Fiber tourists” from around the world in their homes. Some even bought houses, including angel investor and serial entrepreneur Brad Feld. Some of these houses went through the same process that Ben did, getting special use permits and appearing before the zoning commission and some didn’t.

Growing pains

Today over 20 companies are spread throughout the area. Some of the companies are small—just one or two co-founders working out of a tiny house. Some are not—the biggest Village company, EyeVerify, recently moved its 20+ employees out of the Village and into a bigger space downtown. When it “lived” in the Village, EyeVerify worked out of a small commercial building along 45th Street, but with no parking lot, the employees were forced to park anywhere they could find a spot, including along residential Cambridge Street.

Over time, the neighbors began to feel as though startups had taken over their neighborhood—with complaints ranging from parking struggles, to groups of strangers wandering through the area as a part of the Village tours, to cigarette butts being tossed on their lawns, to fear of Ben’s activities grounded in a misunderstanding of the word “Hacker.”

Today, the Village is better organized and more formally run than ever before. A nonprofit organization has been formed to organize resources and raise funds for the Village’s educational and community building activities (Full disclosure: I’m a board member). A top priority for the board has been preparing to assist Village companies in becoming and staying compliant with city codes and regulations, and self-policing to ensure that we’re being respectful to our neighbors.

Permits must be approved every 2 years

The history of the Village as a grassroots, de-centralized effort has made it difficult for the city to direct complaints to the right place, challenging to govern from within, and impossible for neighborhood groups to communicate with.

It’s no surprise then that when the first bureaucratic opening to lodge a complaint publicly came up during the hearing on the renewal of Ben’s special use zoning permit, both entrepreneurs and neighboring residents took to the Planning Commission meeting to make their respective cases.

Over time, the neighbors began to feel as though startups had taken over their neighborhood

According to the existing regulations and legal precedent set by the U.S. Supreme Court, up to five unrelated persons may live together in a single housing unit as a “family unit” and run one home-based business (with the proper licenses, of course). ‘

Any situation involving more than one business being run out of the same house (even if the activities don’t substantially differ from what they would include if people were simply living together, like typing on a laptop all day), employees “commuting” in to the location to work at the house, but not live there, or any external indication that might indicate a business is run out of the location all require a special use permit, recommended by the UG Planning Commission and granted by the County Commissioners.

This means Ben’s proposal, which includes a handful of unrelated people living together, running multiple businesses out of the same location, must seek a special use permit, up for renewal every two years.

Final vote to be held April 30th

By all accounts, Ben’s Hacker House residents have been respectful and good neighbors. Ben’s purchase and clean up of the property has, as the property’s immediate neighbor wrote in a letter to the UG Planning Commission, likely raised neighboring property values.

But the struggles of the Village and the neighbors to find an acceptable “work-life” balance have spilled over into what otherwise might have been a clean and uncontroversial permit renewal.

Neighbors unhappy with the lack of parking in the area came to the Planning Commission meeting with a petition signed by 40 area residents; Villagers presented a petition signed by nearly 150 entrepreneurs that have been impacted by the KCSV’s work.

In the end, the Planning Commission voted to recommend renewal of the permit, which will now appear before the UG Commissioners on April 30th for a final vote.

What makes a great neighborhood?

The issues are legal and regulatory, but perhaps the more important debate is about what truly impacts an area’s quality of life. Is it more important for a neighborhood to encourage long-term residents to put down roots and live quietly and comfortably? Or to encourage startups and young idealists to disrupt the status quo by testing, failing and ultimately growing an entrepreneurial ecosystem?

The answer, of course, is both. The nuance lies in deciding which side to err on.

If it were me, all biases previously disclosed, I would easily renew Ben’s permit, based on the approval of his immediate neighbors. But I would likely, as the UG is already taking steps to pursue, work with the Village board to establish a plan and criteria for fast-tracking future special use permit requests in a way that both ensures the vitality of a residential neighborhood and cuts through regulatory red tape to avoid slowing the pace of innovation.

The Village is lucky to have the support of an engaged entrepreneurial community, and the neighborhood is lucky to have residents committed to maintaining a high quality of life. The best possible outcome for the Village and the Spring Valley neighborhood is a greater emphasis on cooperative growth, and a focus on building a better city together.

IMG_0290Melissa Roberts is a long-time KCSV “feeder,” a member of the board of the Kansas City Startup Foundation, and enjoys working at the crossroads of entrepreneurship, technology and politics. Professionally, she runs Free State Strategy Group, a public affairs consulting firm and serves as the Marketing Director at the Enterprise Center in Johnson County

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