PALO ALTO, CA-University Avenue, the main downtown strip here, is strikingly livable. Small retail stores – bookstores, dry cleaners, coffee shops – line the street, lending the area an unusual charm. City Council members have preserved that charm by restricting office space on the ground level of buildings there since the early 1980s.

Now, given the region-wide shortage of office space – and the fact that office space commands much higher rents than retail – the City Council will consider Monday an expansion of the office space restriction to other city streets including El Camino Real and Middlefield Road in order to protect smaller businesses from being squeezed out by high-tech companies willing to pay more for the space. Retail space in Palo Alto currently commands $4-$5/sf per month, while office space goes for $7-$9 monthly.

If the retail-preservation ordinance were enacted, it would likely not be in effect until February. Meanwhile, both San Carlos and Redwood City have placed restrictions on “dot-com” office development in their downtown areas.

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