Commercial Real Estate in Piedmont: Zone D, Use Permits and Mixed-Use Rules

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Piedmont is an almost entirely residential city surrounded by Oakland, and it has very little commercial land. What it has is in Zone D, the commercial and mixed-use zone, which covers a small Civic Center area along Highland Avenue and a strip along Grand Avenue at the Oakland border. Every business there needs a conditional use permit approved by the Planning Commission and City Council. Many uses common elsewhere are banned outright. Before you buy or lease, confirm the subarea and the use permit path with the Planning Division.

Who controls the parcel

The City of Piedmont regulates land under Chapter 17 of the City Code, which divides the city into five zones:

Zone A: single-family
Zone B: public facilities
Zone C: multifamily
Zone D: commercial and mixed use
Zone E: estate residential

The City Clerk keeps the official zoning map. The city’s zoning page asks owners to confirm their district with the Planning Division. Many Grand Avenue storefronts that people think of as "Piedmont" are actually in Oakland, which has very different zoning and taxes, so check which side of the line a building sits on.

Piedmont zoning for commercial and mixed use

Zone D, Division 17.26, is the only zone where business uses are allowed beyond home-based work.

Item	Civic Center subarea	Grand Avenue subarea
Intended uses	Pedestrian-oriented, neighborhood-serving retail, office and services; mixed use with housing above	Same
Height	45 ft	45 ft; 35 ft within 10 ft of a single-family lot, plus a daylight plane
Ground-floor commercial height	15 ft minimum	12 ft minimum
Setbacks	None, except 4 ft from a single-family lot	5 ft on Wildwood, Sunnyside and Linda; on Grand, the greater of 5 ft from curb or 3 ft from the lot line; 4 ft rear
Landscaping	No minimum	10% minimum
Lot size	No minimum; lots cannot be split smaller	Same

Use type	Status in Zone D
Neighborhood-serving retail, office and service businesses	Conditional use permit
Commercial part of a mixed-use project	Conditional use permit
Religious assembly; large family day care; wireless facilities	Conditional use permit
Housing above ground-floor commercial	Permitted, 20–81 units per acre
Manufacturing, wholesale, distribution, industry	Prohibited
Auto sales and service (except minor servicing)	Prohibited
Hotels and motels	Prohibited
Fast food and drive-throughs	Prohibited

What the mixed-use rules require

Zone D projects must put neighborhood-serving retail, office or service space on the ground floor. Housing is not allowed on the ground floor except for a lobby or entry. The city waives that requirement for buildings where every unit is deed-restricted for at least 55 years as affordable to households at or below 80% of area median income.

In a mixed-use project, nonresidential FAR is capped at 0.75. Commercial floor area also cannot exceed half the residential floor area. A redevelopment here is mostly a housing project with commercial at street level. Owners pick a density within the 20 to 81 units per acre range.

The city’s 2023 Housing Element implementation report notes that ABAG approved Zone C and D land along Grand Avenue as a Priority Development Area on September 8, 2023. That designation can help with regional planning and transportation funding.

Home businesses, rentals and other local rules

Use permits for every business. The city’s zoning page states plainly that anyone doing business in Zone D must apply for a conditional use permit. The permit goes to the Planning Commission and then the City Council. A change of tenant or use often means a new permit, so leases should allow time for it.

Short-term rentals. Under Division 17.40, short-term rentals are allowed only in a single-family home that is the primary residence of the owner or a long-term tenant. Each needs an annual permit, $1 million in liability insurance, a minimum two-night stay and no more than 60 rental days a year. ADUs, multifamily units and SB 9 units cannot be used. Room rentals and short-term rentals also need a city business license.

Residential zones. In Zones A and E, business use is limited to what residential uses allow. New commercial buildings are not an option there.

Transfer tax, business tax and property tax

The Alameda County Clerk-Recorder collects Piedmont’s city transfer tax of $13 per $1,000 of full value, on top of the county’s $0.55 per $500. A $3 million Grand Avenue mixed-use sale would owe $39,000 in city tax alone. Under Proposition 13, a sale generally triggers reassessment. Piedmont businesses, short-term rentals and room rentals pay a city business license tax under City Code Chapter 10, but we did not verify its rates.

Due diligence that matters in Piedmont

Start with our commercial due diligence checklist, then add:

Confirm the parcel is in Piedmont, not Oakland, and whether it is in the Civic Center or Grand Avenue subarea.
Get the current conditional use permit for each business, along with its conditions and any expiration.
Check the planned use against Zone D’s prohibited list.
For redevelopment, test the 20 to 81 units per acre range, the ground-floor commercial rule and the 0.75 commercial FAR.
On Grand Avenue lots next to single-family homes, check the 35-foot step-down and the daylight plane.
Budget the $13 per $1,000 city transfer tax.

Questions people ask

Can I open a business anywhere in Piedmont?

Only in Zone D, and every business there needs a conditional use permit from the Planning Commission and City Council.

What businesses are not allowed in Piedmont?

Manufacturing, wholesale, auto sales and service, hotels, motels, fast food and drive-throughs are prohibited in Zone D.

What is Piedmont’s transfer tax?

$13 per $1,000 of full value, plus the county’s $0.55 per $500.

How tall can a Zone D building be?

45 feet. On Grand Avenue, it drops to 35 feet within 10 feet of a single-family lot.

Can a Zone D building be all residential?

Generally no. The ground floor must be commercial, except in buildings that are 100% deed-restricted affordable housing.

Can I run an Airbnb in Piedmont?

Only in your primary single-family residence, with an annual permit and a limit of 60 rental days a year.

Does Diamond handle commercial property in Piedmont?

Contact Matthew Martinez to discuss buying, selling or leasing commercial property in Piedmont.

Sources & notes

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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