Commercial Real Estate in Kensington: Two Small Business Areas, County Zoning and Local Taxes

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

Kensington is a small, unincorporated hillside community above Berkeley and El Cerrito. Its commercial property is limited to two compact clusters: a strip of shops, offices and services along Arlington Avenue, and a handful of storefronts at Colusa Circle near the El Cerrito line. Buildings rarely come up for sale, and every change runs through Contra Costa County. Confirm a parcel’s zoning, development plan and permit history with the county before you commit.

Who controls the parcel

Three agencies matter in Kensington:

Contra Costa County. The Department of Conservation and Development sets zoning and issues permits under Division 84 of the county code.
Kensington Municipal Advisory Council (KMAC). County hearing notices describe KMAC as reviewing building permit applications in Kensington and recommending approval or denial to the county. Hearings are held in person and on Zoom at the Kensington Community Center at 59 Arlington Avenue or the library at 61 Arlington, according to a March 2026 notice and an August 2026 notice.
Kensington Community Services District (KCSD). Contra Costa LAFCO’s 2023 directory lists the district, then called the Kensington Police Protection and Community Services District, as covering 0.97 square miles and about 5,428 people. It provided police, parks and recreation, and solid waste collection. Its June 2026 fire tax resolution notes that the Kensington Fire Protection District was dissolved and annexed into the KCSD.

Colusa Circle sits right at the El Cerrito boundary, so some nearby storefronts may be inside El Cerrito, with city zoning and a city transfer tax. See our El Cerrito commercial guide.

Kensington zoning for commercial and mixed use

We could not confirm from an official map which county districts are mapped on Kensington’s business parcels. The county districts most likely to apply to small neighborhood shops are listed below, along with the overlay that covers the whole community.

District	Intended uses	Notes
N-B Neighborhood Business	Day-to-day shops and services inside enclosed buildings, such as bakeries, delis, salons, drugstores and professional or real estate offices	3,500 sq ft lot; 50 ft height; 3+ apartments and gas stations need a land use permit; development plan required
R-B Retail Business	Retail inside enclosed buildings	Outdoor sales and auto uses need a permit
A-O / O-1 Office	Offices	Chapters 84-46 and 84-44
P-1 Planned Unit	Uses set by a development plan	Check for any approved plan
-K Kensington Combining District	Extra review of building size, views, privacy and light	Commercial buildings that meet code are exempt from -K review

The -K district and what it means for commercial owners

The Kensington Combining District, Chapter 84-74, dates to Ordinance 2004-46 and has been amended several times since. It protects neighbors’ views, light, solar access, privacy, parking and noise. Its key features:

Commercial exemption. Commercial buildings, churches, public buildings and schools that meet all code requirements are exempt from -K review. Work inside an existing building that does not expand its envelope is also exempt.
Floor area threshold. For homes, a public hearing is required when gross floor area exceeds a threshold tied to lot size. A 6,000-square-foot lot, for example, has a 2,700-square-foot threshold. KMAC notices for 279 Colusa Avenue (2,800 square feet) and 153 Lawson Road (3,600 square feet) show the thresholds in use.
Neighbor rights. Neighbors within 300 feet are notified, and anyone can request a hearing within 34 days.

For a mixed-use building with apartments, or a conversion from commercial to residential, the exemption may not apply. Ask the county early.

Other rules for Kensington business property

Hillside building. Kensington’s slopes push many projects into variances. The August 2026 KMAC notice for a lot on Highgate Court sought three setback variances and a permit to remove two protected oaks. The design stayed under the county’s 35-foot height limit.
Parking. Parking is one of the impacts the -K district protects, and street parking near Arlington Avenue is tight. Expect questions about parking for any new use that brings more customers.
Cannabis. Kensington is not one of the nine areas in the county’s -CE Cannabis Exclusion district, but county cannabis rules and permits still apply.
Short-term lodging. Rentals under 30 days need a county permit under Chapter 88-32.

Transfer tax, business tax and property tax

Transfer tax. Unincorporated Kensington has no city transfer tax. The Contra Costa Clerk-Recorder collects the county’s $0.55 per $500, and lists city taxes only for El Cerrito and Richmond. A parcel just over the line in El Cerrito pays El Cerrito’s added tax.
KCSD police tax. The district’s Resolution 2026-11 sets the 2026–27 supplemental police tax at $486.45 per parcel for commercial and institutional property, $324.30 for single-family homes and $97.29 for vacant land. District voters approved it in 2010.
KCSD fire tax. A separate special tax inherited from the former fire district is placed on the county roll each year.
Property tax. Under Proposition 13, a sale generally resets the assessed value.
Business license. We did not verify a county business license tax for general businesses; ask the county Treasurer-Tax Collector.

Due diligence that matters in Kensington

Start with our commercial due diligence checklist, then add:

Confirm the parcel is in unincorporated Kensington and not El Cerrito or Berkeley.
Get the base zoning and any P-1 development plan from the county.
Confirm whether planned work qualifies for the -K commercial exemption.
Check KCSD special taxes on the property tax bill.
Review parking and any past variances for the building.
Plan for KMAC review on discretionary work.

Questions people ask

Where is commercial property in Kensington?

In two small clusters, along Arlington Avenue and at Colusa Circle.

Who approves projects in Kensington?

Contra Costa County, after review by the Kensington Municipal Advisory Council.

Does the -K district apply to commercial buildings?

Commercial buildings that meet all code requirements are exempt from -K review.

What special taxes apply to commercial parcels?

The KCSD supplemental police tax is $486.45 per commercial parcel for 2026–27, plus a separate fire special tax.

Is there a Kensington transfer tax?

No. Only the county’s $0.55 per $500, unless the parcel is in El Cerrito.

Who provides police service?

The Kensington Community Services District.

Does Diamond handle commercial property in Kensington?

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

Sources & notes

County Ordinance Code via GoCodebook: Division 84, Chapter 84-74 (-K), N-B, R-B, -CE, Chapter 88-32
KMAC hearing notices: 279 Colusa Ave., March 2025, 153 Lawson Rd., March 2026, Highgate Ct., August 2026
Contra Costa LAFCO, Directory of Local Agencies, Section 3 (July 2023)
Kensington Community Services District: Resolution 2026-11 and Resolution 2026-12 (June 11, 2026)
Contra Costa Clerk-Recorder, Documentary Transfer Tax

Note: We did not confirm which base districts are mapped on the Arlington Avenue and Colusa Circle business parcels, or the fire special tax rates. The KMAC notices cite the -K rules as Chapter 82-74.2; the code publisher lists them as Chapter 84-74.

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

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