SoHo and NoHo have wonderful walkability, residential amenities and a variety of businesses. But few New Yorkers know that without special permission, only artists and manufacturers can legally locate here.

Our zoning hasn't been updated in almost 50 years, but the neighborhood has clearly changed. As a result, the majority of residents and small businesses must have special permits or variances. This is no way to bolster a district.

SoHo and NoHo need the correct zoning to protect our landmarks, ensure that residents can live legally in their homes and open our community to businesses that want to grow and invest.

Homeowners and entrepreneurs who helped create this neighborhood cherish it deeply. But zoning that doesn't accommodate its residents and businesses makes planning for the future harrowing.

Without coherent zoning that fits current uses, problems arise. Properties operate with different permits and variances—or in some cases illegally—because zoning rules are inconsistently enforced. Today a wide range of building uses don't comply with the old manufacturing zoning. Issues such as trash pickup, delivery schedules, streetlights and even noise are difficult to regulate.

Commercial zoning in SoHo and NoHo hasn't been overhauled since the 1970s, when wholesale textile and manufacturing companies were already on their last legs. Ground-floor retail is largely illegal without a special permit. So are most residential uses for those who are not certified artists or subject to special carve-outs.

That means the majority of residents here are illicit occupants despite paying taxes, maintaining their buildings and voting. Most can never be certified artists, which is the only legal residential category allowed in a manufacturing zone. These outdated requirements and exemptions, which grandfathered in some residents but not others, must be changed.

The failed policies depress home values, as some buyers choose other neighborhoods because of regulatory uncertainty. Why purchase a loft in SoHo or NoHo when you can live without restrictions in Tribeca or Chelsea?

We can maintain a robust community for artists in SoHo and NoHo while legalizing all other residents. As an art-gallery owner and a homeowner, we help make up the fabric of this community. More retailers, whether they sell artists' wares or other merchandise, are welcome here.

Companies in SoHo and NoHo today employ more than 65,000 workers including many proud union members. The workers rely on the businesses in this neighborhood for their livelihoods. More than 25% of workers in the neighborhood are part of fast- growing creative industries.

To support this existing economic engine, we must create a fair, straightforward environment. In this difficult time for retailers, business owners need flexibility. Many leave retail spaces in SoHo and NoHo because they don't want to deal with obtaining special permits (an expensive, three-year process) or risk operating without the right paperwork. Many lawyers advise clients to locate elsewhere.

Meanwhile, vacant storefronts invite graffiti and litter, depleting revenues for cooperative and condominium boards. The sublet fees and tax shares paid by retail tenants are crucial to protecting upstairs residents, including artists, from unaffordable increases in taxes and maintenance costs.

Businesses need clear standards and reasonable regulations to grow their companies here. But fixing this mess isn't just a matter for planners or architects. It must involve the community.

It is time for the city to work with local stakeholders to put outdated policies and inaction behind us.

Margaret Baisley is a SoHo co-op owner and a real estate lawyer. Susan Meisel owns an art gallery in SoHo.