TLDR: Cities are allowing developers to re-zone retail units that go un-leased. They can then be converted into live-work studios so people can run businesses from home ie. an artist running a home studio, a massage therapist taking clients, a home daycare, etc. Seems this could really help with California’s chronic housing crisis.
In California, it’s not unusual to see single floor retail being replaced with five (or more) residential spaces over a single floor commercial space, especially where there is significant housing demand. Higher density, nearby customers, and less need for excess parking.