In the old days, when shopkeepers lived above their stores and blacksmiths lived behind their shops, homes and workplaces were often connected.

Then came the car, suburban migration and commuter culture. Home was home, work was work, and never the twain did meet -- unless the boss was coming for dinner.

But in today's economic climate, that old model is making new sense. With jobs vanishing and budgets shrinking, self-employment is on the rise, and home is a cost-effective place to launch a start-up. About 5.7 million Americans worked primarily at home in 2008, up from 4.2 million in 2000, according to U.S. Census Bureau data.

To attract today's home-based entrepreneurs, some developers are creating new takes on old housing options: storefronts on the street with apartments behind, or buildings designed to accommodate clients in hallways and business signage outside.

Live/work housing is popular in New York and California, although the concept has been a slower sell in Minnesota. "It's taking a while to catch on," said Katie Visina, property manager for Uptown Lake Apartments, which includes some live/work units. "No one understands why there are two doors, one to the street and one to the apartment."

"People seem to struggle with it [the concept] -- some don't get it," agreed Tony Smith, project manager for SOHO (Small Office, Home Office), a former nut factory converted to condos in Minneapolis' North Loop. The project was designed to include two floors of live/work units, but so far, only two units are being used that way, he said.

Living and working in the same place can be challenging, according to those who do it, but for many the positives outweigh the negatives. "Starting a new business in a time of recession is risky," said Ashley Powell, who launched *A/star, a model and music agency, with the help of her boyfriend, Ben Anderson, in their live/work unit last August. "But if you're smart about it, it's actually the best time. We needed a way to combine everything and save money, but make sure the business is taken seriously."

Kim Palmer • 612-673-4784