Commercial activities take part in a commercial districts of the city. There are eight commercial districts (C2-C8) in NYC, all with different functions and requirements. C1-1 through C1-5 and C2-1 through C2-5 districts are considered commercial overlay districts (rather than commercial districts) and they are located within residence districts.
An overlay district is an area that is placed upon existing zoning and can change, supersede and supplement this zone. It can also be part of a new zoned area, or a combination of two zones. The overlay district thus expand the boundaries of existing zoned areas, or have the same boundaries with its base zoning. A commercial overlay located in residential district needs to obey both the functions and requirements of its underlying zone as its own. (Garvin, 2001)
The floor area ratio (FAR) of the commercial overlay can vary from one residential district to another. For example, FAR is 1.0 when commercial overlays are located from R1 to R5, and when they are located from R6 to R10 the maximum commercial FAR is 2.0.
Usually, the necessity for more off-street parking is required if the numerical suffix is low. For instance, a big food store located in C1-1 districts would require one parking space per 100 square feet of floor area. However, C1-5 districts do not require any parking and are well served by transit.
Commercial overlays are mostly located along the streets in low and medium density areas, serving retail needs. Examples of retail services can be neighborhood grocery stores, restaurants and beauty salons. C2 districts can offer a little more uses, like funeral homes and repair services. Commercial uses are restricted to one or two floors, and they are always required to be located below the residential floors in mixed buildings. (NYC City Planning)