How should a city manage residential development in a way that protects its historic manufacturing zones? Not surprisingly, perhaps, Donald Trump has exposed this planning dilemma with an opulent condominium-hotel tower designed by Handel Architects and David Rockwell, slated for a largely industrial block on the fringe of New York City’s trendy SoHo neighborhood.

The conundrum is as much architectural as it is economic. Although cities nationwide are welcoming residential development to create a 24/7 environment downtown, these projects often displace small-scale industrial uses that contribute greater tax revenues. Preservationists also complain that these buildings—usually glass-walled towers—are out of character with historic urban fabric.

Planners are exploring ways to limit or refocus new residential development. Chicago Planning and Development Department design director Bennett Haller sums up the thinking: “We’re trying to segregate residential uses from manufacturing uses because they tend not to live well together.”

Los Angeles’s planning department, for instance, is debating a cap on new housing in its industrial downtown by mandating a lower floor-area ratio. Despite successful loft conversions in L.A., a recent study shows that manufacturing zones employ nearly 1,000 people per acre. Not only is this much-needed capital, says veteran urban planner Ronald Shiffman, of the Pratt Institute, “small-scale manufacturers and people who work with their hands enliven old loft buildings.”

In New York, the Trump battle turns on a common zoning rule: Hotels may rise in manufacturing zones, but permanent housing requires special approval. Andrew Berman, head of the Greenwich Village Society for Historic Preservation, contends that Trump’s “hotel” will in fact furnish permanent apartments to elite buyers, so he is urging the Department of City Planning to require special review for it and other condo-hotels.

Berman also took a swipe at the design of many new residential towers—“The problem isn’t the size; it’s the glass,” he told Crain’s in March—but has since distanced himself from these remarks. “We judge every design on its merits,” Berman told record. “You never want to say, ‘there’s no way you could do this with this amount of glass,’ because that’s the work of the architect.”

Some observers worry about the rush to regulate. Paul Byard, FAIA, who has written on landmark buildings, contends that public authorities wade into subjective waters when they try to protect a neighborhood’s character. When it comes to solving problems like Trump’s SoHo tower, he says, “neither hysterical locals nor rapacious developers but something bigger than them” is necessary. What’s needed, in other words, is a process at least as democratic as The Apprentice.