Easy, I don't know if any jurisdictions have this notion, but most people would agree that industrial buildings are less pleasant than commercial buildings which are less pleasant than residential.
Forbid people from building factories in commercial zones, or restaurants in residential zones without permits, but don't impede the reverse. If people want to live in an industrial zone, let them.
Sure there are downsides to this, a developer could buy up part of an industrial zone and build houses on it, which might reduce the efficiency of the industry around it, and would require the residents to petition to have their area rezone to avoid someone building a paper factory next to their elementary school. But as discussed, there are downsides of the current approach.
Japan has something similar to this. You can build buildings of a higher restriction (residential being more strict then industrial) in a lower restriction zone.
I'm in favor of this, but to play the devil's advocate - what happens to the 20% that remains after 80% of an industrial zone has been converted to residential?
Forbid people from building factories in commercial zones, or restaurants in residential zones without permits, but don't impede the reverse. If people want to live in an industrial zone, let them.
Sure there are downsides to this, a developer could buy up part of an industrial zone and build houses on it, which might reduce the efficiency of the industry around it, and would require the residents to petition to have their area rezone to avoid someone building a paper factory next to their elementary school. But as discussed, there are downsides of the current approach.