From the January 1999 issue of Startups

At first glance, New Jersey seems a highly unlikely place for the nation's first statewide law affirming the legality of homebased businesses. After all, the Garden State is better known for its industrial and manufacturing sectors.

But deeper examination reveals the basis for this homebased business movement. According to the Home-Based Business Council Inc., entrepreneurs start 6,000 homebased businesses monthly in New Jersey. These businesses can be found in 40 percent of the state's households and contribute $15 billion annually to the state's economy.

"We introduced the [Home-Based Business Promotion Act] because this is the way the economy is growing. A lot of people in my neighborhood have offices in their homes," explains Joseph Azzolina, the Republican assemblyman who sponsored legislation. The measure, which requires municipalities to allow selected categories of homebased businesses to operate without needing any special permission, passed the Assembly and was under consideration in the state Senate at press time. The law as it now exists typically requires homebased business owners to go before a planning board to obtain permission to operate in residential zones.

Passage wasn't easy, says Chris Hansen, president of the Home-Based Business Council. "The legislation was first introduced in spring 1997 in both houses. In the Assembly, it went to the floor, where it was approved. In the Senate, it died in committee." The proposal was re-introduced during the 1998 session in the Assembly.

The chief opponent--the New Jersey State League of Municipalities--believes the act circumvents home rule. "The legislation mandates that homebased businesses be allowed [to exist] and provides standards and circumstances for 566 municipalities," says the league's executive director, William G. Dressel. "You can't take boilerplate legislation and impose it on 566 diverse municipalities."

According to Dressel, the league has proposed an alternative law that states that "every municipality has to consider having homebased businesses; and they all have to look at their master plans and make provisions for homebased businesses." Under the league's proposed legislation, municipalities, not the state, would decide whether a business would have permitted or conditional-use status. If they needed a conditional-use permit, homebased business owners would have to periodically appear before planning boards for ongoing approval.

Basically, the league is saying you have to get permission to work in your home, counters Hansen. "[They say] the requirements were just being suggested, but we think they were really etched in stone, and they send a message saying, `We don't want you to work at home; and if you do, we're going to charge you for it.' "

Although ostensibly the Home-Based Business Promotion Act is a local bill, Azzolina sees it as model legislation which could be a harbinger for cities, towns and homebased entrepreneurs across the nation.

Contact Sources

Home Based Business Council Inc., (800) 619-3282, fax: (732) 775-2038

New Jersey State League of Municipalities, (609) 695-3481, http://www.njslom.com