Is Your Home Zoned for Business? How to research, comply with and change local zoning laws in your homebased business's favor
Opinions expressed by Entrepreneur contributors are their own.
Putting the finishing touches on your logo design. Making those last few important calls. Chatting proudly with your next-door neighbor about your brand-new business, which is set to open its theoretical doors in approximately one week. Ah, there's nothing quite like getting started with your own homebased business.
Until, of course, your next-door neighbor-whom you don't know all that well-decides to get busy wondering whether you're allowed to operate your business from home in your neighborhood. She puts in a few calls to the local zoning board. She complains that there'll be a lot of added traffic on your street as a result of your business. Before you know it, you've got your local zoning board breathing down your neck-nd your business is stopped in its tracks before you even get a chance to go to work in your slippers.
The fact is, unless you've taken the time to thoroughly investigate your city and county zoning regulations, you're leaving yourself wide open to the type of scenario mentioned above. Your business could be shut down before it even sees the light of day-or, worse, shut down when you're already in business. To help prevent that from happening, we've put together this simple guide to researching, complying with and, if necessary, fighting your local zoning laws.
Start at the Beginning: the Zoning Office
The first step is to call or visit your local municipal building and ask to see copies of the ordinances that apply to home occupations, says Christopher Hansen, founder and president of the Home Based Business Council Inc.. "Avoid the word 'business' at all costs," he says-that's an instant red flag for zoning officials. "And, be cautioned, there are more ordinances than just zoning: There's mercantile, vendor, fire, etc."
"Start at the lowest level," adds Beverley Williams, founder of the American Association of Home-Based Businesses, once a membership organization for homebased businesses and now a small-business portal. If you rent, look at the lease to see if there are any restrictions on operating a business from your rental. If you own and are part of a homeowners' association, check what the covenants and restrictions are for your association. In incorporated cities, those laws usually supersede any county laws. If they don't, check with your county board on any regulations. "Generally that's the highest level-states generally don't get involved," says Williams.
Many municipalities also maintain Web sites outlining their ordinances. Says Hansen, "Many towns are placing their entire code book online so they can reduce the amount of time employees spend looking up information for the public and the media."
If you do need to make a call, try to do so from a phone line outside your home, advises Hansen. Tell the person you contact that you're thinking of buying a home in your hometown and that you want to know all the regulations pertaining to a home occupation, and describe your home occupation. "The feedback will be almost instantaneous in most cases," says Hansen. "They'll either say that they're permitted under such-and-such grounds, or they'll say they're not permitted without a variance."
Asking for a Special Exception or a Variance
If your homeowners' association doesn't allow for your type of business, you can ask for what's called a "special exception" hearing, depending on the type of business you want to operate. "In some cases, people are given the exception, especially if there's no outward sign and no clients coming [and going]," says Williams.
It's generally the "no-impact" businesses-those that don't produce traffic, outside visitors or outside evidence that there's a business on the premises-that get the special exceptions. "If you can prove 'no impact,' you have a better chance of getting a special exception. More and more now, [it's] given," says Williams. Here's a case where your neighbors might actually come in handy-if you have good neighbors: You can ask them to write a letter in your favor, detailing the ways your business doesn't impact their lives.
If your municipality is the problem, you can apply for a variance to operate your business. This isn't an easy process, however, so be prepared for a fight. "Applying for a variance is a time-consuming, costly and usually futile effort," says Hansen. "For nearly all the hundreds of people we've counseled, the average cost has been $5,000, and the results were usually the same: no variance. In addition, for those unfortunate few who have successfully obtained variances, the cost of victory was higher than for defeat."
The other drawback to a variance is that if you get one, your home becomes a commercial site, subject to unannounced fire inspections at any time of day or night, without a search warrant. "The fire marshall can fine you for extension cords, lack of fireproof doors and curtains, and any other commercial fire code violation," says Hansen. "They've required homebased business owners to install fire doors between their work area and the rest of the house. Plus, as a commercial location, the homebased business may be required to comply with OSHA, ADA and other commercial regulations.
"Oh, and the other thing they won't tell you at the variance hearing-your variance can be rescinded at any time, without notice, if a neighbor happens to complain. So you could conceivably spend the $5,000 for the variance, up to $50,000 to install ramps, toilets, fire doors, sprinkler systems, etc., and have the variance revoked overnight."
Sound like a nightmare? It is. That's why some business owners don't even bother checking into, or attempting to comply with, zoning laws-a fact that doesn't surprise Hansen: "In many cases, you'd be much better off remaining ignorant, as opposed to shining the light on your homebased business," he says. "In conversation with hundreds of mayors, governing body members and state legislators, [I've found] they all agree: Don't ask, don't tell." These leaders know that 40 percent of all households have a homebased business and that few of them cause any problems. "They don't want to change the laws against them because they believe these ordinances are the only viable way to keep homebased businesses from getting out of hand."
Williams maintains that you should "absolutely" investigate zoning laws in order to head off potential problems-and a potential closure of your business-later. "Even if the answer is no," she says, "you have the option of starting outside the home, or you can move."
While Williams mentions instances in which she's helped facilitate changes to ordinances, Hansen maintains that it's a losing battle. "Don't fight. Surrender," he says. "It's a losing cause until enough people get behind the cause for changing zoning laws."
Still, if Williams has seen some changes happen, it can't be impossible. "Try and fight for changes," she urges.
And don't think that the zoning laws that do exist are all designed to make your life hell. On the contrary, they can actually be useful. "Let's say you have some deliveries a few times a week and someone decides to complain," says Williams. "The zoning office will probably contact you to find out if you're operating within the zoning laws." If you can produce receipts on the number of deliveries, and you're operating legally, then there won't be any problems.
These laws can also help maintain the very neighborhood in which you live-a neighborhood that you presumably want to keep peaceful. "Zoning laws are an excellent means of protecting individuals from the real and potential harm caused by occupations and businesses run at home that are incompatible with the peace and safety of a neighborhood," adds Hansen. "As such, zoning laws that prohibit noise, traffic and numerous other public nuisances are a real safeguard for communities. But few of these type of zoning ordinances exist."
If you really want to inspire change, take a look at the model ordinanceat www.hbbc.org, and use it as a point of comparison with your own city or county zoning laws. What could be changed in your community? What are you willing to fight for?
Karen E. Spaeder is a freelance business writer in Southern California.