There’s No Place Like Home: How Zoning Restrictions Prevent Home-Based Entrepreneurs from Growing Their Businesses
Anyone who has ever sold cookies baked in their own kitchen or visited a tutor’s home knows the value of home-based businesses. Being able to start small without the expense of renting commercial space allows entrepreneurs to experiment with new ideas before spending their savings on an idea that might not work out. Many home-based business owners cherish the freedom and flexibility of working from home, while others have relied on these micro start-ups as a lifeline during the COVID-19 pandemic. 1
But for many entrepreneurs, zoning laws that limit client visits or on-site sales, restrict how much space a business can occupy within a home, or even ban non-resident employees make starting a business impossible.
Additional hurdles like parking requirements, restrictive limits on operating hours, or even the need to acquire a conditional use permit pose more challenges to home-based business owners—and together, become a hefty price tag and burdensome process, which can make the legal path unappealing at best, or entirely inaccessible. For example, in Jacksonville, Fla. it costs $1,588 and takes 19 steps—including a conditional use permit—just to start a tutoring business from the home.
In Boston, Newark, and San Francisco, home-based tutors would likely be prevented from even starting up at all, as zoning rules prevent these kinds of businesses from having client visits.
Ironically, the harmless nature of the vast majority of home-based businesses is so intuitive that entrepreneurs are often unaware of these regulatory burdens, creating a situation where business owners are at risk of unknowingly violating local ordinances.
At best, these restrictions add unnecessary costs (both in time and money) as entrepreneurs jump through hoops simply to work in their own homes. At worst, they cripple what could otherwise be a flexible, adaptable form of work for millions of Americans—from bakers and artists to consultants and programmers.
Returning citizens already face overwhelming challenges, both economic and social, when they reenter the workforce after serving their time in prison. But in many cities, those challenges can be exacerbated by rules that make it even more difficult for those with records or debt to start their dream job or business. Take Yohance Lacour. While in prison, Yohance picked up leathercraft—a skill he loved that gave him hope for what his future could look like. After his release, Yohance decided that he would go into business for himself, producing luxury shoes and leather goods that represent a style he had been developing since he was a boy growing up on the South Side of Chicago. But there was a problem, one that Yohance had not anticipated: While he was incarcerated, he had been assessed parking and towing fines related to a car that was in his name, but he never received notice of the fines because he was incarcerated. And because he technically owed money to the city of Chicago, officials there refused to issue him a business license under an obscure law—referred to in other jurisdictions as “clean hands”—that forces entrepreneurs to resolve even small amounts of debt to the city before starting a business. Yohance’s journey to small business ownership was cut short. Even after resolving the fines, Yohance found understanding the city’s complex regulations for starting his business to be a difficult task: Officials failed to communicate requirements clearly, and there were no step-by-step guides designed for applicants who were just starting out. To support entrepreneurs like Yohance, cities should remove barriers to entry, such as “clean hands” laws, that place burdens on returning citizens and residents from disadvantaged communities. They should also ensure that resources on how to navigate red tape are available for those who may not be able to hire lawyers or expediters.