Expand opportunities to run a business at home
Home-based businesses offer an accessible pathway for entrepreneurs to start small in their own homes and contribute to the local economy, but onerous restrictions can hold people back.
The first step to jumpstarting the economy is allowing people to run their businesses from where they are. For many people right now, that means their homes.
Why should cities support home-based entrepreneurs?
Home-based businesses offer flexibility to entrepreneurs and provide important opportunities for women, minorities, and veterans. The fact that so many people are successfully working from home during this pandemic shows that home occupations are safe—and necessary. City officials should recognize the importance of these small ventures, which contribute to local economies and offer an accessible pathway for entrepreneurs to start small in their own homes.
How do local regulations hold home-based entrepreneurs back?
Entrepreneurs may be subject to onerous local zoning regulations that can make it difficult to operate.
- In DC, home businesses cannot exceed 25% of floor space or 250 square feet, whichever is less. This means an event planner with a work desk in the living room might be breaking the law by taking a conference call in the bedroom.
- Cities like Boston and Boise limit the number of non-resident employees for home-based businesses, even if those employees work remotely. These restrictions prevent home-based businesses from growing and creating jobs for neighbors who could help in the home or work remotely on administrative duties like tracking sales. Many startups might already be breaking this law without realizing it.
- Many cities have outdated restrictions on storing equipment or goods in the home, which could create issues for someone who wants to make homemade jewelry to sell on Etsy, for example.
What can I do to support home-based entrepreneurs in my city?
- Remove unnecessary restrictions on how businesses can operate inside of the home: Square footage restrictions and employee limitations restrict the normal activities of many businesses. Pittsburgh does not limit home-based businesses by square footage.
- Don’t complicate existing regulations on negative impacts outside of the home: Existing municipal regulations likely protect health and safety and prevent neighborhood disruptions without targeting home occupations. Cities should refer to these restrictions rather than creating special requirements for home occupations. Seattle, for example, takes a less restrictive approach that relies on existing noise ordinances and parking rules to ensure that home-based businesses aren’t nuisances.
- Simplify home-based business registration: If necessary, permit requirements should be easy to understand, follow, and enforce. Home occupation permits should be no more complicated than a simple requirement to register. San Antonio exempts home-based businesses from certificate-of-occupancy requirements and does not require them to register or get permits. Simplifying the process might make businesses currently operating without a license more likely to register their businesses.
- Improve communication between government entities: Local licensing agencies and zoning departments should coordinate code enforcement priorities and pass along knowledge to home-based business owners. Agency staff should be trained to help applicants comply with county and state requirements that may apply to the business, like occupational licensing, tax registration and corporate registration.
By enacting these reforms in your city, you can foster economic opportunity in communities that need it most.
IJ’s report, Finding the American Dream at Home: How Home-Based Businesses Benefit Entrepreneurs and Their Communities, details how home-based businesses make entrepreneurship possible for people of different socio-economic circumstances, all while making meaningful contributions to the economy and society at large.
Let’s get to work in your city.
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