Zoning Issues For Home Based Businesses

Before you decide to operate your business from your home, first determine if doing so would break any local zoning ordinances.

Home-based businesses make up roughly half of all U.S. businesses, but at the local level, zoning laws and prohibitions have presented home-based businesses with a significant entry barrier. The good news is that over the last decade or so, there has been broad movement by local governments to adopt provisions that allow home-based businesses in residential zones. In the past, most local zoning laws either restricted the type of businesses allowed to be conducted in residential areas or banned commercial activity entirely unless the business received an exception or variance.

Even so, current zoning codes still have a number of restrictions on home-based businesses.

Physical Changes and Visibility. Zoning codes often:

Prohibit exterior physical changes to the home for the purposes of conducting business

Prohibit outside business activities, storage, or displays, and/or

Restrict or prohibit signage or commercial vehicles.

Traffic. Most zoning codes:

Restrict the numbers of visitors to a home-based business,

Restrict the number of employees working in the home or prohibit employees altogether, and/or

Restrict business parking or require that additional parking be provided.

External Effects. Most zoning codes:

Restrict or prohibit nuisance impacts (e.g., noise, odors, glare), and/or

Prohibit use or storage of hazardous materials.

Business Activities. Many zoning codes prohibit certain types of businesses in residential areas.

Most zoning restrictions are the same across a city, township or county. In some cases, zoning restrictions may exist for different types of business within residential areas. Also, in some jurisdictions, complying with zoning restrictions may include applying for and then obtaining a permit. For example, in Montgomery County, Maryland, anyone who operates a home-based business which generates more than five visits to the site per week, or who provides a non-resident employee, must register his or her business.

Make sure you have a basic understanding of local zoning ordinances. Zoning laws are determined by your city or county government. Find out which government agency enforces your zoning laws, and learn the specific laws that apply to operating home based businesses.