Zoning Issues: What You Need To Know

hboAcross the country, millions of home-business owners are forced to lead undercover lives. They are justifiably fearful that if they operate in the open and inform their neighbors or local authorities of their business, they could run up against local zoning laws that prohibit such enterprises.

This was aptly demonstrated during a recent Home-Based Business Expo, at Elgin Community College, near Chicago. About 60 entrepreneurs chose to list only their phone numbers–not addresses–in the Expo’s directory. “Some of them are doing business in ‘no home business’ zoning districts,” said Hilma Nelson, a work-at-home graphic designer who lives in an area of Elgin that allows such home-based business activity. She is also founder of the Home-Based Business Owners’ Group, the sponsor of the expo. “People don’t want to be found out,” Nelson said.

The city of Elgin, like many other communities across the country, is now engaged in an ongoing debate about liberalizing its home-business ordinance to permit homebased businesses in previously restricted zones, but such a move is not without controversy. Residents fear that permitting home businesses could disrupt the tranquillity of residential neighborhoods and turn them into commercial zones.

Among the issues the Elgin City Council has grappled with are how many people can be allowed to visit a home office in a day and how many vehicles can be used in conjunction with a home-based business. The proposed wording is, “No more than eight visitors associated with the residential-based occupation shall be allowed within a 24-hour period. No more than two such visitors shall be allowed to visit at the same time.”

As to vehicles, the council has proposed “No more than one motor vehicle shall be used in connection with a residential occupation,” and “Such vehicle shall be limited to customary and traditional private passenger motor vehicles.”

“These kinds of rules make no sense to me,” said Terri Murphy, a Realtor in Chicago, who works from home herself. “My mother has more people than that coming over for coffee.”

Nevertheless, concern over traffic was the main reason Evelyne Simon, a management consultant, was recently put out of business. Last year, as she began setting up her home office in New Rochelle, New York, a suburb of New York City, some neighbors started to complain about increased traffic and parking around her house. The city’s zoning commission informed Simon that since there was no provision for a management consultant in the city’s home-business ordinance, she would have to shut down.

New Rochelle’s ordinance, which was written in 1921 and underwent a major revision in 1955, does allow for the offices and studios of architects, artists, lawyers, doctors, milliners, as well as dance and music instructors.

Simon’s attorney argued before the zoning commission that a management consultant “would certainly affect the neighborhood far less than the practice of physicians, lawyers, and dentists who are regularly visited by patients and clients, and music and dance instructors who are explicitly permitted groups of four students.”

Even the city’s director of buildings, Louis Goodman, concedes that the code needs updating. “With archaic businesses such as milliners still on the books,”

says Goodman, “obviously the code needs to better reflect the times.”

In the past, municipalities like New Rochelle used a laundry list of permitted occupations. With advances in technology and the creativity of home-business operators, it is practically impossible to predict what new professions might arise. As a result, most new ordinances simply set standards for how large a business can be and what effect it can have on a neighborhood.

The Simon case, which is still pending, highlights the evolving nature of home business and its impact on zoning issues, as such disputes are taking place in large and small cities across the country.


The city of Chicago technically prohibits all home business. It allows only professional consultation or emergency treatment in home offices. The reality is that full-time businesses are in operation in residential areas all over the city. “Lots of people operate businesses regardless of what the ordinance says,” said Graham C. Grady, the city’s zoning administrator. “It’s rarely enforced unless a neighbor complains.”

In the last few years, a growing constituency began asking the city to liberalize the law. Spearheading the effort was Ida Bialik, owner of the Women in Business Yellow Pages of Metro Chicago. “The people I talk to don’t want to hide anymore,” she says. “At first the city was totally unresponsive, but once Illinois Bell started allowing employees to work from home, the city knew that the work environment had changed dramatically.”

She and others eventually managed to persuade the zoning department to rewrite its ordinance to allow a wide variety of home businesses with certain limitations. A draft of the proposed ordinance is now circulating to interested parties for their input. It is expected to go before the city council as this article goes to press.

Similarly, Los Angeles, often considered to be on the cutting edge of social and political issues, has been slow to condone home businesses. “Right now nothing is permitted, except doctors’ offices on a part-time basis,” said Patricia Ialongo, a Los Angeles city-planning associate. A proposal to change the ordinance “has been in the hands of upper management for some time,” Ialongo says. “And it applies only to single-family zones. We left out multiple zones [those with apartment buildings] because we believe those areas are dense enough now.”


Many homeowner groups have opposed the proposal, believing it will turn neighborhoods into commercial zones. To prevent this, communities sometimes set standards on how a building’s appearance can be altered. Some ordinances, such as those in Bellevue, Washington, and Mount Prospect, Illinois, forbid signs or any other indication that business is being conducted inside. Other municipalities, such as Eau Claire, Wisconsin, limit the owner to one sign, no bigger than one square foot, mounted flush against the wall or visible through a window. The sign may not be illuminated.

According to a report on home business by the American Planning Association, an ideal ordinance should be flexible enough to allow an owner to incubate a small business, but firm enough to push a full-fledged enterprise into a commercial zone. One way to accomplish this is to limit the percentage of space that can be dedicated to a business. The maximum is usually 25 percent.

Another common limit is on the amount and type of storage permitted. Mount Prospect, Illinois, allows storage of up to 100 cubic feet of inventory indoors, about enough to fill a closet. Bellevue, Washington, like many other communities, prohibits any outdoor storage of materials.


One of the most contentious issues in home-business zoning debates is the number of employees who can work in the home. Chicago’s proposed ordinance limits employees to family members living within the home. “To me that makes no sense,” said Gary J. Rovansek, president of Reliable Corp., a Chicago firm that markets electroplating  to businesses. He was asked by the city to critique the latest draft of its proposed ordinance. “Under that restriction, I couldn’t employ my own daughter, because she doesn’t live with me.” He also didn’t like the prohibition on retail sales from the home. “Does that include cosmetic and insurance salespeople?” he asked. “I could see not having a factory, but what impact does an insurance salesperson have.’?”


In some areas of the country, however, the idea of home business has been enthusiastically embraced. Whole subdivisions have sprung up where people live and work. Market Place, in Oak Creek, Wisconsin, consists of 20 homes custom-built to accommodate home occupations ranging from dentistry to crafts. In Foresthill, California, a subdivision was designed to include a teleport containing a computer and modem. When the developer ran into money problems, the plans had to be scrapped. Nevertheless, such activity suggests that the opportunity to work from one’s home is being viewed as an asset that can enhance the market value of a home. In fact, many people believe that zoning away the ability to work from one’s home can impair property values.

One community has even experimented with a dual-zoning technique that accommodates both residential and commercial uses. In the Van Rancho development in Lynwood, Illinois, one-acre housing lots are zoned residential in the front and commercial in the rear. Village officials, who were skeptical at first, have found that the large lots give the neighborhood a country atmosphere, and the commercial component is hardly even noticed.

Such successes don’t surprise Tern Murphy, the Realtor from Chicago. “If people have the ability to work from their home and make money, it will probably mean they’ll be able to make improvements on their property that can only add value to the surrounding community,” she says. “What does it matter to other people if I can support my family from home? Trying to stop me makes no sense at all.”


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