Zoning ordinances are laws that govern activities in townships and other municipalities. Most cities and towns are composed of regions that are zoned for residential, commercial, or industrial development, and often these zones are subdivided by additional use restrictions (type of business permitted, etc.). Zoning laws and ordinances may affect such varied issues as parking for customers, setbacks, access for deliveries, the number and types of employees permitted, and the use of signs or other forms of advertising. These ordinances have to be considered by entrepreneurs/business owners wishing to set up, expand, or relocate business establishments. They should check with their city's zoning office and licensing board for restrictions that may apply to the city, or even to their particular neighborhood, prior to finalizing any business plan.
ZONING AND COMMERCIAL BUSINESSES Review of zoning ordinances for areas designated for commercial and/or industrial use is a standard procedure for entrepreneurs seeking to establish a business in such places. In most cases, establishing a business in a building that was previously used for commercial purposes will not run afoul of zoning ordinances for the area. Experts warn, however, that businesses seeking to construct a new facility, acquire an existing building for a new use, or launch extensive remodeling efforts should closely examine local zoning and building codes. In instances where local zoning laws present a problem, the business owner has the option of filing for a zone variance, a conditional-use permit, or a zone change. All three of these options have their drawbacks.
A zone change amounts to a permanent change in the zoning classification of the property. This is obviously desirable, but the procedure to successfully trigger such a change is generally a cumbersome one that goes through City Hall. After all, bids for reclassification are based on claims that current zoning is in error or no longer reflects the character of the neighborhood. Many municipalities are reluctant to accept such arguments. Variances and conditional-use permits, meanwhile, are in essence requests for special permission to use the property for a purpose other than for which it was zoned. Such permits are often expensive to obtain and can take two to four months to go through if they are even approved. But they are usually easier to obtain that outright zoning changes.
ZONING AND HOME BUSINESSES Checking into local zoning ordinances is a step often overlooked by owners of home-based businesses as well. Such neglect can prove troublesome down the line, for as Janet Attard noted in The Home Office and Small Business Answer Book, "zoning laws are established locally, often at the township, city, or village level. Furthermore, each town or village decides for itself what types of home businesses it will allow. Thus in one community you might be able to run a home business that has up to two employees while in another community the same business might be restricted from having any employees. In still another community you might be able to have a homebased business if you are a fisherman or carpenter but not if you are a real estate agent or insurance broker."
Most zoning ordinances restricting home offices in residential neighborhoods were originally designed to protect residential neighborhoods from becoming cluttered with commercial activity and thus maintain the family-friendly flavor and atmosphere of the area. In the past, these laws often were strictly interpreted to keep residents from conducting any sort of business from their home, even if it did not have a visible impact on the rest of the neighborhood. Today, the explosion in home-based business start-ups has sparked a reevaluation of zoning laws in residential areas, but many of the old zoning laws remain on the books.
It is widely recognized that millions of home-based businesses operate for years in violation of zoning laws, and that many of those businesses prosper without ever running into problems. Indeed, many communities simply ignore violations unless a neighborhood resident or someone else complains. These complaints may be triggered by utterly trivial factors—unhappiness with the frequency with which you mow your lawn, for instance, or anger about some real or imagined social slight—but in the eyes of the law, the motivations behind the complaint will generally be of little consequence. "You cannot assume … that it is OK for you to disregard local law because some town boards don't enforce regulations and some people get away with operating on the sly," said Attard. "If there are laws prohibiting your type of home business, it will only take one complaint to plunge you into a pot of legal hot water."
Attard, Janet. The Home Office and Small Business Answer Book. Henry Holt, 1993.
Barhight, G. Scott, Jennifer R. Busse, and David K. Gildea. "Get the Lay of the Land Before Buying Property." Baltimore Business Journal. December 8, 2000.
Barlas, Stephen. "Zone Defense." Entrepreneur. February 1998.
Hardin, Pamala M. "Keep Your Firm from Zoning Out: Running Your Business from Your Basement May Get You Zapped with Hefty Fines." Black Enterprise. March 1996.