State Policy Network

Allow Home-Based Businesses and Occupations

SPN Economic Recovery Toolkit to boost state jobs and economy

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The Problem

Zoning laws don’t match the modern, digital economy where home entrepreneurship is becoming normal and essential. Forty-seven states currently follow some form of The Standard Zoning Enabling Act—a product of the 1920s economy.

The coronavirus pandemic has proven that zoning laws need to be modern and flexible to avoid excessive restrictions on home-based economic activity, especially since the most affordable form of a startup is often a home-based business.

The State Solution

States should adopt the Home-Based Business and Occupation Act, which modifies a state’s zoning enabling act to allow home occupations and home businesses so long as they do not disturb neighbors.

Why This Matters

The American economy is facing a record level unemployed as a consequence of the pandemic recession, and most states are still working to recover jobs lost during the pandemic. As Americans have lost jobs or been forced to work remotely, homes have become new incubators for startups.

Entrepreneurs should not have to battle antiquated rules or face uncertainty about whether their home-based business is legal when they are forced to work from home. Excessive restrictions on home-based businesses don’t make sense during the pandemic, nor are they good policy outside of a pandemic. Entrepreneurs should be free to start businesses and pursue their occupation within their home so long as they are causing no disturbance to their neighbors.

What States Should Do Next

States should enact model legislation to amend their zoning enabling acts so as to legally protect home-based businesses and occupations.

Model Legislation

Home-Based Business and Occupation Act (Institute for Justice)

← Previous Solution: Create Regulatory Sandboxes

Next Solution: Food Freedom Act