In the zone: Know the laws about home-based businesses

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Almost half of U.S. businesses are based in the business owner’s home, according to the U.S. Small Business Administration, and that number might grow as more people decide to go into business for themselves.
Those planning to launch a home-based business in New Mexico need to understand the zoning laws that apply in their area.
Depending on where one lives in the state, zoning laws are enacted by city or county officials.

A tale of two cities

The town of Mora in Mora County seems typical of many rural areas in New Mexico. It falls under the county’s Comprehensive Land Use Plan, approved in 2009. Mora County has only one zone — the Natural Resource District — which allows home-based “cottage industries.”
According to that document, “During the original 1994 planning process, residents valued their independence and private property rights and resisted any type of segregated zoning. Now there is some interest in implementing more detailed zoning districts … to prevent incompatible adjacent uses.”
On the other hand, Albuquerque, like many of the state’s larger cities, has strict regulations regarding home-based businesses.
Home-based businesses must register with the city’s Treasury Division and are subject to zoning laws that restrict signage and hours of operation.

What to consider

Zoning concerns rarely arise for home-based businesses with few visitors and no outside employees.
Noise, excessive traffic and use of the neighborhood’s parking spaces are what generate complaints from neighbors and attention from zoning officials.
A business that opens early and stays open late might disturb neighbors and  arouse understandable concerns about criminal activity.
A business owner can often avoid this problem by talking to neighbors about the business and negotiating reasonable hours of operation.
Zoning problems also arise when the business begins poaching on the home’s living space.
“Space percentage” is something that matters to zoning officials, and some cities limit how much living space the business can occupy.
Officials also want to know what type of merchandise is being sold or service provided at the home. The city of Albuquerque, for example, asks specifically whether the business involves medical or massage services or adult entertainment. Some cities might prohibit or restrict businesses in residential areas that involve hazardous materials.
Zoning laws also proscribe the size and types of signs that can be posted on the business property and where the signs can be placed.

Know before you start

Entrepreneurs should find out which government agency enforces their area’s zoning laws and learn what laws apply to home-based businesses. The planning department — city or county — is the place to start asking questions.
But zoning laws aren’t set it stone. If they seem too restrictive, an entrepreneur who works at home might find others who are willing to work toward making the laws more favorable to home-based businesses.

EDITOR’S NOTE: Don Bustos is the  director of the Small Business Development Center at Luna Community College.