HOME OFFICE : Businesses Are Guided by Zoning Regulations, Common Sense

Home businesses are booming in Orange County.

Irvine professionals are battling the recession by moving businesses into their homes, Orange entrepreneurs are setting up shop in their garages, Fountain Valley retirees are earning supplemental income from home offices, and across the county, stressed-out commuters are working at home.

In Irvine, Kurt Mowery, senior management analyst for the city, said, “We have a large contingent of home occupations, and it’s growing. Of 7,117 in-city business permits, 1,839 are for home businesses as of June, 1992.”

Among Orange’s 12,000 business licenses, 21% are for home occupations, according to Lynn Cam, the city’s business services coordinator. “During the 1991-’92 fiscal year, 30% of new licenses were for home occupations,” Cam said.

Fountain Valley’s Connie Morris said the city does not have exact figures, but “the number of home businesses is substantial.”

Kathy Becknell of Pacific Bell’s Business Customer Service Office said that, countywide, requests for business telephone service at residences have increased significantly in the past year.

“Our market research shows there are 1.7 million home offices in California,” said Linda Bonniksen of Pacific Bell’s Media Relations Department.

Tom Massey of General Telephone and Electronics said, “Our research indicates that about 20% of U.S. households meet our ‘work at home’ market definition of entrepreneurs. They work more than three hours per day at home.”

To be a legitimate home business, you must have a business license and, in communities such as Irvine, an additional Home Occupation Permit. In the cities sampled, business licenses and related permits are issued by the city’s finance or administration department, but the rules pertaining to home businesses are set by the zoning section of the planning department.

In Fountain Valley, it’s a home office if it’s your only business location or if it’s the business address on your tax return, according to Morris.

In Orange, Cam said she relies on fictitious name statements, phone directory listings and other sources to identify home business locations and will send an inspector, if necessary, to determine whether there is a business in a home.

Business license fees and the basis for them vary widely, but you can get an initial business license for about $75 in most cities and can renew a basic license for between $35 and $75 annually.

Not all businesses are appropriate or permitted in a home, thus the licensing requirement.

The business license offices of some cities will mail or fax a business license application and related matter, such as Fountain Valley’s Standard Home Occupation Conditions flyer.

The terms permitting a business in the home are fairly uniform from city to city. They are intended to protect the rights of residents to engage in certain home occupations that are harmonious with a residential environment.

In general, they state that home businesses must be:

1. a secondary use of a residential dwelling;

2. an incidental and accessory use of the residence, and

3. conducted under conditions compatible with the neighborhood.

When you apply for your business license, you are required to answer a variety of questions about your business and its location. The application is reviewed to determine whether the business is appropriate for a home location and whether it conforms to zoning requirements. In Orange, for example, the review process takes approximately three weeks because of the number of departments involved.

The zoning restrictions on home businesses also are similar and fairly simple from city to city.

Although city governments seem to welcome home businesses, some communities within cities do not. Homeowners’ associations have the power to forbid home businesses if they are not permitted under the association’s covenants, conditions and restrictions.

Trea Sparrow, president of Marquis Management Group, a Santa Ana property management firm managing more than 250 homeowners’ associations, said, “Whether a home business is permitted in a community is determined by the CC&Rs.; So far, it’s not been a problem because the documents take care of it. If a problem were to arise, it would be dealt with at the homeowners’ association level.”

Cyndi Brandefine, a district manager with Marquis, said, “I’m sure there are things going on we don’t know about--people selling real estate, operating little businesses--but it’s never become an issue.”

At Jasmine Creek Community Assn. in Corona del Mar, Carol Procella said her association’s CC&Rs; forbid a business in the home, and it’s not a problem there. “I’ve never heard of anyone blatantly attempting to circumvent the CC&Rs;,” she said.

Ed McCullough, president for the past three years of North Park Bluff Homeowners Assn. in Newport Beach, said, “I know in our association we have homeowners with businesses in their homes, but it has never come before the board. It could be a problem if a person had regular pickups and deliveries or a lot of traffic to their door.”

Whether at the city or neighborhood level, common sense and common courtesy are the prevailing criteria for an acceptable home business.