State lawmakers are trimming the ability of cities and counties to keep people from running businesses out of their homes.
On a 32-25 margin Monday, the House approved legislation that carves out an exception to existing local ordinances which spell out where individuals can — and cannot — sell products and services in residential areas.
To get an exemption from local rules, a business would have to be operated by the homeowner and anyone else in the immediate family, with no more than two employees who do not live there.
SB 1387 also says there cannot be more than one client on the premises at any one time. And the business would have to generate no on-street parking or any substantial increase in traffic through residential areas.
Rep. Jeff Weninger, R-Chandler, said the legislation is based on complaints by some people that their efforts to operate something as simple as an accounting service are being thwarted by unfair and burdensome local regulations.
“What about the freedom to start your own business and break through on your own and not have to depend on somebody else to give you that break or give you that leg up?” he asked.
Weninger said it’s a matter of practicality.
He said someone who might want to start his or her own firm does not want to take the risk of signing a lease of three years or more for commercial space at $2,000 a month. Those leases, Weninger said, usually require a personal guarantee.
And if the business falters after the first year?
“You’re going to owe that landlord $24,000,” he said, with the landlord obtaining a judgment on the former tenant.
“You’re credit’s going to be wrecked,” Weninger said. He said allowing someone to start and run a business at home is “giving these people who are poor, undercapitalized, a chance at the American dream.”
Weninger said the measure still leaves cities with some authority to use zoning laws to govern what can and cannot occur in someone’s home. And nothing in the legislation trumps rules of homeowner associations that can have their own limits on business.
But some other legislators were skeptical of overriding local rules.
“This takes away a tool a city might have that helps me as a homeowner,” said Rep. Kelli Butler, D-Paradise Valley. “We want people to have the freedom to start their own businesses, but not at the expense of their neighbor.”
Rep. Ken Clark, D-Phoenix, agreed. He said lawmakers may find they have opened the state to litigation from neighbors who say that a new, unregulated home-based business has reduced their property values.
And Rep. Kirsten Engel, D-Tucson, said she feared the measure, as approved, still allows for more than minimal business operations out of someone’s home. For example, she said there is no limit on the number of family members who can be on site.
Weninger said he was not interested in trying to address that.
“It used to be when I was a kid, Catholic families were really big,” he said. “I don’t want to get into the business of telling people how many of their family members they can have at the time, whether it’s for a Christmas celebration or whether it’s coming over to help for the business.”
Weninger said there’s proof that home-based businesses, if not subject to onerous regulations, can eventually grow to be successful. One of those, he said, is Apple, started by Steve Wozniak and Steve Jobs in a garage.
As it turns out, though, that may be more myth than reality.
In an interview with Bloomberg, Wozniak said there was no actual designing of computers in the garage.
“We would drive the finished products to the garage, make them work, and then we’d drive them down to the store that paid us cash,” he said.
“There were hardly ever more than two people in the garage,” Wozniak continued. “Mostly they were sitting around kind of doing nothing productive.”
But Rep. Randall Friese, D-Tucson, said that whatever led to Apple and its ultimate success did not require the kind of legislation approved by the House.
