June 8, 2023 at 1:28 p.m.
Oneida County moves to liberalize restrictions on home-based businesses
Half of a residence and entire interior of garage could be used, if passed
At an April meeting, and then after a May 17 public hearing that elicited no public comment, the committee forwarded an ordinance amendment to the full county board that would allow a home-based business to occupy up to 50 percent of a home in a single-family residential zoning district, as well as the entire floor area of an attached or detached garage or accessory structure.
The committee's changes are intended to allow people the flexibility to pursue and run home-based businesses while protecting the residential character of the exterior of the dwelling.
"Basically the purpose of a home occupation is to allow a smaller type of business in a residential setting," Oneida County zoning director Karl Jennrich told the committee in April. "The purpose of this section [of the ordinance] is to provide limited reasonable accommodations for owners or residential tenant-occupied businesses in the residential district without necessarily obtaining any rezoning and also balancing the interest of the residential users."
Jennrich has told The Times that his department receives zoning complaints regarding people operating a business out of their home or out of a detached pole building, and that most of the complaints are smaller one-person contractors that do electrical, HVAC, plumbing, or make cabinets or furniture.
In particular, Jennrich said, he received a complaint in Newbold about a cabinet maker who utilized his whole detached garage.
"I discussed the issue with committee [and] told them pursuant to our current language you can only utilize 25 percent of the home or detached garage," he said. "The committee wanted that changed."
Under the current ordinance, there can be no exterior alterations that change the character of a dwelling unit or garage, nor can there be any physical evidence from the exterior of the dwelling unit or garage that indicates it is being utilized for any other purpose other than that of a dwelling unit or garage.
The committee does not intend to alter those standards - except to specify that garages include both attached and detached garages - but is more concerned with relaxing standards inside the dwellings or garages. Under the ordinance proposal, the amount of square footage inside a home that could be used for the business would increase from 25 percent to 50 percent, and, for attached or detached garages and accessory structures, the business could now occupy the entire interior floor area, up from 25 percent of the total floor area.
"So you're allowing someone to use the entire garage or detached building," Jennrich told the committee.
Another issue was the definition of light industry. Under the proposed definition, light industry would mean the assembly, fabrication, or processing of goods and materials, using processes that ordinarily do not create unreasonable noise, smoke, fumes, odors, glare or other health and safety hazards outside the building or property where such assembly, fabrication, or processing takes place.
The intent is to clear up some "fuzziness" about when a conditional use permit might be required. Jennrich said the issue arose in Lake Tomahawk where a person in a business-zoned district manufactured or assembled furniture.
"And so basically we looked at it as light industry and required a conditional use permit," he said. "And that's where it gets kind of fuzzy because the purpose of the home occupation was to allow a woodworking shop or someone to make furniture, make cabinets, one person possibly with one employee. And that may actually also be defined as light industry, but we're going to be treating it as a home occupation."
The proposed definition moves the focus away from "industries" such as "machine shops" or "wordworking shops" to processes contained within a building or property.
Jennrich reiterated that the proposed changes protect the exterior character of the residential property.
"Again, even though you may be a contractor, at least in single family residential, I believe the intent is not to, the only thing that you may be able to see is a service truck," he said. "So if it's a building contractor, technically in single family residential, they shouldn't be having their skylifts or a lot of construction material, that type of stuff. It was all supposed to be enclosed, at least in single family residential."
WILL report
The changes come on the heels of report by the Wisconsin Institute for Law and Liberty, authored by Cori Petersen and Dylan Palmer, that advocates for looser restrictions on home-based businesses.
Petersen and Palmer point out that, according to the Small Business Administration, there are approximately 32.5 million small businesses in the U.S., and that about half of those are home-based.
"Another study showed that about 69 percent of small businesses get started in the home," the report stated. "One estimate states that home businesses, in the national aggregate, generate nearly $500 billion in revenue each year."
Even so, the researchers wrote, communities across the nation, and specifically in Wisconsin, have instituted lengthy lists of regulations that create barriers to people starting in-home businesses.
That said, the researchers emphasized, they were not against rules preventing the operation of industrial or heavy commercial equipment that produces excessive negative externalities, such as noise or pollution, in a residential area: "That would not only disturb the peace, but have material negative effects on neighboring properties."
Still, they wrote, many of the rules on the books are arbitrary and unnecessarily burdensome.
The report did not look at regulations in rural areas-though home-based businesses can be even more important there-but only looked at Wisconsin's 20 most populous municipalities, and what they found was a host of arbitrary regulations.
The 11 common "ordinary regulations" include limiting the amount of floor space a home business can devote to its business activities, a regulation that the new Oneida County proposed ordinance amendments are seeking to liberalize by doubling the amount a residence can use, and allowing complete use of a garage's or accessory structure's interior.
Another regulation the WILL report focused on was a requirement that all business activity occur in the primary residence rather than in an accessory structure (e.g., a garage or shed). Oneida County does not have that requirement, and, as noted above, is liberalizing the use of the interior spaces of garages and accessory structures.
Other regulations mentioned by WILL are noise ordinances requiring businesses to refrain from creating sounds irregular to a residential area; banning the outdoor storage of materials; banning hazardous materials; instituting off-street parking requirements or work vehicle prohibitions; commanding that the business not change the "character" of the residential area (a component of the Oneida County ordinance); requiring that all deliveries be customary to residential purposes; banning the use of signs; requiring an application or permit to legally run a home business; and requiring that a city government review and approve one's business.
Oneida County's standards are relaxed by comparison in some areas, and as strict in others.
For example, in Oneida County, there can no visible outdoor storage or display of materials, goods, supplies, or equipment related to the operation of the home occupation. The ordinance does allow for the occasional delivery of materials to or from the property, though traffic cannot exceed that which is normally associated with the typical residential use.
The county ordinance also allows for a non-resident employee, though not more than one at any given time. Vehicle repair or bodywork businesses are banned. The ordinance does not require committee approval, but owners of home-based businesses must complete a home occupation compliance checklist and pay a fee, and the zoning director must sign off on it.
Other areas
Other locations in the state are already far more restrictive than Oneida County.
For instance, in Oshkosh, retail or wholesale uses must be conducted entirely by Internet, mail, and/or off site, and a site plan must be included in the application. In Sheboygan, there are extensive zoning map requirements, a land use map is required, and a written description of special use "describing the type of activities, buildings, and structures proposed for the subject property and their general locations" is required.
What's more, a site plan is required, the WILL report stated.
According to the WILL researchers, a common theme they encountered was fear of running afoul of local authorities and losing the ability to start or continue their business in the home.
"At the start of this report, an aspect we were excited for was to tell the stories of in-home businesses that have either been shut down by a city or had reached some sort of agreement by which they were able to operate their business legally," Petersen and Palmer wrote. "We reached out to a number of business owners, some whom we found through open records requests and others we found separately, asking for their stories. We called, emailed and messaged on social media platforms, but were unable to find even one business that was willing to share their story with us."
That was likely indicative of the climate that home-based businesses are dealing with, the authors concluded.
"For instance, if they previously ran into trouble with a city, but eventually came to an agreement, than why rock the boat by talking about it?" they wrote. "And if they are still hoping to negotiate something with the city in order to run their business above board, why risk jeopardizing it? This underscores the bottom line of this report, which is that home businesses should not operate in fear of their municipality and its outrageous regulations."
Given the lack of responses, Petersen and Palmer wrote, the best they could do was piece together a rough history of events surrounding the story of a flower shop in Oshkosh.
"From what we observed, this business was not disturbing their neighborhood in any truly noticeable way," they wrote. "Nevertheless, they were told to shut down because they were in violation of the city's in-home business regulations."
Through social media, the report states, WILL discovered that a local man in Oshkosh had operated his shop out of the first floor of his home since at least 2019.
"Photos obtained through open records show that the proprietor had set up the first floor of his home as a Christmas store during the holiday season," the report stated. "Every room had merchandise displayed, from stocking stuffers to ornaments. In warmer months, this home-business owner made a floral shop of his home."
Ultimately, Petersen and Palmer wrote, he received a notice for violating the city's regulation that "items shall not be sold or offered for sale on the premises." The city sent several more notices, the last one telling him that even if he re-zoned his property, the primary use would still be residential and he would need to open a store in an appropriately zoning district if he wanted to continue operating his business.
"A few months later, we read in Oshkosh's newspaper (the Oshkosh Northwestern) about a new flower shop that opened in late May 2021," the report stated. "The article explains that the proprietor had decades of experience working with florals and had previously run a flower shop out of his home."
Et tu, Madison?
In Madison, a resident violated zoning laws by posting a sign for a window/gutter cleaning business, the report stated. In West Allis, a resident was denied an in-home business permit for her dog-washing business.
"[In Waukesha,] a resident parked a vehicle for his snow-removal business in his driveway and was therefore in violation of zoning law," the report stated. "[In Menomonee Falls,] a resident was ordered to cease operating his landscaping business from home, which includes removing landscaping equipment and vehicles."
Also in Menomonee Falls, a resident was ordered to cease a dog breeding and selling business, while in Fond du Lac a resident applied for a home-occupation permit for her re-upholstery business and was denied because "a home occupation cannot generate vehicular traffic beyond that common to a one-family dwelling. Also, retail sales are prohibited at one-family dwellings."
North-central Wisconsin did not escape notice in the report.
"A business was shut down [in Wausau] for selling goods out of its garage because garage or estate sales were forbidden to exceed 4 days in duration and could not be held more than four times in a 12-month period, or twice in a 30-day period," the report stated.
What to do?
The tendency toward the over-regulation of home-based businesses is not a regime Wisconsinites should be complacent with, Petersen and Palmer wrote.
"As a Midwestern state, Wisconsin does not have the benefit of a large number of young professionals flocking to work in our cities and create economic growth, as many coastal and Sunbelt states do," their report stated. "Nor do we experience a great deal of population growth each year. In fact, according to research conducted by the Kauffman Foundation, Wisconsin ranked 47th among the states plus D.C. for its rate of new entrepreneurs and 42nd in its early-stage entrepreneurship index. It follows that it would be particularly beneficial to Wisconsin to encourage economic growth by whatever means are readily available."
By over-regulating home-based businesses, which is where many entrepreneurs get their start, cities artificially limit Wisconsin's economic power, the researchers wrote.
"Moreover, there's something of an inherent rights issue with many of the common regulations on home-based businesses," the report asserted. "From what source does a city government legitimately derive the power to tell citizens they can only conduct business in their home at certain hours of the day, that only so many clients can be in their home at one time, or that items they seek to sell cannot be stored in their private residence? Such power utilized by the state impedes the ability of citizens to earn a living."
WILL has argued in the past that the Wisconsin constitution implies an inherent right to earn a living, Petersen and Palmer observed.
"The sorts of intrusive, overburdensome regulations promulgated by cities, detailed in this report, deny that right, which is deeply rooted in the history and traditions of our state and our country," they wrote. "Both federal and state governments are designed to protect self-government and individual rights. They should not now cede such important ground to city governments overstepping their authority."
The two researchers acknowledged that many people get away with violating regulations - running a quiet business out of their home that conflicts with their city's regulations while no one notifies local authorities - but that that should be no argument for maintaining the status quo in cities with burdensome regulations.
"A home-business owner should not be made to worry constantly that their livelihood is in jeopardy from a city government that could spring into action against them at any moment," they wrote.
"If they are conducting a legitimate business, home-business owners should not feel the need to conduct any of their dealings in secret to avoid reprisal from neighborhood busybodies and/or an overreaching city government."
The authors also acknowledged that enforcing zoning laws are not the top priority of many local governments, and many might not be enforcing home-business regulations as strictly as they might, but they argued that was not as much a relief to home-business owners as it might sound.
"Lack of consistent enforcement may make it easier to run a home business that violates questionable municipal codes, but it also means chronic uncertainty as well as the discretionary targeting of home businesses by city governments," they wrote. "If the in-home business regulations of a city are not enforced consistently, they cannot be enforced equally, which means they can only be enforced discriminatorily."
And that puts vulnerable people at greater risk of being targeted by a city government, Petersen and Palmer wrote.
"And, if we take the 'inconsistency of enforcement' point to its extreme, and say that some cities may not be enforcing these regulations against home-business owners at all, we come to a logical conclusion that supports WILL's policy recommendation: repeal overburdensome regulations altogether," the report stated.
In the end, the report argued, state pre-emption might be the best solution.
"The simplest and most effective method for resolving the issues discussed in this report would be for the Wisconsin legislature to pass a bill that preempts certain restrictions on home-based businesses," they wrote. "This would mean voting for a resolution in which the state of Wisconsin creates a standard for home-based business regulation, which, among its provisions, would prevent cities from creating stricter regulations than those found in the statewide standard."
Beyond that - and local advocacy in the absence of a statewide preemption bill - WILL addressed concerns some have about the dangers of repealing regulations on home-based businesses.
"To be clear, WILL does not advocate for the removal of all conceivable regulations on home-based businesses - if you want to turn your residence into a factory for firework production, or into a full-blown car-repair shop, WILL isn't proposing a right to that," the report stated. "Restrictions on home-based businesses that prevent people from housing hazardous materials, thereby creating public health threats, or which clearly alter the character of the surrounding residential area, should be kept in place."
But what about smaller concerns? the researchers asked.
"What if your neighbor runs a business out of their home that creates unreasonable traffic nearby, or has so many clients each day that your yard is constantly trampled by their clients? Are there any protections for you if home-based business regulations are loosened?" the report asked.
The answer to that question is yes, the researchers answered.
"Under common law, both public and private nuisances are grounds to bring a suit against the person causing a nuisance that harms you," the report concluded. "Nuisance suits can be settled in court for money damages or by an injunction to force the offender to cease all nuisance-creating activity. While this may sound like an arduous process, it is the best solution for balancing the property rights of home-business owners with the interests of neighbors who may be harmed by business owners causing unreasonable nuisances."
Comments:
You must login to comment.