The Business Next Door What Boards Should Know About Home-Based Businesses

Many aspects of the American work landscape have changed radically in the last two decades. As the service and information economies have overtaken manufacturing and other more traditional forms of labor, the old 9-to-5, office-bound workday model has shifted as well.

Even back in 2000, the U.S. Small Business Administration (SBA) estimated that home businesses accounted for more than 50 percent of all U.S. firms, and generated more than 10 percent of the nation's revenue. Those figures have grown exponentially as more people are working out of their homes than ever before—according to the U.S. Census Bureau, about 13.4 million people currently work from home in the United States. That's about 4 million more Americans since 1999. And that number is growing, as more big businesses realize the advantages, in terms of economics and productivity, of having employees stay home.

Challenges for HOAs

While home-based businesses have been a boon to many entrepreneurs, in some cases the practice poses challenges for the buildings and HOAs they live—and work—in. This is doubly true in Chicago, where so many condos are zoned for live/work. How do associations handle these challenges? How much work are residents allowed to do at home, and what kind? What recourse do HOAs have when office use crosses the line into violating the governing documents—or, worse, the law?

America has always been a country where the residential and the commercial overlap. Indeed, it was this tradition of blending work and home that prompted 1st Ward Alderman Joe Moreno to alter a zoning law last year that now allows owners of certain commercial storefront properties to live in them, too. “It’s how Chicago was built,” he said at the time. “Family in the back. Store in the front.”

It’s not just the treacle of nostalgia that inspires politicians and others in positions of power to argue for live/work zoning. As Moreno pointed out, affording small business owners the option of living where they work often spelled the difference between a business succeeding or failing. And when these businesses succeed, they can succeed spectacularly.

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