Discuss Home Occupation Permits

Current Code
The City's Community Development Department has had recent difficulties processing the current iteration of the home occupation ordinance. Home occupations are intended for the "peace, quiet, and domestic tranquility in all residential neighborhoods" and shall be "temporary in nature." The City Council may recall some recent cases that have sparked particular public interest that are allowed with a Level-II permit such as contracting, manufacturing, or similar uses that deter from the intention of a residential setting. The list below are some current code provisions that may prove problematic for future applications:

• Incompatible uses include operations relating to internal combustion engines, ammunition manufacturing, or motor vehicle sales.
  • There are several of other uses that could be detrimental to a residential setting. By specifically listing incompatible uses, it limits interpretations to only these types of businesses as incompatible when many other businesses could be problematic.
• Vehicle trips, type, and number
  • According to the City's Zoning Code Enforcement Officer, there is not an appropriate way to monitor vehicle trips unless a City official would be observing the property at all times.
  • The current code also allows an undefined amount of vehicle types and number if they have a Level II permit. An applicant could have multiple commercial vehicles with a larger weight class that could damage City roads that do not have the appropriate bituminous weight surfacing.
• Accessory Buildings and Garage Space
  • Nearly all surrounding cities do not allow home occupations in accessory buildings, and require at least two stalls (400 square feet) of garage space devoted to personal use instead of business use.
  • Accessory buildings are a permanent improvement, and do not qualify as "temporary in nature" when used for business purposes.
  • Certificates of Occupancy (COs) are required for commercial buildings that are intended to be occupied by people. The City's Building Official cannot issue a CO until all required Building Code requirements are met and cannot issue one at all on an accessory structure.

Some uses have also come forward that would not be allowed administratively based on the City's current Home Occupation Permit (HOP) ordinance, but have a less intense use, such as a beautician or a dog treat sales business:

• Any customers onsite, unless an arts occupation
  • Staff have received inquiries from residents requesting home-based businesses for beauty shops or dog treat sales, that have opted not to pursue their business dreams because of the Level II requirements.
• Level II permits allowed in R-1 District only
  • There are other residential districts in the City that could benefit from having the opportunity to obtain an HOP such as R-2, R-3, the COR, PUD, and MU-PUD.

County Assessor's Office and Homeowner's Insurance
The City has had discussions with Anoka County's Assessor's Office regarding home occupations and the potential for altering class taxifications based on home-based businesses. The County has said that if they were to discover any properties with home-based businesses, those properties could be taxed at a commercial property rate for the area dedicated to a home occupation. This would lead to tax hikes for our property owners that have obtained HOPs to avoid paying fees for commercial spaces, thus making their investment void and altering the property's tax class for future property owners. The same concept applies to homeowner's insurance. Property owner's insurance rates may increase if their property could qualify as commercial property.

Commercial Accessory Buildings and Property Owner Investments
A few applications have come in for accessory structures requiring building permits that are dedicated to home-based businesses. Some of these buildings have proposed reception areas, conference rooms, and individual offices for employees. While their proposals may fall within the Level I HOP requirements (no permit required), the type of structures and occupancies they're proposing have caused difficulties for our Building Division to process these permits. These would qualify as commercial buildings which would require various improvements, such as a fire suppression system, accessibility (bathrooms, ramps, parking stalls, etc.), exit signs, etc. The building will have to be equivalent to a commercial setting to provide proper safety for the public. These requirements can bear a heavy cost on property owners that wish to retain a home-based business, and might be more suitable in one of the City's already established commercial buildings.

Surrounding Cities' Requirements
Based on research conducted by staff, surrounding cities have more restrictive standards for home occupations to protect adjacent homeowners in their residential districts. Many cities propose a Level II permit on an interim status with an Interim Use Permit to only allow a home occupation as an incubator, with the intention of moving into a commercially-zoned space within a few years. There is also an option for an administrative permit for less intense uses that are more typical of a residential setting, such as home offices, or other uses similar in character with a low impact on surrounding properties. A list of surrounding cities' home occupation requirements is attached to this case, as well as a one-page summary table for the City Council's review.

Potential Code Revisions

• Eliminate allowing accessory buildings for HOPs;
• Limit the size of the HOP to a certain percentage or square footage of the home;
• Setbacks for all business-related operations (vehicles, the principal structure, etc.) from neighboring properties;
• Address outdoor storage;
• Specify a list of allowed and incompatible business uses;
• Specify the types and number of vehicles allowed related to the home occupation;
• Record the HOP with Anoka County; and
• Require an IUP for Level II HOPs

30 minutes

This case is part of staff's regular duties.

• Brian McCann, City Planner
• Craig Swalchick, Zoning Code Enforcement Officer
• Todd Larson, Planning Manager
• Jesse Szykulski, Building Official
• Stephanie Hanson, Community Development Director

Provide direction on how to process Home Occupation Permits, and if staff should pursue an amendment to the current home occupation ordinance.