Chicago relaxes licensing rules for home-based businesses

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Mayor Rahm Emanuel at panel discussion on “Reducing Violence and Strengthening Police/Community Trust” , Wednesday, Jan. 20, 2016, during the U..S. Conference of Mayors Winter Meeting in Washington. (AP Photo/Cliff Owen) ORG XMIT: DCCO113. | AP

Mayor Rahm Emanuel is trying again to bring home-based businesses, a fast-growing segment of the local economy, into the mainstream.

The City Council’s License and Zoning committees approved the mayor’s plan to relax rules to make it easier for Chicagoans to do business out of their own homes.

More than 20 years ago, Chicago agreed to license home-based businesses but limited them to 300 square feet of space and prohibit them from hiring employees.

The rules were so restrictive, home businesses that had spent decades underground chose to remain there. Nothing much changed even after the rules were changed to allow them to hire an employee who didn’t live there.

The city issued just 2,400 licenses in the first three years of licensing although the number of home businesses in Chicago was pegged at the time at between 200,000 and 300,000.

The new ordinance advanced Wednesday by the City Council’s Zoning and License Committees would allow home-based businesses to hire additional employees, provided they “work exclusively outside the dwelling unit in connection with the home occupation.”

The mayor’s plan would also allow home-manufactured products to be sold at retail locations and permit the storage of “incidental, nonhazardous materials” in a garage.

The license costs $125 a year. The penalty for not having one is a fine of $250 to $500 per day.

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Bulk deliveries to home businesses would still be limited to one a day between 8 a.m. and 5 p.m. But the ban on “delivery via tractor trailer” has been eliminated. The ban on interior signs has also been relaxed.

“These changes provide greater flexibility to more than 2,200 currently licensed home-based businesses to grow their business and provide opportunities for thousands of other home-based entrepreneurs that are unable to operate under our current regulations,” said a summary distributed to aldermen before the vote.

The decision to relax the limits on interior signs would address a chronic complaint made when the original ordinance was passed.

At the time, lakefront resident Sheila Ware was one of the few who bothered to shell out the required $125 for a general business license to operate an accounting business out of her apartment on North Marine Drive.

“I was planning to put a notice in the laundry room and I didn’t want any of the other shareholders in my co-op complaining or blowing the whistle on me. I didn’t want to have to worry about being fined,” she said then.

The 300-square-foot limit was also a major point of contention during the original debate. The fact that it remains in Emanuel’s new version will almost certainly trigger renewed complaints.

“If you have a big home and you want to use 90 percent of it for your office, what difference does it make as long as you don’t disturb the neighborhood?” Coralee Kern, then-executive director of the National Association of the Cottage Industry, said when the original ordinance was approved.

At the time, Kern decided not to buy a $125-a-year license for the maid service she operated out of her home because the original ordinance tied her hands too much.

The ordinance approved Wednesday also eliminates a $330 “shared kitchen user fee” for licensed mobile food vendors and reduces the pushcart license fee from $350 to $100.

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