City Council Backs Home Businesses

By HUGO MARTIN

July 11, 1996 12 AM PT

TIMES STAFF WRITER

After more than a decade of debate, the Los Angeles City Council moved Wednesday to legalize and regulate home businesses.

The council’s decision to draft a home business ordinance means that hundreds of thousands of such businesses will receive legal status for the first time. It also means they will be subjected to a $25 regulatory payment plus business-license fees that will vary according to gross receipts. The city could collect at least $5 million annually, Controller Rick Tuttle estimates.

The council’s vote brings Los Angeles in line with 77 other cities in the county that have already legalized home-based businesses.

According to one study, about 300,000 home businesses operate illegally in the city and about 3 million statewide.

The council’s decision was greeted with cheers by the two dozen home business operators who attended, including Claudia Phillips, a Westside attorney specializing in bankruptcy law.

Phillips would have been out of business in about a month without the council’s decision. She said the city Building and Safety Department had issued her a notice to shut down her business by Aug. 15 or face a possible misdemeanor violation.

“Working at home allows me more time with my two children,” ages 4 and 7, she told the council. Besides, she said, she runs a solo practice and cannot afford to rent an office.

The city is finally recognizing sweeping changes in the business world brought about by personal computers, modems and fax machines, supporters said. Census and survey data show that home businesses are one of the fastest-growing segments of the nation’s economy.

“I see this as a train that left a long time ago and we are huffing and puffing to grab the rail on the caboose,” said Councilwoman Laura Chick, who along with Councilman Rudy Svorinich Jr. championed the proposal.

Opponents of the measure worried that the city will be unable to regulate the home-based businesses and that it would allow traffic, noise and visual blight from business signs into residential neighborhoods.

“You will have nothing but problems on top of problems on top of problems,” said Councilman Nate Holden, the sole opposing council member in the 13-1 vote. “You are going to destroy our neighborhoods.”

Originally, Councilman Hal Bernson, who heads the council’s Planning and Land Use Committee, also opposed the measure on similar grounds.

“I have never seen a piece of legislation more dangerous to the city than this one,” Bernson had said.

But he voted for the measure after he and Chick compromised on language for the ordinance.

Under that agreement, the ordinance will set 21 performance standards for businesses, prohibiting excessive noise, traffic, signs and any other changes that would ruin the character of a single-family neighborhood.

It also will prohibit more than a dozen kinds of businesses, including auto repair shops, massage parlors, gun stores and retail outlets.

In addition, the $25 fee would pay for a team of at least three city inspectors to regulate home-based businesses.

The council instructed the city attorney’s office to draft the law and return it to the council for a final vote sometime next month. Mayor Richard Riordan already has voiced support for the measure.

Although most other cities in the county have legalized home-based businesses in the last 10 years, Los Angeles has continued to prohibit them. The only exceptions allowed have been doctors, dentists and ministers. Thus far, the city has investigated only violations based on neighbor complaints.

In 1986, the late Councilman Howard Finn first instructed city analysts to come up with a law permitting businesses in residential areas. Since then, the measure has been shuffled back and forth between planners and zoning enforcement officers and council committees.

The primary debate has centered on ensuring that home businesses are kept from ruining the character of city neighborhoods. Several versions of the latest measure have been drafted and redrafted over the years.

Two years ago, Svorinich reintroduced the Finn motion in hopes of imposing standards on the thousands of business operating illegally in the city and tapping them for license fees.

Bernson proposed his own version of the measure, which would have allowed a short list of home businesses.

He dropped his version after Chick and Svorinich agreed to add an amendment that gives city inspectors the power to move quickly to fine and close home-based businesses that create noise, traffic or other problems.

The proposal was still opposed by homeowner groups, the Building and Safety Department and Holden, all of whom argued that the city would not be able to regulate home-based businesses.

“You have a number of ordinances that have not been enforced, so how do we expect this to be enforced?” asked Gordon Murley, the president of the Federation of Hillside and Canyon Assns.

But supporters argued that such businesses already operate in the city with or without a law.

“It’s informally accepted that anyone can work at home,” Councilman Richard Alarcon said. “We ought to set the standards and let people know what is permitted and what is not.”

Operators of home businesses told the council during its debate that their enterprises should be encouraged because they reduce traffic and smog and allow parents to spend more time with their children.

Before the vote, about 20 owners and operators of home businesses held a rally on the steps of City Hall, where they waved signs that read: “Home Sweet Workplace,” and “President Clinton is Home Based.”

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Banned Businesses

Following is a list of the businesses that would be prohibited under the city’s ordinance allowing home-based firms:

* Adult entertainment

* Ambulance service

* Animal training

* Automotive repair

* Funeral home

* Garment manufacturing

* Gun manufacturing or sales

* Gunsmith

* Massage parlor