Attorney Tiffany Clark at the Sacramento City Council’s June 25, 2024, 5:00 p.m. meeting, thanking the council both for its expected passage of an ordinance that would offer some relief to often socio-economically disadvantaged home business owners and to her own family, and for the council’s commitment to enact further reforms in the future.
I had been fighting for city of Sacramento home businesses and their often socio-economically disadvantaged owners long before I helped defeat Measure C for the smallest of small businesses this past March.
Although the city must do more for home business owners, including enacting further substantive regulatory reforms and reducing now even larger fees, I celebrate the huge victory I achieved for home businesses in June of this year.
Three of four unusual home business restrictions eliminated
After years of effort on my part, the city at last amended three of its four unusual home business or “home occupation” code sections, on June 25, 2024.
These problematic code sections have for years prevented my family and countless minorities and members of other historically disadvantaged groups from starting home businesses, even completely invisible home office businesses, even during the pandemic.
I explained the problem with those code sections and the then proposed (now enacted) fee hikes targeting home businesses during a May 14 press conference, before the city enacted any reforms.
Attorney Tiffany Clark holding a press conference on May 14, 2024, in this clip describing how the city of Sacramento’s four most problematic home occupation code sections worked together to hurt residents before the city amended three of them.
Although the Sacramento City Council did enact those proposed fee hikes and the city does still maintain a number of problematic substantive regulations targeting home businesses, as of June 25 the city no longer automatically limits each household to at most two home businesses that together involve no more than three residents and 10% of the home’s square footage, regardless of the size of the home or how non-impactful to neighbors the proposed home businesses would have been. (for details see City Code § 17.228.230 before, with redlined amendments and after amended.)
That is worth celebrating.
A huge step forward for historically disadvantaged communities
These reforms represent a huge step forward for current and aspiring home business owners, who are often low income and more likely than other small business owners to be female, racial or ethnic minorities, unmarried or renters, according to a 2022 report and study authored by home business expert, Jennifer McDonald.
McDonald, Assistant Director of Activism at the Institute for Justice, a public interest law firm based in Washington, D.C., joined me at a June 11 city council meeting to argue against the two proposed home business fee hikes mentioned above and described in greater detail in an earlier blog post and in my letter accompanying my June 11 testimony.
Attorney Tiffany Clark, followed by Assistant Director of Activism at the Institute for Justice, both arguing against two proposed fee hikes targeting home businesses at the Sacramento City Council’s June 11, 2024, 5:00 p.m. council meeting.
As McDonald explained in her June 11 letter to the city, those fee hikes would “severely inhibit Sacramento’s home-based entrepreneurs’ ability to earn a living.”
Although the council nonetheless passed those fee hikes at the end of its June 11 meeting, it did soften the blow just a couple of weeks later by enacting three of the four substantive home business regulatory amendments I had sought for so long.
As I had explained at a few earlier committee and council meetings, initially the huge fee hikes were to be added on top of all four burdensome home business regulations. I explained this for the first time on May 7, 2024 at a 2:00 p.m. meeting of the Budget and Audit Committee.
Attorney Tiffany Clark at the city of Sacramento’s Budget and Audit Committee’s May 7, 2024, 2:00 p.m. meeting, asking the committee to reject the two proposed fee increases targeting home businesses, explaining how they would hurt disadvantaged residents and compound the problem with existing substantive home business restrictions.
Thankfully, the fee hikes were ultimately not added on top of all four of those substantive regulations, because the council amended three of them just two weeks later. Nonetheless, the city still needs to amend the fourth substantive regulation, enact additional substantive regulatory reform and drop the fees.
Yet, the city must do more to relieve these vulnerable residents
For the sake of both equity and economic growth, as soon as possible the Sacramento City Council needs to:
- Amend the fourth unusual home occupation code section (the single-vehicle limitation, City Code § 17.228.230.A.6);
- Engage in wholesale reform and simplification of the home business statutory regime; and
- Reduce the home business fees it recently increased.
The city needs to amend its single-vehicle limitation code section
As McDonald explained in her June 11 letter, the city council needs to amend the “outdated” single-vehicle limitation.
The single-vehicle limitation confines all of a household’s home businesses to sharing at most one otherwise permitted, ordinary household vehicle—at least according to the plain language of the code section, City Code § 17.228.230.A.6, which reads “Only one vehicle of a size no larger than one ton shall be permitted in conjunction with a home occupation” and must be read in the context of City Code § 17.228.230.A.1, which states “All of the requirements stated in this section 17.228.230 shall apply to each permitted residence without regard to the number of home occupation permits issued for the residence.”
As McDonald asserted in her June 11 letter, “[I]t is crucial that the [code section] be amended to clarify that a household’s personal vehicles (including personal vehicles also used for the business) not be included in the limit on one business-related vehicle.”
Here is why.
Even with the other three unusual home business restrictions eliminated, the single-vehicle limitation alone could dramatically reduce the number of completely benign home businesses a household could operate.
Consider a married couple, for example, in this case a husband and wife. Husband already works at home for his own indiscernible home office business, only occasionally using one of their family’s two otherwise permitted, ordinary household vehicles. Wife wants to do the same, occasionally using the other vehicle. Together they would generate far less traffic than if either one of them commuted to a full-time employment job-site.
Nevertheless, the plain language of the single-vehicle code section would prohibit them from proceeding—unless they got lucky after opting to spend over $5,200 (with the recent fee hikes) to apply for an exception to the rules, wait 4-6 months and endure a public hearing, as I explained during my May 14, 2024 press conference.
Attorney Tiffany Clark holding a press conference on May 14, 2024, in this clip explaining the problem with the city of Sacramento’s single-vehicle limitation for home businesses.
While I am grateful that city staff ultimately offered to refrain from enforcing this literal interpretation of the single-vehicle limitation code section while it takes more time to amend it, this was a staff member’s commitment made only in a personal email to me. I am concerned that such an informal commitment would be unenforceable, and certainly unknown to those interested in starting new home businesses.
Although in July the city apparently took some of the advice contained in McDonald’s June 11 letter by adding an interpretive clarification to its home occupations handout to suggest that it would interpret “one ton” to include vehicles up to 10,000 pounds (but also no longer than 20 feet, which could negatively impact some with mixed personal-business vehicles slightly longer), it failed to simultaneously clarify in the handout that the single-vehicle limitation was not meant to limit the number of otherwise permitted, ordinary personal vehicles used in conjunction with a home’s businesses.
In any event, emails and clarifying remarks in handouts, while welcome, are insufficient, both from an enforcement and public notice perspective. Therefore, we need the city to amend the single-vehicle code section itself as soon as possible, along with other home occupation regulations that are arguably unnecessary, hurt vulnerable residents and stifle economic growth.
The city needs to overhaul its entire home occupation statutory regime
Ultimately, the city needs to re-evaluate and drastically simplify its entire home occupation statutory regime, in alignment with the Institute for Justice’s recommendations and the city’s commitment in its 2040 General Plan’s implementing action, LUP-A.11.
The home business code sections must focus less on banning certain home occupations altogether and instead rely on the numerous ways in which those code sections already regulate externalities, such as visitors, noise and traffic, and even perhaps rely solely on the city’s existing general nuisance ordinances, such as those in City Code §§ 8.04.010-8.140.060, which are arguably more than adequate to ensure that home business effects remain indiscernible from normal and usual residential activity.
The city needs to drop its unusually high home business fees and go further still
Lastly, we need the city to not only reverse the latest increase of the two fees targeting home businesses, but reduce those fees further still, for all the reasons McDonald and I covered in our June 11 letters and that evening’s council meeting and that I discussed in this earlier blog post and in various other city council and committee meetings.
Indeed, the city needs to consider implementing a program like peer jurisdiction San Francisco has, to altogether eliminate fees for brand new businesses.
Preferably this would come in combination with a progressive business operations tax structure, such as peer jurisdictions San Francisco and Oakland have. Such a tax structure could boost offsetting revenue from reduced fees and potentially eliminate the city’s large and growing budget deficits currently projected for years to come. It is an idea I plan to describe in greater detail in a future blog post.
The long, arduous journey to this year’s victory for home businesses
My concern with the city’s home occupation policies originated decades ago.
At that time, I was struggling to care for my neurodivergent infant, while coping with mountains of student debt and trying to run my own home business, a home-based law practice, which had no on-site visitors or other discernible neighborhood effects.
I soon developed interest in starting one or more additional benign home-based businesses, including one focused on the arts and potentially a non-profit, which would also have involved no visitors or other discernible neighborhood effects. However, more than two home businesses, however benign, were out of the question under the previous rules.
Before I knew it, my concerns became my whole family’s concerns. Soon, my husband wanted to start a similarly benign, home-based consulting practice with no on-site clients. Years later one of our two adult sons wanted to start an indiscernible home business as well. Then the other wanted the same.
However, most of this was not possible under the previous rules.
As a result, we were negatively impacted for years. My husband spent nearly $15,000 in “virtual office” rent as a “work around” suggested by city staff years ago and our youngest son entirely postponed his dream of starting a home-based video game development business—even though, again, none of our desired home businesses would have had any visitors or other discernible neighborhood impacts and would indeed have reduced traffic congestion relative to our commuting neighbors.
I explained all of this, as well as how the then existing rules and proposed fee hikes could hit young people especially hard, at my May 14, 2024 press conference.
Attorney Tiffany Clark holding a press conference on May 14, 2024, in this clip describing how the city of Sacramento’s problematic home business regulations and high fees could hurt young people and had been negatively impacting her husband and their two young adult sons.
Although I had conducted initial research over 15 years ago with an eye towards pushing for change, like many home business owners I was too caught up in day-to-day struggles to speak out.
So, my advocacy efforts started in earnest only about five years ago, with 2040 General Plan input, followed by emails with my then councilmember, Angelique Ashby, and various staff members.
I have reason to believe that these efforts eventually led to the proposed 2040 General Plan’s implementing action, LUP-A.11. That said, unfortunately, the plan’s commitment was to merely “evaluate” potential home occupation regulatory reform options by as late as 2029.
Not long after the 2040 General Plan draft began circulating, I reached out to the Institute for Justice, which considered taking on my family’s case as a legal matter. The plan was to start with a letter to the city that I co-wrote with a staff attorney there.
However, ultimately, I amended and emailed my own version of that detailed letter to the city council, city attorney and staff on September 11, 2023.
Unfortunately, I received no substantive response to that letter and conversations with my councilmember (Mayor Pro Tem Karina Talamantes)’s staff yielded little response either.
However, the perfect opportunity to again voice my concerns materialized in early 2024. At that time, the city unexpectedly proposed its dramatic home occupation fee increases, as part of the FY 24/25 proposed budget. This provided a natural opening for me to draw further attention to the substantive regulatory problems while simultaneously arguing against the huge fee hike proposals.
I began that effort with another letter to the city, highlighting the inequitable impacts of the fee hikes and the still needed substantive reforms. This letter accompanied my May 7 testimony before the Budget and Audit Committee, shown earlier.
I spoke again on the topic at my May 14 morning press conference, along with my husband and our two sons. All but my husband spoke again later that day at the 2:00 p.m. council meeting. My husband spoke that evening at the 5:00 p.m. council meeting, although it was not captured on video.
I believe it was the May 14, 2:00 p.m. council testimony that constituted the proverbial straw that broke the camel’s back, as later at that same meeting and in his May 17 budget memo the mayor invited staff to take action on my proposed regulatory reforms and staff acted quickly in turn.
Attorney Tiffany Clark at the Sacramento City Council’s May 14, 2024, 2:00 p.m. meeting, explaining the problem with saddling home businesses with the large, then proposed (now approved) fee increases targeting home businesses on top of the city’s unusual home business regulations, citing vulnerable residents and her impacted family members, two of whom are shown speaking after her in this clip (Elliot Clark, age 20 and Keegan Clark, then age 24).
Indeed, in some sense staff responded too quickly to the mayor’s invitation. The bottom of page 6 of the mayor’s May 17 budget memo had stated, “After hearing from the community these past few weeks, I propose the Council give direction to the City Manager to modernize the Home Occupation Permit policy to account for the overall shift to virtual work post-pandemic, particularly when they do not have an impact on the surrounding community.”
Within just days after the release of that memo, on May 20, while my family and I were out of state, staff emailed me notice of the mayor’s budget memo, the fact that staff had already drafted proposed home occupation code section amendments, and the fact that the Law and Legislation Committee would be voting on those proposed amendments the very next day, May 21.
Unfortunately, the changes proposed were insufficient, dealing with only two of the four most problematic home business regulations. Also insufficient was the time I had to sound the alarm about this fact before the Law and Legislation Committee’s vote. So, despite my best efforts, the provisions passed through the committee as-is.
Thankfully, over the ensuing month between the committee’s vote and the full council’s vote on June 25, I convinced staff to propose one additional amendment, so that at least three of the four unusual home occupation regulations could be eliminated on June 25, as staff insisted it would need more time to draft an amendment to the fourth code section, the single-vehicle limitation.
The one additional amendment was to the square footage limitation. As I explained in the first clip of the May 14 press conference shown earlier, the square footage limitation required all of a home’s businesses to together occupy no more than 10% of a home’s square footage.
My emailed argument to the mayor, councilmembers and city staff for this additional amendment was, “Experts who have studied this issue have concluded that the best approach is for cities to ‘[p]lace no limits on the square footage a business can take up in an owner’s home’ and instead, ‘[t]o the extent home-based businesses may negatively affect neighbors’ health, safety or quality of life, cities should focus regulations on addressing those externalities . . . ,’ which the City of Sacramento already does. I agree. Limiting square footage only hurts those inside the home, while doing nothing to address externalities outside of the home. Moreover, it’s inequitable, as it hits larger, low-income, often minority households, living in smaller dwellings the hardest.”
That argument proved persuasive and, as a result, staff proposed removing the square footage limitation entirely and council agreed to that amendment and the other two, at its June 25 council meeting.
Given all this, I expressed my thanks to the council at that meeting, even while making it clear that more change was needed.
Attorney Tiffany Clark at the Sacramento City Council’s June 25, 2024, 5:00 p.m. meeting, thanking the council both for its expected passage of an ordinance that would offer some relief to often socio-economically disadvantaged home business owners and to her own family, and for the council’s commitment to enact further reforms in the future.
In summary, the council passed key reforms, but more is needed
While I remain grateful for the recent substantive home occupation code amendments, more reforms are needed. As I noted on June 25, it is important that we not let the “perfect get in the way of the good enough for now.” However, as I also made clear, there is more to be done.
For example, as noted earlier, the single-vehicle limitation code section needs amending. While I am sympathetic with staff’s desire to proceed with caution, I ask that it also proceed as expeditiously as possible. Emailed assurances and notes in handouts are not enough to ensure that the limitation McDonald correctly described as “outdated” is never enforced as written, nor are they enough to provide needed notice of the non-enforcement policy to potential future home business owners.
Moreover, the entire home occupations statutory regime is outdated and needs an overhaul and simplification. We need to support those struggling to make a living in this city by streamlining and simplifying our home business code sections in ways that are also fully consistent with the goal of keeping effects indiscernible from normal and usual residential activity, as described in greater detail earlier.
Lastly, of course, the fee hikes need to go, as do so many of the city’s recent budgetary decisions that effectively balance the budget on the backs of those who can least afford it.
So, while I am grateful that the city has at long last made a number of the most critically needed home occupation code section amendments, I am also grateful that I live to fight another day—to encourage the city to reverse those fee hikes, reduce fees further still, explore budget-balancing alternatives that spare the little guy from carrying unfair burdens generally, amend the single-vehicle limitation and reform other unnecessary home occupation regulations.
