According to U.S. Small Business Administration statistics, over half of all small businesses begun in the last decade have been home-based—that's more than 24 million in real numbers—with a new home-based business being launched every 11 seconds.
Those numbers should not be lost on condo and HOA board members, some of whom still preside over buildings with express prohibitions against home-based businesses. But should associations move to amend their governing guidelines, often requiring an amendment to the property’s declaration or master deed, to eliminate these provisions? Yes, say experts in both business and legal fields.
Efficiency & Sustained Growth
“There’s been so much outsourcing,” notes Phil Holland, Los Angeles-based business consultant and author of The Entrepreneur’s Guide who attributes the rate of home-based business growth to two main factors: “One, the adverse economic climate, which is propelling people to start home-based businesses, and two; the tools are now available to help them. Firms are learning that in some cases it's much more efficient and less costly to outsource work than it is to have employees in offices, so that has kind of propelled the home-based business thing. And for people who are unemployed and haven’t found work, starting a home-based business may not be a bad alternative.”
Yet unlike their non-condo-dwelling counterparts, many unit owners run up against rules forbidding home-based businesses in their buildings and HOAs. Balancing association administrators' concerns about traffic, noise, and zoning restrictions with residents' need for income and autonomy in their own homes is tough—but it must be addressed, particularly in such tenuous economic times.
Out-of-Date Bans vs. Reality?
Despite dramatic changes in telecommuting technology, many associations, still governed by bylaws drafted decades ago, prohibit home-based business activity of any kind.