Skip to contents

Home-Based Businesses Would Face Less Red Tape Under City Proposal

The ordinance modifies Chicago’s home-based business license requirements and expands the range of occupations that qualify to be operated out of someone’s home.

After being laid off, Pilsen resident Cynthia Soto took her love for animals into a new career by launching Pocha Shop, a clothing shop for dogs and cats.

CHICAGO — After the coronavirus pandemic redefined the workplace, a new measure to lessen the barriers to opening a business at home appears likely to be approved next week by Chicago’s City Council.

The ordinance, sponsored by Ald. Gilbert Villegas (36th) modifies Chicago’s home-based business license requirements and expands the range of occupations that qualify to be operated out of someone’s home.

The ordinance, first introduced in January, was deferred last month and underwent a makeover before being unanimously approved by the Committee on Economic, Capital and Technology Development on Tuesday. Villegas chairs the committee.

He said the changes will “primarily help minority owned and female owned businesses in Chicago.”

The new rules will “move Chicago forward towards a more robust and accessible economic recovery by giving all Chicagoans the wiggle room they need to make ends meet, even when that is at home,” he said.

Home based businesses would be permitted to occupy 25 percent or 300 square feet of their residence, whichever is larger, under the new rules. That’s up from 10 percent.

The new rules also allow businesses to be operated from coach houses and allows unlimited bulk deliveries from 9 a.m. to 6 p.m., rather than one bulk item per day from 8 a.m. to 5 p.m. allowed previously.

The amended ordinance also includes landscaping and construction businesses, a boon to an industry where entrepreneurs often launch a business with a single truck.

Other businesses, however, are still not permitted to be operated out of a home, including food service or catering businesses.

Rosa Escareno, the commissioner of the Department of Business Affairs and Consumer Protection, praised the substitute ordinance as a compromise on a “complicated topic.”

The ordinance “greatly expands opportunities for entrepreneurs, while ensuring safeguards are in place to protect consumers from fraud and guarantee safety and preserves residential neighborhoods,” she said.

Beth Kregor, director of The Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School… said “startups increased by 45 percent in 2020,” but said Chicago’s home based business rules were “more restrictive than any we could find.”

“There are lots of creative and resilient Chicagoans who are figuring out new ways to help their neighbors and they’re developing new products to sell online. They’re finding a way to make a living to support themselves and their families,” she said.

Subscribe to Block Club Chicago. Every dime we make funds reporting from Chicago’s neighborhoods.

Already subscribe? Click here to support Block Club with a tax-deductible donation.