Obtaining a license for a home-based business in Salinas takes three main steps: Fill out the application, get your address approved and, once it’s been processed, get your license. It’s a pretty straightforward process, but there is a catch.
Salinas’ current zoning code restricts each home address to two home business licenses. It’s an obstacle one South Salinas resident faced last August, when the city rejected her application for a third home-based business license.
Lorisa McKelvey and her husband have two businesses registered to their home address: an event management business and a bookkeeping company. But her daughter, who moved in with her, had to use her dad’s address in San Jose for her business because of the current ordinance’s limitations. McKelvey says this rule may be preventing people from applying and getting a business license. “That’s revenue for the city,” she says.
During the pandemic, small home businesses, such as the tea and michelada operation You Drop a Bomb on Me, as well as pop-up events, have increased.
According to data from the city’s finance department, last year Salinas issued 638 new business licenses, the lowest number in the past five years. So far in 2021, they have issued 191; if that keeps pace, over 700 permits could be issued this year.
On April 21, the Planning Commission asked city staff to make the code change to eliminate the number of home businesses per home address. According to a staff report to the commission, they researched similar jurisdictions and found that the cities of Seaside and Santa Cruz have no limit, while Monterey has a limit of two and Watsonville allows only one. The report states the change could encourage residents to start home businesses, since inquiries about home-based business licenses have increased since last year.
McKelvey says the information she and her daughter originally got seemed outdated, and she brought the matter to Councilmember Steve McShane.
“It is a good example where this has not been looked at for 25 years,” McShane says, “and the nature of small business, more than ever, is based on the internet.” McShane points out since there are more home businesses operating than there are home business licenses in the city, “this is an opportunity for those businesses to become legit.”
Salinas Director of Community Development Megan Hunter says the proposed change will only get rid of the number limitation, and will not change the nature of home businesses, meaning it won’t open up residential areas to increased traffic. “These are residential areas,’’ Hunter says. “It’s not operating like a traditional business where you have clients.” Other restrictions, such as not occupying more than 25 percent of the home and not including a sales room or a customer office, will remain in place.
City Council will discuss the proposed change at a June 8 meeting; a vote could occur that day.