Small Victory for Home Business : Zoning: Exemption is granted to rule against commercial ventures in homes. Fear of disruption counters need for jobs and revenue.

Judy Corbett’s days as a lawbreaker are finally over.

After eight years of operating a costume-making business out of her North Hollywood home in violation of city zoning laws, Corbett was given a temporary exemption from the statutes last week by a city zoning appeals board.

“Usually, you think about bad guys circumventing the law,” she said. “I’m just trying to get a business going.”

But Corbett’s reprieve is for only two years. If she continues operating her shop after that, she will once again join the growing ranks of other home-based businesses in Los Angeles that violate a ban against commercial ventures in residential areas.

Still, advocates of home businesses call her reprieve a small victory in a battle that could otherwise have ended with authorities permanently locking her out of her own business.

There are no estimates of how many home-based businesses like Corbett’s operate illegally in the city of Los Angeles. But approximately 2,500 residents each year are turned down by the city’s Building and Safety Department for permits to operate businesses from home. The only exceptions allowed by the city are for doctors, dentists and ministers.

Although many cities in Southern California have adopted regulations to permit home-based businesses in residential areas--including Santa Monica, Torrance and Redondo Beach--an effort in the city of Los Angeles to draft similar regulations has foundered for nearly eight years.

And some planning officials say it is uncertain whether the regulations will ever be adopted.

“It may never come to the Planning Commission,” said city planner Cora Smith. “It’s a whole can of worms.”

Planning officials trying to draft the regulations say they are torn between the need to create more local jobs and reduce commuting, and the fear of letting home-based businesses turn quiet residential neighborhoods into noisy commercial zones.

*

Violators of the residential zoning laws are prosecuted only when neighbors complain. But city officials say such complaints occur very rarely, perhaps once or twice a year.

The effort to regulate home-based business in Los Angeles started in 1985 when the late City Councilman Howard Finn asked the city’s Planning Department to draft regulations to allow such enterprises in residential areas.

But it was not until 1990 that the city held its first public hearing on the proposed regulations. The idea was harshly criticized by some residents and planning officials, who said the proposed rules were too liberal. Since then, the proposals have been shuffled among various planning officials for adjustments and revisions.

Although the proposed ordinance remains in limbo, the topic continues to generate heated debate among homeowner groups, planning officials and business owners.

Opponents say they fear allowing home-based businesses would ruin the character of residential neighborhoods by increasing traffic and noise. Unless strict restrictions are adopted, they say the city should continue to prohibit such businesses.

“If a neighborhood is zoned for residential, we don’t want business operations out of there,” said Richard Close, president of the Sherman Oaks Homeowners Assn. “Where do you draw the line--one employee, two employees?”

Planning officials say it is difficult to regulate labor laws and the use of toxic materials in home-based businesses. And they worry that if some businesses are allowed in residential areas, it will snowball out of control.

“If you put a limit, people will always want a little bit more,” said Daniel Green, a city associate zoning administrator.

Proponents of the idea of legalizing home-based businesses say it will establish fertile soil for the growth of new ventures, thus bringing the city hundreds of thousands of dollars in license fees and taxes. In addition, they say, home-based businesses reduce smog by cutting the need to commute.

In other cities, where such businesses are legal, officials report few problems.

The city of Torrance charges a one-time $109 fee for a home-based business permit. If such fees were charged to each of the 2,500 residents who apply annually for home-based business permits in the city of Los Angeles, that would add $272,500 each year to city coffers.

The statutes adopted by other cities to permit home-based business generally prohibit employees other than the residents, and set limits on visits by customers to control traffic and noise. In short, a business must be compatible with the neighborhood.

Paul Edwards, who has written five books and hosts a radio program on home-based businesses, said if the city does not adopt regulations to permit home-based businesses, such enterprises will simply move to cities that do permit it, taking valuable taxes and fees with them.

“This is one of the major trends in the economy,” Edwards said.

Indeed, home-based ventures are the 1990s’ return to cottage industries.

New technology, a rise in dual-income households and a general trend toward downsizing businesses has helped the number of home-based businesses grow at an annual rate of 10% since 1988, according to Link Resources, a marketing research firm that conducts an annual work-at-home survey.

This year, the survey found that approximately 4 million full-time and part-time home businesses operate in California. Nationwide, 24.3 million Americans operate home-based businesses, either on a part-time or full-time basis.

The trend prompted state Assemblywoman Debra Bowen (D-Torrance) to draft legislation last year to require every local jurisdiction in the state to adopt regulations permitting home-based business.

Although Bowen’s bill won a wide margin of approval by the state Assembly and Senate, it was vetoed by Gov. Pete Wilson, who said, at the time: “I do not believe that this problem warrants the establishment of a new state mandate.”

Bowen said she got the idea for the bill when she worked as a lawyer and unsuccessfully tried to get a permit from the city of Los Angeles to work out of her home.

“It never made any sense to me that the city of Los Angeles doesn’t license businesses like this,” she said. “I really wonder how much business taxes the city of Los Angeles is losing.”

The head of a profitable mail order business that he operates out of his home in the San Fernando Valley said the issue for him is not proceeds for the city or lower costs for him, but simply convenience. The business owner, who asked not to be named for fear he would be caught by the city, said he ran his business out of a storefront building for six years, but moved part of the operation to his home because it cut his commute and left his schedule more flexible.

But he must now operate in a clandestine manner, he said, never letting his customers--or city officials--know that he works at home.

“There must be thousands of people who would like to be legitimate and hang that permit on the wall and not worry about that phone call or that knock on the door,” he said.

Corbett’s case is typical of many home-based businesses in the city of Los Angeles: She was motivated by the savings it could provide.

For years, she and her husband ran J&M; Costumers from a storefront shop on Sunset Boulevard in Hollywood, creating costumes for television and movie studios.

But after her husband died, Corbett in 1986 began running the business out of her home, she said, because it was less expensive and she felt more secure working at home.

The costume shop employs four part-time workers who use five sewing machines housed in a garage and a shed adjacent to her single-story home next to the Hollywood Freeway.

When Corbett originally changed her address on her business license, the city notified her that she was violating the residential zoning laws and ordered her to close her business. But the city never followed up and even renewed her business license in the following years.

Last year, she paid $1,400 for a business license. So Corbett said she figured she could continue working out of her home.

Corbett said her neighbors never complained about her business. But last year, after a family dispute, Corbett was turned in to the city by her oldest son.

What makes Corbett’s case unusual is that, even after a zoning administrator ordered her to close her business, the Board of Zoning Appeals gave her a temporary exemption.

At a hearing last week, the board members at first seemed ready to rule against Corbett.

“If you operate out of your home and I operate out of my home, wouldn’t that change the character of the neighborhood,” asked board Chairman Peter M. Weil. “Where do you draw the line?”

But Corbett eventually won the board over, telling them she would be forced out of business if she couldn’t work out of her home. She added that she runs the Neighborhood Watch organization in her area.

Eventually, the board members agreed that the culprit was not Corbett but a set of outdated and overly restrictive zoning laws. They imposed restrictions to keep Corbett from expanding her business and urged her to lobby the City Council to permanently change the regulations.