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Home-Based Businesses in California: rules in 9 towns compared
Can I run a business out of my home? Here's how each town answers it. Click a town for the details and the exact ordinance text.
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This page is for Californians running a business from home, from a spare-room office to a home bakery or family daycare. California has no general statewide home-occupation law, so cities set the rules on employees, signs, customer visits and parking. State law does protect a few home businesses. A licensed small or large family daycare home is a residential use by right under Health & Safety Code §1597.45, and a city can't require a use permit or charge a business license fee for one. Under Gov. Code §51035 (AB 1616, effective 2013), cities can't prohibit cottage food operations, though you must register or get a permit from the county environmental health agency. Home kitchens selling meals are allowed only where the city or county has authorized them.
Six of the 9 cities we cover for this topic require a home occupation or home business permit: Hillsborough, Los Gatos, Manhattan Beach, Pasadena, Piedmont and Tiburon. Del Mar, Los Altos and Saratoga allow low-impact home occupations without one. Nearly all limit employees to residents; Tiburon allows one nonresident employee. Customer visits are tightly limited: none in Piedmont or Del Mar, one at a time in Los Gatos, appointments only in Pasadena, and eight a day in Los Altos. Manhattan Beach and Pasadena cap the business at 500 sq ft. Los Altos's code still calls for a use permit for large family daycare, which state law may override. Pick your city below for the details and the municipal code text.
Town-by-town comparison
| Town | Verdict | Short answer |
|---|---|---|
| Los Altos | Allowed | Yes. Home occupations are a permitted use in Los Altos single-family zones, as long as only residents do the work inside the home, with no employees, no business storage and no more than eight client or delivery visits a day. |
| Saratoga | Allowed | Yes, for low-impact businesses. Home occupations are a permitted use in Saratoga's R-1 districts if they follow Article 15-40: the work must happen inside the house by a resident, no non-resident employees, nothing visible from outside, and no offices where clients are regularly met. Medical offices are not allowed as home occupations in residential zones. |
| Los Gatos | Allowed with a permit | Yes, with a home occupation permit from the Planning Director. Los Gatos allows home businesses in any dwelling, but only resident family members may work there, no more than one customer may be on site at a time, and no signs are allowed. |
| Tiburon | Allowed with a permit | Yes, for low-impact businesses. Home occupations are permitted in all residential zones but need a home occupation permit (renewed yearly) and a town business license. They're limited to art and craft work, tailoring and office-only uses, with at most one nonresident employee and no signs or visible displays. |
| Piedmont | Allowed with a permit | Yes, with a home occupation permit from the City Clerk and a city business license. Piedmont's rules are strict: no non-resident employees, no customer visits, no signs, and the business may use only one room (not the garage); cottage food operations get limited exceptions. |
| Manhattan Beach | Allowed with a permit | Yes, with a Home Occupation Permit from the Community Development Director. The business must be run entirely indoors in no more than 500 sq ft, with no on-site employees other than residents, no walk-in visitors without appointments, and nothing visible from outside the property. |
| Pasadena | Allowed with a permit | Yes, with a Home Occupation Permit from the Planning Director and a city business license. The business must stay inside the home (or an accessory building) in no more than 500 sq ft, only residents can work in it, customers must come by appointment between 7 a.m. and 10 p.m. weekdays, and no on-site signs are allowed. |
| Del Mar | Restricted | Yes, but only a very low-impact one. Del Mar allows home occupations in residential zones if the business is run entirely inside the house by a resident family member, with no employees, signs, displays, stock, deliveries or customer traffic. |
| Hillsborough | Allowed with a permit | Yes, with an annual Hillsborough home business permit from the Finance Department. The business must be run entirely inside the home, with no signs and no more traffic or parking than a normal household. |
California state protections for home-based businesses
California has no general statewide home-occupation law. Cities and counties set the rules on employees, signs, customer visits and parking. State law protects a few specific home businesses:
Family child care homes (Health & Safety Code §1597.45):
- A licensed small (up to 8 children) or large (7 to 14 children) family daycare home is a residential use by right under all local ordinances, including zoning. A city can't require a use permit.
- Cities can't charge a business license, fee or tax for operating one, and it isn't a change of occupancy under building codes.
- Local rules may apply only if they are identical to those for other homes in the same zone, whether the home is rented or owned.
Cottage food operations (Gov. Code §51035; AB 1616, effective 2013):
- Cities and counties can't prohibit home cottage food operations. They must allow them as a permitted use or through a permit limited to reasonable spacing, traffic, parking and noise standards.
- A cottage food operation has no more than one full-time-equivalent employee besides family or household members. Class A (direct sales only) is capped at $75,000 a year and Class B at $150,000, adjusted for inflation (H&S Code §113758).
- You must register (Class A) or get a permit (Class B) from the county environmental health agency.
Home kitchens selling meals (microenterprise home kitchen operations): allowed only where the city or county has authorized them, with a permit and a limit of 30 meals a day and 90 a week (§113825).
Common questions about home businesses in California
- Do I need a home occupation permit in California?
- It depends on your city. There's no statewide home-occupation permit. Among the cities we cover, Hillsborough, Los Gatos, Manhattan Beach, Pasadena, Piedmont and Tiburon require one, while Los Altos, Saratoga and Del Mar allow low-impact home occupations without a separate permit if you follow their rules. Many cities also require a business license.
- What is a home occupation?
- A home occupation is a business run inside your home as a secondary use of the residence. City codes typically limit employees to residents and restrict signs, customer visits, storage and anything visible from outside so the home still looks and functions like a home. The exact limits vary by city.
- Can I have employees for a home business in California?
- It depends on your city, but usually only residents. Most cities we cover allow no nonresident employees working on site; Tiburon allows one, with an extra parking space. Cottage food operations may have one full-time-equivalent employee besides family or household members under state law.
- Can I run a daycare from my home in California?
- Yes, if it's licensed. A licensed small (up to 8 children) or large (7 to 14 children) family daycare home is a residential use by right statewide. A city can't require a use permit or charge a business license fee for it, and local rules may apply only if they're identical to those for other homes in the zone.
- Can I sell food I make at home in California?
- Yes, for cottage foods. Cities can't prohibit cottage food operations, but you must register (Class A) or get a permit (Class B) from the county environmental health agency, and annual sales caps apply. Selling home-cooked meals is allowed only where your city or county has authorized microenterprise home kitchens, with a permit and a limit of 30 meals a day and 90 a week.
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