During the lockdowns last year, 6 out of 10 Americans started new hobbies to keep themselves occupied – 35 percent of them with the intent of making a few bucks off of it. Entrepreneurship helped keep many families afloat and gave folks creative outlets in a time that notoriously frayed America’s collective mental health.
West Virginia needs to realize that this trend isn’t going anywhere, even as the pandemic grows and wanes. If we want to grow a reputation for opportunity and keep its people in state while attracting new people here, it’s vital that we update our laws and regulations for the modern economy.
Unburdening home-based businesses by updating local zoning regulations is a place to start.
Home-based businesses (HBBs) come in all sorts – freelance work, bakeries, day care, auto repair, education, crafting, dog walking – the list is virtually endless. This awesome variety of flexible job opportunities represents an obvious opportunity for policymakers to make West Virginia more business-friendly, and without harming taxpayers, too.
According to the Survey Center on American Life, 27 percent of Americans are looking for a new job or will be looking within the next six months. The same survey shows that among women, 39 percent say flexibility to balance work and family needs is one of the most important factors in choosing a job. HBBs may be a viable option for many looking to return to work, especially those finding traditional employment options to come with too many strings attached.
While West Virginia’s economy has been bouncing back from Covid, the state’s economy is still languishing. With the second-lowest labor force participation rate in the country and the loss of a congressional seat due to out-migration, West Virginia needs a miracle – and those don’t happen overnight. They are built through sound policy decisions that promote growth and freedom. Removing additional burdens to HBBs would put West Virginia on the path toward miraculous growth.
The Cardinal Institute for West Virginia Policy recently released a new paper exploring home-based entrepreneurship in West Virginia. Our research found that as of 2019, small businesses in West Virginia employed 49.2 percent of the entire workforce. Although policymakers often focus on trying to attract large out-of-state corporations with tax incentives, a better way to improve the economy would be to ease the burdens on small businesses in the Mountain State. Taking a long, hard look at HBB regulations is a good place to start.
HBB regulations are zoning regulations overseen by local Boards of Zoning Appeals. Some cities with onerous HBB zoning regulations include Charleston, Wheeling and Martinsburg.
Charleston has a two-tiered system for HBB zoning. Level 1 restricts HBBs to business conducted over the phone and internet. Level 2 allows HBBs to engage in more kinds of business, but they must go before a public hearing for approval, provide an additional off-street parking space, and cannot hire non-resident employees.
Can you imagine? Let’s say you want to start an at-home manicure service because it’s cheaper than having to rent a commercial space elsewhere. This means you have to go before the Board of Zoning Appeals for a public hearing to get your small manicure service approved, in addition to the paperwork. You’d also have to add additional off-street parking to your home, which would take additional time and money. To top it off, if your business grows successfully and you want to hire a second manicurist, you can’t because that person doesn’t live in your home.
Wheeling and Martinsburg have even more absurd regulations. Wheeling prevents Class 1 HBBs from operating out of sheds or garages. Martinsburg limits HBBs to about a dozen obscure types of businesses including city planners and seamstresses.
Zoning regulations like these were originally intended to prevent incompatible uses from occurring in shared space. It makes sense that a neighborhood would not want a miniature chemical plant running out of their neighbor’s home, but the vast majority of HBBs do no harm whatsoever to neighbors. Fear of this unlikely event isn’t a good enough reason to put the boot on people with a dream.
We’re behind, as it is. Policymakers in cities like Seattle, Chicago and Fairfax have all updated their HBB regulations in response to the Covid pandemic. West Virginia, too, has an opportunity to tell its people that entrepreneurship is valued. It should take it – and soon.
— Amanda Kieffer is the communications director for the Cardinal Institute for West Virginia Policy. She is also a contributor with Young Voices.