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Aug 28

State vs. Local Laws – Which Prevail?

residential traffic singAccording to California’s Homemade Food Bill (also known as CA’s Cottage Food law, AB1616), local governments cannot outlaw or prohibit Cottage Food Operations (CFOs) through zoning laws.  Municipalities can, however, regulate “…spacing and concentration, traffic control, parking, and noise control relating to those homes.”  The law was written, in part, to encourage the startup of small businesses by people making nonpotentially hazardous foods.  It specifically included provisions which would help in that goal such as classifying a CFO as a permitted use of residential property, allowing one employee (in addition to a family or household member), and allowing direct sales (as well as indirect sales) of the food product to consumers.

Danielle, an aspiring Cottage Food business owner, did some investigating and found that nearly every city in San Diego County had one or more restrictions in their business licenses or home occupation permits that conflicted with the state law.  (Individual city ordinances relevant to CFO’s are summarized in Home Business Local Laws.)  Most cities require a home occupation permit for home-based businesses and this is often where the conflicts are found.  Imperial Beach was the only city deemed to be in agreement with AB1616 whereas cities such as Vista have multiple restrictions that seemingly contradict the state law.

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The most common discrepancies forbid having an employee and restrict selling your goods from home.  Understandably, local governments want to keep residential areas from becoming snarled with commercial traffic and noise that would negatively impact areas where we live.  But those laws seem in direct opposition to the Homemade Food Law and its intent.

Some regulations even seem a bit extreme.   One in Vista limits how much your business operation can increase your utility services.  Escondido dictates that “Any vehicle bearing any advertisement related to the home occupation… shall be garaged or stored entirely within a building or structure.”  El Cajon has a bizarre regulation that any “… equipment necessary to perform the home occupation on the premises must be kept in a pickup truck or van… or a trailer that can be towed by a truck or van.”   Good sense would have to prevail here since you are obviously not going to keep your oven in a truck!  Some cities even require you to get your landlord’s permission if you rent in order to obtain a business license.

wait in line mateIt seems for now that most start-up CFOs can function within the local city guidelines.   Initially, young businesses may not have enough customers to attract complaints, or enough demand to need an employee.  But ultimately if they are successful, the question becomes, will the state law preempt the local restrictions?  And, how can we as new business owners help city planners accommodate home-based Cottage Food Operations?

Are you having trouble getting a business license for your Cottage Food Operation?  If so, please let us know.  We may be able to find a recipe for success, yet!

(Much thanks to Danielle for her time researching and compiling this information!)

 

Photos Creative Commons Attribution/Share-Alike License

13 comments

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  1. Michelle

    No trouble yet but wondering if most CFO’s are sole proprieters, LLC or ?? Mainly concerned about the annual costs for LLC ($800 +) and the inherent liability for a sole prop. Would commercial liability insurance be sufficient coverage if not an LLC?

    Thank you.

    1. Cottagefoods

      It is not required, but recommended, that you get liability insurance for your CFO business because homeowner policies will not extend to the CFO business. Estimates for a typical $1Million policy range from $300-$800/year. We typically see rates for policies around $500/year.

  2. Eva

    I am actually in Orange County but haven’t found a group of cottage food owners as yet. I have been approved and am now having issue with getting my city license. They were unaware of cottage food and I am the first. They have been very accommodating this far And was willing to issue my license with my landlords approval, yes I am a renter. Well I didn’t think that would be an issue but my landlord absolutely refused. So my question is, do you know of anything that says a landlord can’t refuse a home business? Thank you in advance!!

    1. Cottagefoods

      UGH! The state allows local governments to regulate business permits as long as they don’t legislate CFOs out. I think local municipalities can specify landlord consent required for home-based businesses, but this is the first time we know of an issue. We will try to find out more. Meanwhile, best if you can identify the landlord’s main concern (wear and tear? increased utilities? …) & try to address it.

      1. Eva

        Ugh is right!!
        Landlord has appearantly had some bad experience with home based businesses in the past. He said he curren has 3 and will no longer allow them. He didnt leave Any room for debate. I thought that I had actually read that the landlord couldn’t refuse a CFO but now I can’t find that article. I spoke to the supervisor at the health department , she has been WONDERFUL, she couldn’t find anything but she did suggest I reach out to the CFO community. (She Said she feels there is power in numbers) So here I am!!! HELP!!

        1. Cottagefoods

          Post on Facebook also.

  3. Puja

    Hi again,
    I just noticed in self inspection check list that I need to have approval from local planning agency. I was planning to go to San Diego to submit class A application. Can I submit the application without having the permission in hand.

    Thanks
    Puja

    1. Cottagefoods

      San Diego Health Dept. recommendeds (& may now require) that you get your business license first. You should at least make sure there are no issues with you getting a local business license. Ultimately, it will save you money to get the license before your CFO permit.

  4. Puja

    Thanks so much for your helpful comments

  5. Sarah

    I’ve been wanting to start selling cottage foods for a long time. If I have never sold my products, where could I start? (I’m new to California) should I get my permits and licenses before I even start? I’m a full time nursing student, full time preschool teacher and my husband is getting out of the military, I want to make a living out of it because the nursing program and working is too much on me but I know my family wouldn’t make it if I don’t have a job. I want to put my heart and soul to this, I’ve always wanted to do this, but I don’t know where to start… any advice?

    1. Cottagefoods

      That is great news! Here are some things to consider before diving in…Read our post “Business or Hobby?” It’s always best to start small. Do some testing of your product(s). Would people pay for it? Can you generate a group of customers at school/work or through friends. How much time would it take? The best option for starting a business (and why the Cottage Food Bill is such a blessing) is to do it on the side while you maintain your regular income. If it looks like there is a demand, you can make a (relatively) small investment and get your Cottage Food permits to launch from home until you are successful enough to move into a commercial kitchen. To see other Getting Started posts, click the GETTING STARTED box under CATEGORIES on the left side of the page.

  6. cecilia

    Hi there,
    I noticed on the list vinegar and mustard.
    would a balsamic vinegarette dressing be okay?

    1. Cottagefoods

      Not sure. The issue is likely to be the microbial safety of the oil mixture. A botulism outbreak in 1989 was associated with a garlic-in-olive oil product that had been stored at room temperature. You should check directly with the local or state health department.

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