Running a business and working from home is common strategy for people who want to start their own company without investing too much in office space or sacrificing too much time away from their families. This practice is particularly common in New York City where entrepreneurship is increasingly prevalent and the ppsf for commercial real estate is increasingly high.
Typically a home office is considered to be any space used within a personal residence where you conduct a business. In New York City, the zoning resolution working at home is referred as “home occupation” which is an “ accessory use” to a residential building. Unless otherwise indicated by the building’s by laws, a home business is permitted in a residential unit if the work space occupies no more than 25% of the total space or is less than 500sqft. Home occupations generally include, but are not limited to: fine arts studios, professional offices, spaces of instruction for no more than four pupils simultaneously, or, in the case of musical instruction, of not more, than a single pupil at a time.
One of major advantage of the running a business from home is that you may be able to take a home office deduction from your taxes. Generally, the amount you can deduct depends on the percentage of your home used for business.
In additional to running a company from home, there is what is called “professional space.” These are office spaces located within residential buildings that are used to conduct businesses such as medical or professional such as small law firms or design firms. I actually run my own design firm out of a designated professional space in a Midtown coop. These types of spaces are referred to as “accessory” to the residential uses and are designated as so by zoning laws.
NB: According to the DOB, a “professional” space is any non-residential space in a residential zoned district in which the use complies with the provisions of Use Group 3 or 4 of the zoning resolution. Click this link to learn more about zoning regulations pertaining to non-residential uses permitted in a residential zoned districts.
Such spaces were created as complementary to the residential use to add professional activity to the residential districts. Typically these spaces are located at street level with independent entrances or on the building’s ground or second floors.
Recently one of my clients was looking for a new home where she and her family could live, but where she could also run her small business out of. She found an amazing professional space on the upper west side in a coop building. The dilapidated space was located on the building’s ground floor as many professional spaces are in the city. The layout was fantastic, the price was good and the location was where she wanted. The real challenge, though, was how to convert this “ commercial space” it into a residential unit were my clients could live and work.
To convert this zoned professional space (originally a medical office) into a residential unit it was necessary to take the following steps – which full disclosure took a long time. See the below for the steps:
- We had to request permission from the building’s board by declaring our intention of converting the commercial zoned unit into a residential one.
- Once we obtained the permission from the board, we had to submit the project to the Department of Buildings as an Alteration Type 1. We had to do this because we were proposing a change in the certificate of occupancy of the building – i.e. converting a commercial/ professional space into residential one.
- After submitting our request, we received a Temporary Change in the Certificate of Occupancy until they got the final sign off from the DOB. The unit is currently zoned as residential and therefore occupiable for residential living and small-scale commercial activities.
It was a long process but it was worth it and now my client have a three-‐bedroom three-‐bathroom residential unit were they can live & work.
