Home Business in Daly City, CA: What Residents Actually Need to Know

If you live in Daly City or are thinking about moving there, home business are one of those things you probably won't think about until they affect you directly. Daly City has 6 specific rules on the books covering different aspects of home business, and some of them might surprise you.

Home Daycare

California Health and Safety Code Sec. 1597.45 (SB 234) makes small (up to 8 children) and large (up to 14 children) family daycare homes a residential use by right, so Daly City cannot require a home occupation or use permit, or impose a business license, fee, or tax, for operating a licensed family daycare home.

Key details: State Law: HSC Sec. 1597.45 (SB 234, 2020). Zoning Status: Residential use by right. Small Family Daycare: 8 or fewer children. Large Family Daycare: 7 to 14 children. City Business License: Cannot be required.

A family daycare home still requires a state license from the Department of Social Services; operating an unlicensed daycare is a violation of state licensing law enforceable by CDSS. Local nuisance and uniformly applied building and safety codes continue to apply, but Daly City cannot deny, condition, or charge for the residential daycare use itself.

Daly City is more permissive than most cities when it comes to home daycare. That said, there are still limits.

Signage Rules

Daly City bans all signs and displays advertising a home occupation. Applicants must sign an acknowledgment stating they cannot install any sign on their home or yard, because the business may not be evident from outside the dwelling.

Key details: Home Business Signs: Prohibited entirely. Code Basis: DCMC Sec. 17.36.030(F)(3). Also Prohibited: Displays, exterior alterations, outside entrance. Written Acknowledgment: Required on permit application.

Installing a sign or display advertising a home occupation is a violation of the required conditions in DCMC Sec. 17.36.030 and may result in immediate revocation of the home occupation permit under Sec. 17.36.060, in addition to code enforcement action to remove the sign.

Compared to other cities, Daly City takes a harder line on signage rules. The enforcement and penalty structure reflects that.

Cottage Food Operations

Daly City's zoning excludes general 'food preparation' as a home occupation, but state law overrides: residents can run a county-permitted Microenterprise Home Kitchen Operation (MEHKO) or a state cottage food operation. DCMC Sec. 17.36.020 expressly removes MEHKOs from the home occupation rules, deferring to state and San Mateo County permitting.

Key details: City Carve-Out: MEHKOs exempt per DCMC 17.36.020. MEHKO Permit: San Mateo County Environmental Health. MEHKO Meal Limits: 30 meals/day, 90 meals/week. MEHKO Sales Cap: $100,000 gross annual sales. City Requirement: Register as Daly City business.

Preparing and selling food from a home without a San Mateo County MEHKO permit or cottage food registration falls back into the 'food preparation' exclusion of DCMC Sec. 17.36.040 and is an unlawful home occupation, subject to permit denial or revocation and code enforcement. County health permits can also be suspended or revoked for violating the California Retail Food Code.

Home Occupation Permits

Every Daly City resident who runs a business from home must obtain both a Home Occupation Permit (reviewed by the Planning Division) and a city business license (issued by the Finance Department). The HOP fee is $104.00 and the minimum new business license tax is $114.00; both the permit and the license must be renewed annually.

Key details: Home Occupancy Permit Fee: $104.00 at application. Minimum Business License Tax: $114.00 ($110 + $4 state fee). Renewal: Annual; licenses expire September 30. Processing Time: Allow 4-6 weeks minimum. Planning Division: (650) 991-8033.

Operating a home business without the required permit and license violates Title 17 of the Daly City Municipal Code. Under Sec. 17.36.060, any misrepresentation in the application, or a change in conditions or use not in accord with the approved permit, may result in immediate revocation. A planning division denial or revocation may be appealed in writing to the city council within fifteen days (Sec. 17.36.080).

Customer Traffic Restrictions

Daly City prohibits customer or goods pickup and deliveries at a home business, bars employees from reporting to the house, limits traffic to no more than one additional vehicle per hour, and allows service occupations such as tutoring or tax preparation only one customer or student at a time.

Key details: Customer / Goods Pickup: Prohibited at the dwelling. Deliveries: Prohibited at the dwelling. Traffic Cap: Max 1 additional vehicle per hour. Service Clients: One customer or student at a time. Business Vehicles: 1 max; payload under 3/4 ton.

Exceeding the traffic, customer, delivery, or vehicle limits violates the required conditions of DCMC Ch. 17.36 and can trigger immediate permit revocation (Sec. 17.36.060). Under Sec. 17.36.030(I), parking or storing prohibited vehicles on residential property or a public street in a residential district is a prima facie violation even without a home occupation license.

This is one of the stricter rules in Daly City's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

Zoning Restrictions

Under DCMC Chapter 17.36, a home occupation must be clearly secondary to the dwelling, confined to one room no larger than one-fourth of one floor, and conducted so 'the average neighbor, under normal circumstances, would not be aware of its existence.' Garages, accessory buildings, and open space are off limits, and a long list of occupations is excluded outright.

Key details: Code Chapter: DCMC Ch. 17.36 (Home Occupations). Floor Area Limit: One room, max 1/4 of one floor. Garage / Accessory Building: Cannot be used for the business. Interior Storage Cap: 100 cubic feet. Workers: Residents of the dwelling only.

A home occupation that violates the Chapter 17.36 conditions is subject to immediate permit revocation under Sec. 17.36.060. Sec. 17.36.030(I) makes parking or storing prohibited business vehicles on residential property or any public street in a residential district a prima facie violation, whether or not a home occupation license has been obtained.

This is one of the stricter rules in Daly City's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

The Bottom Line

Daly City is tougher than many cities when it comes to home business. Out of the 6 rules covered here, 3 are rated strict. If you are a homeowner, renter, or business owner in Daly City, take the time to understand these requirements before they become a problem. Most violations come with fines, and some repeat violations can escalate.

All of the above reflects Daly City's municipal code as of our last review. If you need specifics on fines, exemptions, or filing requirements, the detailed ordinance pages linked above have the full breakdown.