California Government Code Section 51035 prohibits Santa Cruz from banning a cottage food operation in a residential dwelling. The city must treat it as a permitted residential use or grant a nondiscretionary permit; Santa Cruz processes these through a home occupation zoning clearance (about $142).
Cottage food operations (home-prepared, low-risk foods such as baked goods and jams) are protected by state law that preempts local prohibition. California Government Code Section 51035(a) provides that a city 'shall not prohibit a cottage food operation, as defined in Section 113758 of the Health and Safety Code, in any residential dwellings,' and must either classify it as a permitted residential use for zoning purposes or grant a nondiscretionary permit upon certification of compliance with reasonable local standards (spacing, concentration, traffic, parking, and noise). A cottage food operation is defined in Health and Safety Code Section 113758, with Class A sales capped at $75,000 and Class B at $150,000 per year and no more than one full-time-equivalent nonfamily employee. In Santa Cruz, a cottage food business still completes a home occupation zoning clearance (the city's published fee is about $142) and otherwise operates within the SCMC Section 24.10.160 home occupation standards, but the city cannot prohibit the use.
Because state law preempts local bans, the city's enforcement is limited to the reasonable standards it may impose (traffic, parking, noise, spacing) and to the cottage food permit/registration administered through the county environmental health and the city zoning clearance. Operating without the required county cottage food registration or city zoning clearance can subject the operator to enforcement under those programs.
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