Lacey, WA Home Business: Zoning & Home Occupation Permits (2026)

Chapter 16.69 of the Lacey Municipal Code defines a home occupation in § 16.69.020 as any activity conducted for financial gain or profit in a dwelling unit, clearly incidental or secondary to the residential use, and conducted only by persons residing in the dwelling unit. Garage sales and family day care homes are not home occupations under that definition.

Section 16.69.040(A) permits a home occupation as a matter of right in any residential district in the City of Lacey if four conditions hold. No exterior structural alterations are made to accommodate the occupation. No merchandise or stock in trade is sold or displayed on any exterior portion of the premises. No equipment or material is stored, altered or repaired on any exterior portion of the premises. No person other than bona fide residents of the dwelling unit is employed in the home occupation. Under subsection B, an occupation that fails any of those conditions requires a conditional use permit.

The floor area rules sit in § 16.69.030(A): a home occupation occupies not more than twenty-five percent of the total floor area of the residence, in no event more than four hundred square feet, and an accessory building for it cannot exceed four hundred square feet. Subsection D bars vehicle repair, alteration or rebuilding, and subsection E requires registration as a business under Chapter 5.12 LMC and payment of the business and occupation tax of Chapter 3.02 LMC.

A conditional use permit goes through the hearings examiner under LMC 11.09.020, which applies the review criteria of LMC 11.09.040. Section 16.69.050(B) adds conditions: structural additions must preserve the residential character and stay within the district's development standards, traffic cannot exceed two commercial vehicles per week, off-street parking spaces cannot be reduced below the district minimum, and storage, alterations, repairs, or displays stay entirely inside the residence or a qualifying accessory building. Subsection (B)(5) also sets an employee condition for non-resident workers. Section 16.69.050(A) requires that a home occupation emit no noise, air pollutants, waste products, or other effects detrimental to the neighborhood beyond those normally emanating from residential use.