Austin weighs allowing front-yard businesses to help residents launch dreams from home

When Jennifer Worth started her Austin vintage framing business with her husband in 2005, the two launched their gift shop, South Austin Gallery, from their garage. They eventually grew into a storefront on South First Street, but in 2016, their building was sold to a corporation, and they were forced to close. Worth restarted her framing business out of her garage once again.

“Having the ability to work out of our garage is what keeps our businesses alive,” she wrote in a letter to the mayor and council. “For someone just starting out, being able to use a small 200-square-foot space at home means they can actually afford to take a risk on an idea without the crushing cost of rent.”

While Austin residents can set up lemonade stands thanks to a 2017 council resolution that exempts lemonade vendors from permit requirements, the city’s land development code prohibits visible storefronts and signage for front yard businesses. But that’s about to change — at least temporarily.

The council approved a resolution Thursday to create a pilot program to develop amendments to the city’s land development code to ease restrictions on neighborhood commercial activity and establish residential-based businesses. After the first year of the program, the city manager will evaluate the initiative and advise the council on its success.

“The Strong Local Commerce Initiative is about expanding real, practical opportunities for Austinites to start small businesses and generate income in their own communities,” Council Member Natasha Harper-Madison, who proposed the initiative, said in a prepared statement.

Harper-Madison said she passed a small business resolution in 2024 that changed the city’s permitting process to make it easier for small businesses to operate. She called the council’s new initiative the next phase of that effort, focusing on creating a more accessible pathway for residents to start businesses in Austin.

“I think it has to do with individuals and all the people who are trying to stay inside the city that they love in the face of very substantial financial challenges for many of our households, in every single district, in this city,” Council Member Krista Laine, who co-sponsored the initiative, said.

Kelley Masters, board president of the nonprofit Homemade Texas, said home-based businesses serve as a launching pad for entrepreneurs.

“A big impediment to a successful cottage food business is actually finding a place to sell your food and finding people to buy your food,” she said, adding that the council’s new program “can help these cottage food producers get a foot in the door with their business and build it organically that way, before they branch out to maybe other opportunities outside their neighborhood.”

Worth said in an interview that beyond affordability, one of the biggest contributions small businesses make to the city is creating a walkable and community-centered space.

“It gets people out walking and getting back [into] the neighborhood and talking to neighbors, which is what Austin was always about,” she added.

But not everyone is on board with the proposal.

“I’m opposed to this item because of the increased hardships that are going to be generated in neighborhoods that don’t have sidewalks and adequate pedestrian infrastructure,” resident Sarah Faust said. “We know that retail businesses in neighborhoods will increase car traffic. The resolution purports to transform residential blocks into active pedestrian safe corridors but it doesn’t add any pedestrian safety measure or bike lanes.”

Laine acknowledged concerns about traffic and infrastructure and said she plans to collaborate with the city manager and other council members to craft the best possible policy.

City Manager T.C. Broadnax is expected to bring the council recommendations for city code amendments and an implementation plan within three months.