Everyone knows that space is dear in NYC, especially Manhattan. As Mark Twain famously said, “Buy land, they’re not making any more of it.” Given these constraints, one can understand the temptation to spare yourself office rental costs if you happen to have a small workforce and a large space available in your home.

In Manhattan, in areas such as Soho where there are large lofts it is often tempting for the owner to turn a portion of the loft into  an open-plan workspace. There’s a double irony to artist’s lofts being used as office space, as these formerly industrial spaces were given a legal carve-out for artists to use them as living/work spaces (Joint Living and Work Quarters, or JLWQ) in the 70s and 80s. That said, New York regulations on lofts as well as other homes is quite straightforward–and limited.

According to the NYC Zoning Resolution the following criteria must be met in order to use a residence as a home-based business or have a home office.

• The home must be primarily used as a residence. The business aspect “is clearly incidental to or secondary to the residential use.”
• The business must be owned and operated by the person living in the residence.
• Only 1 person not residing in the home may be employed to work there.
• The home office or area of operating the home business occupies no more than 25% of the residence up to a maximum of 500 square feet

Any violation of these rules, especially bringing in a larger workforce, is liable to end in legal trouble for the homeowner. So unless you’re using your home for a small home office with one other employee, resist the temptation to skimp on office space–neither JLWQ nor regular zoning laws would cover your “alternative” office arrangement.