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3 Licensing laws and zoning regulations
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3 Licensing laws and zoning regulations
Zoning laws are the planning laws which designate certain areas for exclusive residential, commercial or industrial use. The main issue for SMME development is the use of residential plots by micro or small businesses. Each country report presented in this chapter also examines the relationship between zoning laws and licensing laws, and considers the practical problems (if any) which have arisen in relation to the enforcement of zoning laws.
3.1.1 Zoning policy
The Government’s zoning policy is implemented by the Ministry of Local Government, Lands and Housing, in accordance with the Town and Country Planning Act [Cap 32:09]. In terms of the policy, certain areas are designated for exclusive residential, commercial or industrial use. The use of residential plots for business purposes is prohibited. Consultations conducted by the independent SMME Task Force in 1997 revealed particular frustration with the zoning policy. The SMME Task Force reported that for many years, a lack of premises has been a major constraint to small business development in Botswana: at present, some 70-75% of micro and small businesses throughout the country are being forced to operate, often unlawfully, from residential plots. The vast majority of these businesses were found to be operating peacefully without inconveniencing anyone, nor damaging the environment. In the view of the Task Force, the zoning policy which underlies the present division of plots into residential and commercial areas is unreasonably constraining the development of entrepreneurship, and should be changed.
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The Task Force therefore recommended that the zoning policy should be revised as a matter of urgency, so that residential plots can be used by micro and small enterprises for business purposes, subject to the need to protect the environment and to protect users of neighbouring plots against unreasonable nuisances
The Task Force noted that potential objections to revision of the zoning policy are well known, and can be accommodated by the drafting of appropriate regulations which balance both the interests of the entrepreneur and those of the local community. It was therefore recommended that micro and small enterprises should be permitted to operate on residential plots, subject to an exclusion list of business activities that are prohibited on grounds of being environmentally harmful or potential nuisances. This exclusion list should include the following:
- Bars and discotheques
- Bottle stores
- Garages
- The manufacture (or use) of hazardous chemicals
- Hairdressing conducted outside a confined area.
This recommendation was rejected by Government in a brief statement in its ‘Policy on Small, Medium and Micro Enterprises in Botswana’: „Government does not agree with the use of residential property for businesses. Instead, provision will be made to develop blocks of shells or stalls for use by micro and small businesses"
This is probably the most controversial issue in the Government’s policy document. The Task Force estimated that there are over 40,000 micro and small businesses currently operating from residential plots. The task of providing blocks of shells or stalls for this number of businesses will be massive.
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The Government’s policy document does not indicate where the funding for this project will be found, nor how long it will take to accomplish.
3.1.2 Relationship of licensing laws and zoning regulations
The zoning regulations are reinforced by the licensing laws in that a business must obtain the appropriate type of plot (commercial or industrial) in order to obtain a licence.
3.1.3 Numbers and characteristics of businesses thatare in breach of zoning regulations
As discussed above, the SMME Task Force reported that at present, some 70-75% of micro and small businesses throughout the country are operating from residential plots.
3.1.4 The enforcement of zoning regulations
In April 1999, the Ministry of Local Government started to implement the Government’s restated zoning policy by sending notices to approximately 750 small businesses located on rezoned residential plots in central Gaborone. The notice ordered the businesses to close (or relocate to other premises, of which virtually none were available) by May Thea. Instead of closing (which would have involved approximately 6 000 retrenchments), these businesses have petitioned ministers and attracted considerable sympathy in the private press. One of the arguments used against closure is that the policy unfairly targets citizen-owned businesses which cannot compete with expatriate owned businesses in paying the rents demanded for scarce commercial plots. In response to questioning by opposition party MPs, the minister responsible subsequently stated in the National Assembly that enforcement of the closure
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orders will be deferred for a two year period, in order to allow the businesses affected to find alternative premises.
3.2.1 Zoning policy
In Mauritius, there has been an increasing number of complaints about the use of residential plots for business purposes in recent years. Zoning regulations are regarded as extremely important for sustainable development in a small country such as Mauritius. Government is very conscious of the need for such policies and has prepared the National Physical Development Plan to attain the objectives of sustainable development.
The fundamental goals of the National Physical Development Plan (NPDP) have been stated as:
- the improvement of the quality of life of the Mauritian citizen;
- the development of the key sectors of the economy;
- the judicious siting of secondary and tertiary activities;
- the protection of agricultural areas; and
- the conservation of the natural heritage
The NPDP is thus founded on a desire to ensure the sustainable use of resources and to strike a balance between economic development and protection of the environment. Although the NPDP does not identify specific sites for development, it outlines the strategic goal of ensuring the future provision of land for housing, industry and other land use activities which accommodate growth and change in the country’s population and economy. More detailed land use proposals showing, for example, the exact location of new houses and industry is set
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out in the Outline and Detailed Schemes, which are provided for in the Town and Country Planning Act 1994.
For purposes of the NPDP, the island of Mauritius has been divided into 26 planning zones which in turn have been grouped into 6 planning regions and conurbations and rural areas. The guiding principles in the planning strategy are designed to utilise underdeveloped land within built up areas, to avoid environmentally sensitive areas, to ensure efficient use of infrastructure services, to locate major new employment areas close to main centres of population and to concentrate development so as to maximise economies of scale.
The responsibility for the implementation of the zoning policy primarily rests with the local authorities, as provided in the Town Country Planning Act, which also stipulates the procedures for declaring a zone for a specific purpose and/or conduct of activities within the area. The procedures require public consultation through press advertisement. The Town and Country Planning Board established under the Act is located at the Ministry of Lands and Housing and carries the responsibility to examine all such zoning requests from the local authorities.
3.2.2 Relationship of licensing laws and zoning regulations
The view in Mauritius is that there is a close relationship between zoning policy and licensing laws, since both are concerned with enhancing the development efforts undertaken by the local authorities, which have also to ensure the ‘orderly and balanced’ development of their areas.
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3.2.3 Numbers and characteristics of businesses that are in breach of zoning regulations
There is no data on this issue. Informal discussions suggest that businesses which most commonly evoke complaints from neighbours are those manufacturing businesses which emit noxious fumes or noise, such as furniture making, mechanical workshop and food processing.
3.2.4 The enforcement of zoning regulations
Breach of zoning regulations has serious legal implications including heavy penalties, the cancellation of business licenses and permits, and re-location of the business. The greatest problems arise with those business activities established prior to any restrictions imposed by the zoning regulations, and which continue to operate.
3.3.1 Zoning policy
The Town Planning Ordinance, 18 of 1954 gives local authorities the responsibility for town planning and designation of zones for economic or residential activity. The function of town planning is to create, maintain and improve the functional efficiency and environmental quality of a locality. Town planning thus has a direct influence on the development of SMEs, and is responsible for zoning and re-zoning.
3.3.2 Relationship of licensing laws and zoning regulations
As in most other countries of the region, the zoning regulations in Namibia are reinforced by the licensing laws in that a
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business must obtain the appropriate type of plot (commercial or industrial) in order to obtain a licence.
3.3.3 Numbers and characteristics of businesses that are in breach of zoning regulations
Although it is estimated that there are large numbers of SMEs in breach of the zoning laws, the authorities have been prepared to adopt a flexible approach in approving applications by business owners to use residential plots on a case-by case basis. The main criteria used in considering such applications are whether the business is likely to cause a nuisance or damage the environment.
The total number of businesses in breach of zoning regulations is unclear, although it is estimated that there are between 5000 and 6000 hawking businesses in Katutura (formerly the black township of Windhoek) and its surrounding areas. A variety of trading, manufacturing and service occupations are conducted from residential premises. Land uses which will be considered for consent as legitimate home-based occupations include general offices, professional practices, small-scale home industries, agencies which carry no stock other than samples and the like. However, businesses such as panel beater, car mechanic, general welder and joiner would not be granted permission, and therefore will be in breach of zoning regulations. Hawkers are also often in breach of zoning regulations.
3.3.4 The enforcement of zoning regulations
Town Planning Departments oversee the enforcement of zoning policies. Where there is a detected breach of zoning policy, the respective Town Planning Department may investigate and, if the need arises, send in the police as the final law enforcement
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tool. As most local authorities only have one or two town planners, shortage of staff is a serious problem in enforcing zoning policies.
Specific problems arise in the newly proclaimed local authorities (that is most authorities other than Windhoek), which are not yet well established. In such areas, zoning policies have not created a SME-friendly environment. In contrast, the Windhoek Municipality issues pamphlets encouraging home-based small-scale activity. These brochures inform citizens and potential entrepreneurs about municipal by-laws and other regulations in the municipal area including the enforcement of zoning policies.
3.4.1 Zoning policy
In South Africa, there appears to be no uniform zoning policy. Whether a business may be conducted from a residential plot depends on the policy of the local authority. Ntsika found during its consultation process prior to its national small business regulatory review that there were still problems with regard to by-laws and zoning regulations in certain areas, relating to whether particular areas can be used for residential, business, or both purposes. There was still differential application of bye-laws in respect of the dual use of land in different parts of the country. "Some local governments used the policies in a conducive way whilst others were restrictive. In the early childhood development field, by-laws, and in particular the health regulations in many municipalities, were more stringent (than) the Child Care Act and hindered the development of creches" (Ntsika, 1999, p. 82).
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3.4.2 Relationship of licensing laws and zoning regulations
In those municipalities which apply zoning regulations, the zoning regulations are reinforced by the licensing laws in that a business must obtain the appropriate type of plot (commercial or industrial) in order to obtain a licence.
3.4.3 Numbers and characteristics of businesses that are in breach of zoning regulations
Information on this issue is not available.
3.4.4 The enforcement of zoning regulations
Riley observes that ".... although central government policies toward black enterprises have changed dramatically in recent years, old attitudes and practices die hard, and pockets of resistance to the official, more liberal attitude toward black enterprises remain well entrenched at the local level. In conservative areas, microentrepreneurs continue to experience harsh forced removals, arrests, fines, and confiscation of goods" (p. 29).
3.5.1 Zoning policy
In Tanzania, the consultant reports that there are no zoning laws (which means that businesses may be lawfully conducted in any area).
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3.5.2 Relationship of licensing laws and zoning regulations
In the absence of zoning laws, this issue does not arise.
3.5.3 Numbers and characteristics of businesses that are in breach of zoning regulations
In the absence of zoning laws, this issue does not arise.
3.5.4 The enforcement of zoning regulations
In the absence of zoning laws, this issue does not arise.
3.6.1 Zoning policy
Government policy on zoning is implemented through the Town and Country Planning Act, Cap. 283, which provides that the various types of development such as residential or business should take place in areas properly designated for such developments by the central government or local authorities. Section 18 (2) of the Act permits applications by members of the public to change the use of a residential building to a business use.
3.6.2 Relationship of licensing laws and zoning regulations
The zoning regulations are reinforced by the licensing laws in that a business must obtain an appropriate plot in order to obtain a licence. For example, where there is an application for a Trade Licence, Section 15 (1) b, c, d, and e of the Trades
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Licensing Act, Cap. 393 provides that the application should be refused where:
- the issue of such a license should not be likely to cause nuisance or annoyance to persons residing, or occupying premises, in the neighbourhood of the premises in respect of which the license is sought; or
- the premises on which the applicant intends to conduct his business would not conform to the requirements of any law for the time being in force; or
- the issue of such license would conflict with any approved or proposed town planning scheme or zoning area; or
- the issue of such license would operate against the public interest.
If no conflict exists, then once the proposed changes to the building are agreed with the Local Authority, the applicant may make payment of the required fee for a change of use, and thereafter developments can commence. Upon completion of the agreed developments on the building, the applicant may apply for the relevant operating license.
3.6.3 Numbers and characteristics of businesses that are in breach of zoning regulations
The current Structural Adjustment Programme has resulted in many job losses, and many of those who remain in formal employment have found that their income is insufficient for their family needs. As a result, large numbers of people are operating informal businesses in residential areas in breach of the zoning regulations. Such businesses include:
- Hair salons,
- Shebeens,
- Schools, kindergartens,
- Motor vehicle garages, and
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- Small grocery shops.
3.6.4 The enforcement of zoning regulations
A business which is operating without a license and is therefore in violation of the zoning laws is liable to be shut down by the Local Authority.
3.7.1 Zoning policy
In Zimbabwe, since 1994, the use of residential premises for business activities such as guest-houses, shops and offices, warehousing, travel bureaux (as well as industrial processes which use machinery that operate without detriment to the amenity of the area) is now permitted. As a result, the number of businesses operating from residential areas has increased greatly.
There are three pieces of legislation which govern the use of land in Zimbabwe: the Regional, Town and Country Planning Act, the Urban Councils Act and the Rural District Councils Act. These Acts, broadly speaking, designate areas into commercial, residential, industrial and agricultural zones. The general rule is that each of these zones can only serve the purpose for which it was specifically designated. By virtue of zoning regulations, business activities can only take place in their prescribed areas. However, the application of zoning regulations is not uniform throughout the country, and differs from one local authority to another, especially in relation to the operations of the informal sector.
Statutory Instrument 216 of 1994 amended certain regulations made under the Regional, Town and Country Planning Act. The
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effect of these amendments is that the operation of certain business activities may be permitted in residential areas provided:
- the activity does not cause a nuisance to neighbours,
- the predominant use remains residential
- the equipment used and goods produced are not publicly displayed
- the enterprise is run by a single family and
- the business is meant only to serve persons in the immediate locality.
By virtue of this statutory instrument, businesses such as guest-houses, shops and offices, warehouses, travel bureaux as well as industrial processes using machinery that operates without detriment to the amenity of the area are now permitted in areas zoned as residential. As a result, the number of businesses operating in such areas has increased considerably.
3.7.2 Relationship of licensing laws and zoning regulations
The licensing laws supplement the zoning regulations. A retail or factory license can only be granted if the zoning laws permit such establishments.
3.7.3 Numbers and characteristics of businesses that are in breach of zoning regulations
So far as we are aware, this issue has not been researched in recent times. The country consultant could not establish the number of businesses that infringe the zoning laws, nor their characteristics. However, casual observation suggests that there is widespread disregard of zoning regulations by unlicensed informal sector operators.
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3.7.4 The enforcement of zoning regulations
Because of the economic hardship affecting the country, the political leadership and local councils have tended to turn a blind eye to the enforcement of zoning regulations. A policy of strict enforcement would deprive many people of their only source of income and render them destitute. When attempts have been made by the authorities to enforce these laws, they have been met with vigorous resistance from the affected informal sector operators.
Throughout the region, zoning laws pose a special challenge to small enterprise development:
- In Botswana, the independent SMME Task Force considered that a lack of business premises has been a major constraint to small business development in Botswana, and estimated that at present, some 70-75% of micro and small businesses throughout the country are operating unlawfully from residential plots. The Task Force recommended that the zoning policy should be revised, so that residential plots can be used by micro and small enterprises for business purposes, subject to the need to protect the environment and to protect users of neighbouring plots against unreasonable nuisances. This recommendation was rejected by Government, and it remains to be seen how Government will deal with the estimated 40,000 small businesses that are today in breach of the zoning laws.
- In Mauritius, there has been an increasing number of complaints about the use of residential plots for business purposes in recent years.
- In Namibia, although it is estimated that there are large numbers of SMEs in breach of the zoning laws, the authorities have been prepared to adopt a flexible approach in approving applications by business owners to use
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- In South Africa, there appears to be no uniform pattern, and whether businesses may be conducted from residential plots depends on the policy of the local authority.
- In Tanzania, the consultant reports that there are no zoning laws (which means that businesses may be lawfully conducted in any area).
- In Zambia, the Structural Adjustment Programme has resulted in many job losses, and many of those who remain in formal employment have found that their income is insufficient for their family needs. As a result, large numbers of people are operating informal businesses in residential areas in breach of the zoning regulations; and
- In Zimbabwe, since 1994, the use of residential premises for business activities such as guest-houses, shops and offices, warehousing, travel bureaux (as well as industrial processes which use machinery that operate without detriment to the amenity of the area) is now permitted. As a result, the number of businesses operating from residential areas has increased greatly.
residential plots on a case-by case basis. The main criteria used in considering such applications are whether the business is likely to cause a nuisance or damage the environment.
© Friedrich Ebert Stiftung | technical support | net edition fes-library | November 2000
