Small businesses/residential

AN ACT Relating to allowing small business establishments in 1
residential zones; adding a new section to chapter 35.21 RCW; adding 2
a new section to chapter 35A.21 RCW; and creating a new section.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. The legislature recognizes the essential 5
role small businesses play in fostering community connections and 6
supporting local economies. In Washington, small businesses make up 7
99.5 percent of all businesses and employ over 1,400,000 individuals, 8
representing 49 percent of the state's workforce. Businesses that 9
serve families, such as early learning, child care and education 10
programs, and those that create community spaces, like neighborhood 11
cafés, are critical to building strong social ties and vibrant, 12
walkable neighborhoods that enhance residents' quality of life. 13
Allowing certain small businesses to operate in residential zones can 14
strengthen community bonds, support families, reduce emissions, and 15
promote local employment and entrepreneurship. This legislation 16
encourages cities and towns to facilitate the establishment of 17
compatible small businesses within residential areas, contributing to 18
vibrant, resilient neighborhoods while preserving their character and 19
livability.20
S-0702.1
SENATE BILL 5421
State of Washington 69th Legislature 2025 Regular Session
By Senators Shewmake, J. Wilson, Bateman, Chapman, Frame, Hasegawa,
and Nobles
Read first time 01/22/25. Referred to Committee on Local Government.
p. 1 SB 5421
NEW SECTION. Sec. 2. A new section is added to chapter 35.21 1
RCW to read as follows: 2
(1) A city or town must allow neighborhood businesses to be 3
permitted in any zone allowing residential uses, provided that the 4
following conditions are met: 5
(a) The total gross floor area of the neighborhood business does 6
not exceed the maximum limits specified in the definition of 7
neighborhood business in subsection (3) of this section; and8
(b) The neighborhood business does not include drive through 9
facilities. 10
(2) Cities and towns may adopt regulations governing the 11
following aspects of neighborhood businesses to ensure compatibility 12
with surrounding residential areas, including reasonable limits 13
related to: 14
(a) The hours of operation, as long as at least 12 hours of 15
continuous operation is allowed, to minimize noise and disruption 16
during nighttime hours, except as it relates to early care and 17
education programs; 18
(b) Mitigation of noise levels, including soundproofing, 19
amplified music, and outdoor activities during certain hours;20
(c) The size, type, and placement of signage to prevent visual 21
clutter and maintain the aesthetic character of the neighborhood;22
(d) The timing and routing of deliveries to minimize traffic 23
congestion and noise associated with freight activities;24
(e) Neighborhood businesses located on a street or in an area 25
where there is more than one means of egress for vehicle traffic to 26
minimize congestion and ensure safety; and 27
(f) The sale and consumption of alcohol by neighborhood 28
businesses, provided that such regulations do not impact businesses 29
operating with existing licenses or permits for the sale of alcohol. 30
Regulations governing the sale and consumption of alcohol by 31
neighborhood businesses cannot be more restrictive than current 32
liquor and cannabis board regulations. 33
(3) For the purpose of this section, "neighborhood business" 34
means any of the following: 35
(a) An establishment that serves a limited menu of food items 36
that may include alcohol, and has at least 500 square feet of gross 37
floor area, not exceeding 2,000 square feet, and where outdoor 38
seating is limited to no more than 30 percent of the gross floor 39
area; (b) A retail establishment primarily engaged in the sale of 40
p. 2 SB 5421
groceries, household goods, or locally produced products, with a 1
gross floor area not exceeding 10,000 square feet; 2
(c) A facility licensed by the department of children, youth, and 3
families to provide regular early childhood education and early 4
learning services for a licensed capacity to serve no more than 45 5
children for periods of less than 24 hours, and meets the square 6
footage requirements based on licensed capacity. The department of 7
children, youth, and families may adopt rules to implement 8
neighborhood-based child care programs and may waive or adapt 9
licensing requirements when necessary to allow for the operation of 10
such neighborhood-based early learning programs; or11
(d) A business providing professional services, such as 12
accounting, legal, massage therapy, social work, or consulting 13
services, with no more than three full-time equivalent employees and 14
generating minimal noise or traffic. 15
NEW SECTION. Sec. 3. A new section is added to chapter 35A.21 16
RCW to read as follows: 17
(1) A code city must allow neighborhood businesses to be 18
permitted in any zone allowing residential uses, provided that the 19
following conditions are met: 20
(a) The total gross floor area of the neighborhood business does 21
not exceed the maximum limits specified in the definition of 22
neighborhood business in subsection (3) of this section; and23
(b) The neighborhood business does not include drive through 24
facilities. 25
(2) Code cities may adopt regulations governing the following 26
aspects of neighborhood businesses to ensure compatibility with 27
surrounding residential areas, including reasonable limits related 28
to: 29
(a) The hours of operation, as long as at least 12 hours of 30
continuous operation is allowed, to minimize noise and disruption 31
during nighttime hours, except as it relates to early care and 32
education programs; 33
(b) Mitigation of noise levels, including soundproofing, 34
amplified music, and outdoor activities during certain hours;35
(c) The size, type, and placement of signage to prevent visual 36
clutter and maintain the aesthetic character of the neighborhood;37
(d) The timing and routing of deliveries to minimize traffic 38
congestion and noise associated with freight activities;39
p. 3 SB 5421
(e) Neighborhood businesses located on a street or in an area 1
where there is more than one means of egress for vehicle traffic to 2
minimize congestion and ensure safety; and 3
(f) The sale and consumption of alcohol by neighborhood 4
businesses, provided that such regulations do not impact businesses 5
operating with existing licenses or permits for the sale of alcohol. 6
Regulations governing the sale and consumption of alcohol by 7
neighborhood businesses cannot be more restrictive than current 8
liquor and cannabis board regulations. 9
(3) For the purpose of this section, "neighborhood business" 10
means any of the following: 11
(a) An establishment that serves a limited menu of food items 12
that may include alcohol, and has at least 500 square feet of gross 13
floor area, not exceeding 2,000 square feet, and where outdoor 14
seating is limited to no more than 30 percent of the gross floor 15
area; 16
(b) A retail establishment primarily engaged in the sale of 17
groceries, household goods, or locally produced products, with a 18
gross floor area not exceeding 10,000 square feet;19
(c) A facility licensed by the department of children, youth, and 20
families to provide regular early childhood education and early 21
learning services for a licensed capacity to serve no more than 45 22
children for periods of less than 24 hours, and meets the square 23
footage requirements based on licensed capacity. The department of 24
children, youth, and families may adopt rules to implement 25
neighborhood-based child care programs and may waive or adapt 26
licensing requirements when necessary to allow for the operation of 27
such neighborhood-based early learning programs; or28
(d) A business providing professional services, such as 29
accounting, legal, massage therapy, social work, or consulting 30
services, with no more than three full-time equivalent employees and 31
generating minimal noise or traffic. 32
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p. 4 SB 5421