Commercial Real Estate in Hillsborough: An All-Residential Town, Home Business Permits and Special Uses

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Hillsborough is unusual even by Peninsula standards: its zoning code has no commercial, office or industrial districts at all. The town has been zoned residential since a 1937 ordinance, and its three current districts allow homes, a few town and institutional uses, and tightly controlled home businesses. Shops, offices and restaurants serving Hillsborough residents are in neighboring Burlingame and San Mateo. This page explains what business use the town does allow, so buyers and owners know where the limits are. Confirm any use with the Town of Hillsborough before relying on this page.

Who controls the parcel

Hillsborough is an incorporated town, and its Title 17 zoning code applies to every parcel inside its limits. Commercial property on the edges of town, such as along El Camino Real or in downtown Burlingame and San Mateo, belongs to those cities; see our Burlingame commercial guide and San Mateo commercial guide. A parcel with a Burlingame or San Mateo mailing address may still be in Hillsborough, so check the town boundary first.

Hillsborough zoning: what each district allows

Chapter 17.16, last amended by Ordinance 792 on January 8, 2024, says its use table lists all of the uses permitted in each district. A blank cell means the use is prohibited.

Home businesses: the main commercial use in Hillsborough

Running a business from a Hillsborough home requires an annual home business permit. The permit requirement dates from Ordinance 591 in 1999, and the operating rules are in Section 17.16.015.

• Application. Residents apply through the Finance Department and pay an annual, nonrefundable fee set by Council resolution. Permits last up to 12 months and must be renewed by June 30.
• Inside the home. The business must be conducted entirely within the dwelling, entered from inside, and clearly secondary to residential use. No unusual alterations are allowed.
• No outside signs of business. No signs anywhere in town may identify the business. Foot traffic, vehicle traffic and parking cannot exceed what is normal for a similar home.
• Commercial vehicles. Commercially marked vehicles may not park on any street, parking strip or right-of-way in town.
• Nuisances. No noise, dust, odors, fumes or radio interference.
• Cannabis. Commercial cannabis sales, delivery and storage beyond personal use are barred.
• Enforcement. Violations are infractions and grounds for immediate revocation.

Section 17.16.020 also treats some activities as commercial use of a residence unless a home business permit is in place. These include having someone on site mainly to help with the business and arranging paid pickups or deliveries within town.

Schools, clubs, film shoots and other special uses

Private schools. Private schools need a special permit in every district, and Section 17.16.030 requires a permit from the City Council to operate one. A buyer looking at a school campus should get the permit, its conditions and any enrollment or traffic limits.

Clubs. A country club is a permitted use in RD-1, including the social and commercial activities normally conducted at one. The code lists the Hillsborough Racquet Club as a legal nonconforming use, so its rights depend on nonconforming-use rules rather than on a permitted-use listing.

Public schools and town facilities. Public schools are permitted in RD-1, and RD-3 covers town facilities on town-owned land.

Film production and fundraisers. Commercial filming and fundraising events need a special permit in all three districts. Owners of large estates who host shoots or events should get one before each use.

Signs. Sign rules are in Chapter 17.48; a home business may not have any identifying sign.

Transfer tax, business tax and property tax

The San Mateo County Assessor-County Clerk-Recorder collects documentary transfer tax at 55 cents per $500, or $1.10 per $1,000, when a deed records. Assumed liens may be deducted, and exempt transfers need a transfer tax affidavit. The County page names only the City of San Mateo as adding a city tax; we did not find a Hillsborough transfer tax, but confirm on the escrow estimate. Hillsborough’s home business permit fee is set by Council resolution, and ADU rentals are expressly not treated as a business under the town’s business license chapter. A sale generally triggers Proposition 13 reassessment.

Due diligence that matters in Hillsborough

Start with our commercial due diligence checklist, then add:

• Confirm the parcel is in Hillsborough and not in Burlingame or San Mateo.
• For any institutional property, pull the special permit or Council permit and every amendment.
• For a club or other nonconforming use, review what the nonconforming rules allow for expansion or rebuilding.
• If you plan to work from home, confirm the business fits the home business rules before closing, including the vehicle parking limits.
• Ask about special permits for any filming or event use you plan.
• Review nearby commercial options in Burlingame and San Mateo for any use the town does not allow.

Questions people ask

Sources & notes

1. Hillsborough Title 17, Zoning (GoCodebook)
2. Chapter 17.16, Uses Permitted
3. Section 17.16.015, Home Business
4. Chapter 5.06, Home Business Permit
5. Chapter 17.52, ADUs and JADUs
6. San Mateo County Assessor-County Clerk-Recorder, documentary transfer tax

Note: We did not review the zoning map, the sign chapter, the nonconforming-use chapter or the current home business fee resolution.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

Related: Hillsborough real estate guide · Multifamily property in Hillsborough · Commercial real estate services