There are legitimate concerns about the impact of home businesses on neighborhoods, but these concerns are often overblown so it's welcome that some communities are relaxing those rules. The biggest concern, at least for small scale things, is traffic, though perhaps if there are more neighborhood businesses some of the customers will actually walk. Crazy I know.
Requiring separate commercial space for small scale things like hair salons also raises the barrier to entry, increasing the cost and complexity of operating a business.
