diff --git a/.env.dev.local b/.env.dev.local
new file mode 100644
index 000000000..be6a117c6
--- /dev/null
+++ b/.env.dev.local
@@ -0,0 +1 @@
+DATABASE_HOST="localhost"
diff --git a/.gitignore b/.gitignore
index fc1bf385b..e34fe82ea 100644
--- a/.gitignore
+++ b/.gitignore
@@ -36,6 +36,7 @@ frontend/.github/
 .env
 .env.*
 !.env.dev
+!.env.dev.local
 dist
 
 # Node dependencies
diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 43a2b65ad..04a659af7 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -238,15 +238,14 @@ Our backend depends on a connection to a postgres DB, therefore we need to setup
 docker compose --env-file .env.dev up db
 ```
 
-In order to connect to the DB, we need to change the `DATABASE_HOST` environment variable inside the `.env.dev` file first.
+To run locally, set the environment variable `DJANGO_ENV` to `LOCAL_DEV`:
 
 ```bash
-# Current
-DATABASE_HOST=db
-# Changed
-DATABASE_HOST=localhost
+export DJANGO_ENV=LOCAL_DEV
 ```
 
+When this is set, django will load environment variables from `env.dev` first, and then from `.env.dev.local` which will overwrite some variables for local development.
+
 From here we need the project's dependencies, with the practice being to create a virtual environment first within your local activist directory and then install the dependencies within it:
 
 On Unix or MacOS, run:
diff --git a/backend/backend/settings.py b/backend/backend/settings.py
index 7faf23317..a5ff16cff 100644
--- a/backend/backend/settings.py
+++ b/backend/backend/settings.py
@@ -14,7 +14,14 @@
 import django_stubs_ext
 import dotenv
 
-dotenv.load_dotenv()
+PROJECT_ROOT = Path(__file__).resolve().parent.parent.parent
+
+if os.getenv("DJANGO_ENV") == "LOCAL_DEV":
+    dotenv.load_dotenv(override=True, dotenv_path=PROJECT_ROOT / ".env.dev")
+    dotenv.load_dotenv(override=True, dotenv_path=PROJECT_ROOT / ".env.dev.local")
+
+else:
+    dotenv.load_dotenv()
 
 # MARK: DB
 
@@ -27,7 +34,6 @@
 # Build paths inside the project like this: BASE_DIR / 'subdir'.
 BASE_DIR = Path(__file__).resolve().parent.parent
 
-
 # Quick-start development settings - unsuitable for production
 # See https://docs.djangoproject.com/en/4.2/howto/deployment/checklist/