diff --git a/pkgs/clan-app/.envrc b/pkgs/clan-app/.envrc
index 856067707..30917370b 100644
--- a/pkgs/clan-app/.envrc
+++ b/pkgs/clan-app/.envrc
@@ -1,7 +1,7 @@
 # shellcheck shell=bash
 source_up
 
-watch_file flake-module.nix shell.nix webview-ui/flake-module.nix
+watch_file .local.env flake-module.nix shell.nix webview-ui/flake-module.nix
 
 # Because we depend on nixpkgs sources, uploading to builders takes a long time
 use flake .#clan-app --builders ''
diff --git a/pkgs/clan-app/shell.nix b/pkgs/clan-app/shell.nix
index a87b5b0ff..5c03c4b2f 100644
--- a/pkgs/clan-app/shell.nix
+++ b/pkgs/clan-app/shell.nix
@@ -89,9 +89,10 @@ mkShell {
       popd
 
       # configure process-compose
-      if test -f "$GIT_ROOT/pkgs/clan-app/.local.env"; then
-        source "$GIT_ROOT/pkgs/clan-app/.local.env"
+      if test -f "$CLAN_CORE_PATH/pkgs/clan-app/.local.env"; then
+        source "$CLAN_CORE_PATH/pkgs/clan-app/.local.env"
       fi
+
       export PC_CONFIG_FILES="$CLAN_CORE_PATH/pkgs/clan-app/process-compose.yaml"
 
       echo -e "${GREEN}To launch a qemu VM for testing, run:\n  start-vm <number of VMs>${NC}"