Proposed vacancy tax expanded to 12 additional neighborhood corridors

Safai to examine impacts food delivery services have on small businesses

The number of commercial corridors that a proposed vacancy tax would apply to expanded significantly Tuesday.

The Board of Supervisors voted unanimously to approve legislation that officially creates 12 more neighborhood commercial districts. That’s in addition to the 28 that were currently in place.

The vacancy tax, introduced by Supervisor Aaron Peskin and placed on the March ballot by a board vote, applies to those types of districts.

The legislation approved this week was introduced by Supervisor Hillary Ronen, but she removed her name from the proposal and recused herself from the vote because “I have learned that my home is within 500 feet of the proposed Cortland Avenue NCD,” she said before the board voted.

The Cortland Avenue NCD is defined as “properties along Cortland Avenue between Bonview and Folsom streets.”

Supervisor Shamann Walton, who also sponsored the legislation, said expanding the areas the tax would impact will help the district he represents. Among the 12 new areas added is the Bayview NCD, defined as properties along Third Street from Yosemite to Jerrold Avenue.

Walton told the San Francisco Examiner that he supports the proposal “to combat blight and make our commercial corridors more vibrant.”

“It will allow us the ability to make sure irresponsible landlords actually rent out their retail space if they are leaving storefronts vacant,” Walton said.

Under the vacancy tax, Proposition D, which is before voters on March 3, landlords of commercial space will pay $250 per linear foot per year starting in 2021 for leaving a space empty for more than 182 days in a year. The fee increases to $1,000 in 2023.

A Planning Department staff memo said that “the tax will only apply to those named NCD’s that existed prior to March 3, 2020.”

“This Ordinance is being considered at this time so that the identified districts are subject to the new vacancy tax should it pass; however, the Department finds that each district in this Ordinance would benefit from becoming a named NC District even if the proposed tax does not pass,” the report said. “Naming each district will help create a sense of identity and allow greater flexibility and control over land use policy.”

The 12 new areas include the Inner Taraval NCD, the Lower Polk Street NCD, Lower Haight Street NCD, the Lakeside Village NCD, the Cole Valley NCD, the San Bruno Avenue NCD, the Mission Bernal NCD, the Geary Boulevard NCD, the Cortland Avenue NCD, the Outer Balboa Street NCD, the Bayview NCD and the Inner Balboa Street NCD.

“I’m delighted that neighborhoods and merchant groups across the city are asking for the vacancy tax to apply to them, and that my colleagues have moved quickly to accommodate those requests,” Peskin said. “We owe it to these newly minted corridors, many of which already have long and interesting stories to tell, to have a fighting chance against the speculators who are leaving storefronts vacant and blighted.”

In other business, Supervisor Dean Preston asked the budget analyst to explore different models for a Universal Dental Care program to cover San Franciscans.

“Just as San Francisco led the way with Healthy San Francisco, and took a giant step forward in recent months on mental health care with Mental Health SF, we can lead on dental health,” Preston said in a statement. “As we fight for the necessary national change, I believe it is time for San Francisco to lead the nation with a robust municipal dental care program.”

Supervisor Ahsha Safai requested a hearing with Peskin to discuss “the effects of on demand and delivery companies’ platforms like Postmates, Uber Eats, Grubhub, Caviar, and the impact that they are having on small businesses here in San Francisco.”

Safai said that “I have heard from countless small business owners that have talked about how the rates at which they are being charged for these delivery services once they become part of their business model are having a significant impact on their bottom line.”

The hearing will include the Small Business Commission and the Planning Department to discuss the delivery fees and their impacts. The hearing will also discuss “ghost kitchens,” or virtual kitchens, which do not have dining, but act as a hub for the delivery platforms.

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