Supervisor Aaron Peskin speaks at a rally to save Caffe Sapore from closing down at the end of December due to an eviction on Thursday, Nov. 14, 2019. (Kevin N. Hume/S.F. Examiner)

Supervisors vote to place storefront vacancy tax on March ballot

It’s official: San Francisco voters will have a chance March 3 to combat vacant storefronts by taxing landlords who keep commercial spaces empty.

The Board of Supervisors voted 8-0 Thursday to place Supervisor Aaron Peskin’s vacancy tax on the ballot.

Peskin argues that a tax would force property owners to rethink evicting tenants or increasing rents.

The supervisors voted at a special meeting called ahead of a deadline this month for placing the measure on the March ballot. The board is not scheduled to meet again until Dec. 10.

Peskin, who was not at the meeting, wrote in a letter to the board that “absent tools like commercial rent control — which would require a change to state law — the Storefront Vacancy Tax is the best mechanism we have for stabilizing our small business corridors.”

“Virtually all of us have seen storefront vacancies increase along our most vibrant commercial corridors,” said Peskin. “While some of this can be attributed to the rise in online shopping, our own Budget and Legislative Analyst has pointed to other factors, including absentee landlords, speculative rent increases, and failure to rehabilitate or improve commercial space to attract community-serving tenants.”

After the vote, Mayor London Breed’s spokesperson Jeff Cretan said that the mayor has not taken a position yet and is still reviewing the tax.

“The Mayor has been clear that regardless of any taxes, there need to be more reforms to make it easier for small businesses to open and operate,” Cretan said. “While the Board passed the small business streamlining legislation she authored along with Supervisor [Vallie] Brown, there is a lot more to do to reduce the barriers and red tape that make it hard for small businesses to survive in this City.”

The San Francisco Chamber of Commerce also has not yet taken a position, but plans to early next year, said chamber spokesperson Jay Cheng.

Cheng said they were “happy” Peskin added some of the amendments they asked for to give landlords and businesses more time to lease and open without being taxed, such as when applying for a special conditional use permit.

In voting to place the measure on the ballot, Supervisor Ahsha Safai said that he was “cautiously really optimistic” about how the tax would result in less vacant storefronts.

Like Breed, Safai said there was also a need to have “a citywide conversation about streamlining the permitting process for small businesses.”

He added that he felt there should be some changes to the proposed rules, such as giving property owners 18 months to make repairs once getting a building permit not the current one year before they would face the vacancy tax. Such changes could be done with a two-thirds vote by the board if the measure passes.

Peskin was absent from the meeting because he made vacation plans before the vote was scheduled. Supervisors Catherine Stefani and Rafael Mandelman were also absent.

Last week, Peskin rallied outside of Caffe Sapore in North Beach “to protest the speculative rent increase hanging over” the business. While he said there are other vacancies in the area that the “beloved neighborhood living room” could try to relocate to, none of them are offering rents the business can afford.

The vacancy tax would begin at $250 per linear foot of storefront frontage in 2021, increasing to $500 in 2022 and $1,000 in subsequent years.

The revenue would go into a small business assistance fund to help small businesses with operational and maintenance costs.

The fund would “assist small businesses and provide relief to those small businesses adversely affected by blight, crime, and other negative impacts caused by vacant storefronts in San Francisco,” according to the measure.

It would take a two-thirds vote to pass.

jsabatini@sfexaminer.com

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