Last November, a few entrepreneurs tried to open an ice cream shop, signing a lease on a small Mission storefront that had been vacant for over a decade. Logically, the next step would have been to open their doors, but that’s not what happened.
Instead, city rules allowed a competing ice cream shop up the street to pay a small fee to bring the entire operation to a screeching halt. It was seven months before the Planning Commission finally held a hearing on the complaint, by which point they had spent tens of thousands of dollars on an empty storefront they were prohibited from using. After a lengthy hearing, extensive legal assistance and public outcry, they finally received their permit—but as of this writing, have yet to open.
San Francisco is facing an unprecedented wave of small business closures in the wake of COVID-19, and we will have to work hard to rebuild our economy. But how can we rebuild our economy, if we make it this hard to sell ice cream?
This November, voters can help small businesses survive with Proposition H, the Save Our Small Businesses ballot measure introduced by Mayor London Breed. This bill helps San Francisco’s mom-and-pops get back on their feet by speeding up permitting time, bringing much needed foot traffic to struggling commercial corridors, and giving existing merchants the flexibility needed to survive.
San Francisco’s small businesses are in a state of collapse. It is easy to point at the pandemic as the proximate cause, but COVID-19 lays bare an issue that goes back many years.
The process of opening a store or restaurant has turned into a Herculean task. Finding a storefront and knowing where you can operate now requires an encyclopedic knowledge of our labyrinthian Planning Code. Obtaining a permit is so complex and cumbersome that many merchants are forced to hire third-party expediters, and the average approval time for a permit has climbed to an outrageous 10 months, with some merchants waiting years before they are allowed to open their doors. The situation is so bad, commercial real estate agents now tell their clients to have at least $350,000 on hand before signing a lease. This slams the doors shut on many would-be entrepreneurs, particularly minorities, immigrants and women.
The message conveyed to small businesses is one of indifference, bordering on hostility: You probably shouldn’t start a business, but if you do, we aren’t going to make it easy for you.
Proposition H helps remedy these outrageous waiting times by reducing permit processing time from 10 months to 30 days or less. It helps new businesses open sooner by streamlining noticing requirements, expediting inspections, waiving fees and fast-tracking any permits that are delayed by mistakes made by city staff. The measure gives restaurants crucial tools to survive, including backyard patios, parklet table service, co-working spaces in the back, and expanded criteria for bona fide eating establishments. It also helps struggling nonprofits and arts organizations by allowing them to rent storefronts, and increases foot traffic in business corridors by allowing professional services like lawyers and accountants on the upper floors of commercial buildings. Finally, these changes are not locked in perpetuity: Proposition H has a three-year term, after which the Board of Supervisors can choose to change, or eliminate it, with a simple majority vote.
Small businesses employ nearly half of all workers in San Francisco. Many of those employed are members of vulnerable populations already hit hard by the pandemic. They may count on their jobs for health care, and many have little in the way of savings. The City also depends on tax revenue from small businesses to fund critical services, like the San Francisco Municipal Transportation Agency, which relies on sales taxes. A third of our sales tax revenue comes from restaurants — the same group of merchants who have seen their revenue decline over 90% since the pandemic started. If we don’t help them, we risk losing not only our neighborhood taquerias and book stores, but also a city budget that funds vital programs for residents.
San Francisco will have to work hard to rebuild its local economy. We will never fully recover unless we help our homegrown businesses get back on their feet. Proposition H plays an important role on this front. It gives new entrepreneurs confidence in opening, while providing current businesses with the flexibility they need to survive. Please join us in voting yes on Proposition H to save our small businesses.
Sharky Laguana is a small business owner, and president of the San Francisco Small Business Commission. Laurie Thomas is a small business owner, and executive director of the Golden Gate Restaurant Association. Robert Fruchtman is a resident of Lower Haight and local policy analyst.