If San Francisco’s small business ecosystem was a wobbly tower of Jenga blocks in early March, the coronavirus was the clumsy kid at the table who knocked the tower down with a single tap.
As Sharky Laguana, the President of San Francisco’s Small Business Commission, puts it: “A straw would have already broken the camel’s back, and the pandemic was a five-ton anvil.”
Can Prop. H, a measure put on the November ballot by Mayor London Breed to streamline permit approval and fill vacant storefronts, help build the Jenga tower back up again?
The short answer: It’s a step in the right direction for a city known for being an exceptionally difficult place for small businesses to operate. Even before the pandemic, San Francisco was deemed the most difficult city in the nation for starting and operating a small- or medium-sized business, according to the 2019 Arizona State University “Doing Business in North America” report.
“We are in a moment where the cost of inaction is greater than the cost of action,” said Laguna. “We don’t have the luxury of sitting around and gazing at our navels wondering how we progress.”
Already, the city has implemented emergency measures, such as deferring business taxes and licensing fees for small businesses and implementing an eviction moratorium, but Laguana and others say much more is needed.
Prop. H would make it easier for new businesses to open and for existing businesses to make changes.
The way Cynthia Huie, a small business owner and Small Business Commissioner, explains it: “The heart of Prop. H is giving small business owners a tool in flexibility.”
Currently, the permitting process poses a significant hurdle for small businesses. Business owners pay steep fees and often wait as long as a year for their permits to be approved while paying rent.
“It is outrageous that it should take 16 months and $200,000 to open an ice cream store,” Laguana said, evoking the image Scott James painted in a 2012 New York Times article about the planning code perils of opening the Ice Cream Bar in San Francisco’s Cole Valley neighborhood.
Prop. H requires businesses’ permits to be reviewed within 30 days, allows different city departments to review a business’s application simultaneously, and expedites inspections for businesses whose permits require them.
Another important component of Prop. H is filling vacant storefronts. Many businesses which could not weather the pandemic have closed, and Jay Cheng, Public Policy Director at the San Francisco Chamber of Commerce, expects that we will see more empty storefronts once the pandemic ends. Laguana agrees.
“There is no shortage of vacancies, boarded-up businesses, and vacant storefronts right now. This will take years to recover from,” Laguana said.
Prop. H would permit more pop-ups in vacant retail spaces, allow restaurants to rent spaces to co-working firms, and authorize nonprofits to open offices on the ground floor of buildings — spaces generally held for retail.
Prop H. would also scrap mandatory neighborhood notifications for new businesses if the proposed business is already allowed under zoning laws.
Laguana sees Prop. H as “a golden opportunity to transform the city and make it magical — better than it was before.”
While Prop. H has broad support, not everyone is as enthusiastic about the measure as Laguana is.
Some criticize Prop. H for doing little to help existing small businesses. However, short of making money appear out of thin air, the path to helping these businesses is unclear.
“What small businesses need is financial relief, but the city isn’t flush with wealth right now,” said Kristy Wang, Community Planning Policy Director at SPUR.
More contentious is Prop. H’s method of reform.
David Pilpel — a San Franciscan referred to as either a “watchdog” or a “gadfly” depending on whom you’re talking to — opposes Proposition H. Pilpel objects to the fact that Mayor Breed put Prop. H on the ballot. Pilpel writes in his opposition argument that changing the Planning Code should be done with public and stakeholder input from the Planning Commission and the Board of Supervisors.
Laguana’s verdict: Never mind the politics. The result is more important than the process.
“I support the mayor now because Proposition H supports small businesses. We should build bridges to make the city better instead of concentrating on who introduced the proposition,” he said.