Strategy 

Downtown offers unparalleled benefits to a wide range of businesses. Yet the complexity, time and, effort required to launch a new venture or move into a new space can be a significant barrier to small and large businesses – particularly those that may lack extensive resources to help them navigate the permit process. By creating transparency, streamlining processes, and proactively building out systems to support new enterprises, we can fill vacancies more quickly while removing barriers for small, independent, and local businesses. Simplified permitting also helps to attract a more diverse mix of uses – from a wider range of office tenants as well as arts, entertainment, and other commercial users – that collectively enhance San Francisco’s identity and cultural draw.

 

The City has begun to advance a series of initiatives and will launch additional programs that support this strategy: 

• Build on pandemic emergency financial assistance programs to provide direct business recovery assistance including grants and loans. 

• Expanded the First Year Free program to reduce permit costs for new business ventures. 

• Right-size local employer healthcare contributions under the Health Care Security Ordinance (HCSO) to provide adequate healthcare funding while supporting San Francisco businesses. 

• Connect new businesses, ventures, and opportunities to ground floor vacancies and provide targeted support through a new Vacant to Vibrant program. 

• Build on the success of the Save Our Small Business Initiative and Small Business Recovery Act to deliver smoother business permitting.  

• Modernize processes and add resources to support businesses at the Permit Center.

• Streamline business inspections to reduce delays and unexpected costs for new and existing businesses.

 

Initiatives
 

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Direct business recovery assistance

Since the beginning of the pandemic, the Office of Economic and Workforce Development (OEWD) has led City efforts to provide immediate and ongoing support for small businesses, assisting with applications to local, state and federal relief funding and investing more than $83 million of local funds in grants and loans that are projected to support more than 4,800 small businesses. Of the awards issued so far, 60% of recipients are minority-owned businesses. Additionally, the Treasurer and Tax Collector granted tens of millions of dollars in fee and tax deferrals to businesses and sectors most impacted by the pandemic. 

• As economic needs shifted from emergency relief to post-pandemic recovery, OEWD has adjusted its grant, loan and business assistance programs accordingly with programs focused on storefront improvements and repairs, entrepreneurship training, fee waivers in targeted sectors, and low-interest loans to support investment and growth of entrepreneurs and a diversity of small businesses. Grants and loans continue to focus on those businesses and entrepreneurs least likely to receive assistance through other channels and supporting the success of low-income and underrepresented entrepreneurs and business owners, as well as businesses in San Francisco’s opportunity neighborhoods. 

• In 2023, OEWD is pursuing direct business assistance programs that support specific business types and under-represented businesses launching and expanding operations in Downtown.   

• In May 2023, Mayor Breed and Board President Peskin proposed $2 million in City funding to help fill large retail vacancies on Powell Street corridor between the Cable Car turnaround and Union Square, supporting the revitalization of a key gateway to the heart of the Union Square district. Included in the Mayor’s 2023-2024 proposed budget, the funds could be used to help offset costly tenant improvements or provide direct subsidies for other business start-up costs.

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First Year Free

Starting any business is a costly endeavor. Initial City permit and inspection fees can pose an additional barrier to new businesses, especially those with limited capital and access to resources. 

• The First Year Free program was created in 2021 to spur new ventures to open and give small businesses and entrepreneurs a greater opportunity to start or grow their business as the city began to reopen after the pandemic. The program waives first-year permit, license, and business registration fees for new and expanding businesses in order to reduce the cost of opening a new business location.

• The Office of Small Business has provided ongoing support to the Treasurer’s office to administer this program with small business permit specialists who help identify businesses that are eligible for fee waivers. To date, over 2,000 businesses have benefited from the program and the City is working on technology improvements to ensure all eligible businesses are identified and fully benefit from the program.

• In November 2022, the Board of Supervisors extended the program through June 2023 and expanded the size and types of businesses that qualify.

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Right-sized local employer healthcare contributions

The Health Care Security Ordinance (HCSO) requires businesses to pay into a fund held by the City in order to offer important health care coverage to part-time, temporary, and other employees who do not receive full benefits from their employers. However, the program adds a significant expense to the cost of doing business in San Francisco.  As the program is currently designed, employers pay more into the program than employees end up using, generating a balance.

• To right-size the program and employer contributions, Mayor Breed is exploring a one-year reduction in the rates that employers need to pay into the system. This reduction would give immediate relief to San Francisco based businesses while preserving the existing level of healthcare services for employees.

• The Mayor has further directed the Department of Public Health, in coordination with the Controller’s office, to identify additional long-term strategies to ensure the system effectively meets its original goals of providing workers with healthcare while supporting San Francisco businesses.

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Vacant to Vibrant: connecting new ventures to ground floor vacancies

Pop-ups and temporary uses in storefront spaces fill ground floor vacancies with interesting new offerings that support a successful evolution of our Downtown, while providing a low-cost way for entrepreneurs, businesses, makers, brands, and arts organizations to test new concepts and gain access to the Downtown market before investing in a permanent location. 

• In April 2023 the Office of Economic and Workforce Development, in partnership with non-profit SF New Deal, launched Vacant to Vibrant, a new program to match pop-up ventures - prioritizing small, local, and underrepresented ventures - with owners of vacant spaces in Downtown. This program will provide ground floor spaces rent-free for short term activations for three to six months with the option to extend, along with technical assistance in navigating leasing and permitting processes and micro-grants to support start-up costs. 

• In partnership with key permitting departments, the Vacant to Vibrant program will develop an efficient process for permitting temporary uses and pop-ups, building on.  a user-friendly guide for hosting pop-ups and temporary events that gives prospective entrepreneurs a sense of what to expect and how to plan. 

• The program will also partner successful pop-ups with small business permit specialists and provide assistance in pursuing permanent locations using a new commercial vacancy database in development by the Office of Small Business. 

• Interested entrepreneurs and property owners interested in donating a ground floor space can find out more and apply at vibrantsf.org.

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Smoother business permitting

Opening and operating a small business must be simplified so entrepreneurs can focus on running their business and making a living, not navigating the complexities of City Hall. We need to support local business owners as they work to re-activate empty storefronts.   

• In November 2020, San Francisco voters approved Mayor Breed’s Save Our Small Businesses initiative (Proposition H) to create a streamlined permitting process for neighborhood storefront businesses and standardize regulations for common retail uses across the city, with a guaranteed 30-day approval timeline for most business permits.  

• In August 2021, Mayor Breed signed the Small Business Recovery Act (SBRA), which expanded many of these provisions to include Downtown ground floor businesses of all sizes. Many businesses can now be instantly approved “over the counter,” and neighborhood notification requirements were lifted for most changes to storefront businesses. These changes dramatically reduced the time required to get permits, and helped businesses open and adapt more quickly.   

• The Office of Small Business is now working with permitting departments to continue to refine the process and promote the program so eligible businesses can fully realize the benefits of the program and to identify opportunities to further improve the permitting process in order to support businesses to open and operate in San Francisco.  

• In March 2023, Mayor Breed announced legislation to simplify small business permitting to encourage economic growth and address commercial vacancies. The proposal principally permits a wider variety of business types so they can open or expand into new ground floor spaces quickly. Recognizing the changing nature of retail and consumer behavior, the proposal allows entrepreneurs greater flexibility to explore a combination of business types.

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Business support at the Permit Center

The City opened a new one-stop Permit Center in 2020 that brought multiple permitting agencies under one roof for the first time. The Permit Center has already created efficiencies and significantly improved the experience of business owners in getting through the “over-the-counter” process for most common permits that don’t involve major work on the building or interior renovations. This makes opening a business faster and easier for all and more accessible to smaller and less resourced business owners and entrepreneurs.   

• City departments are working together to leverage the Permit Center to further improve the customer service experience for business owners by simplifying and modernizing the application process, such as the recent change to remove a requirement for costly architectural drawings for certain minor permits for small businesses.  

• In March 2023, the Permit Center launched a pilot program to digitize the permit application and review process for some of the most common permits required by new businesses, reducing the need for business owners to submit applications and supporting materials in-person. Based on feedback from the pilot program, the Permit Center will continue exploring options to expand digital permit options in coming months. 

• To ensure ongoing support and improved customer service for businesses, the Office of Economic and Workforce Development will build off of the success of small business permit specialists that the Office of Small Business created in 2022 by adding additional business specialists to expand the number and size of businesses that can get individualized assistance.

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Streamlined business inspections

Starting and operating a business requires compliance with a variety of City requirements and standards and a series of inspections by City agencies. By providing clear and understandable information to business owners prior to inspection, the City can help businesses be prepared, ensuring they have all required documentation, that inspectors have easy access to areas and equipment that they need to inspect, and that key requirements are addressed prior to inspection so that they can successfully pass inspections.

• In coordination with the Office of Small Business, permitting agencies that require inspections prior to permit issuance are developing a simplified checklist that their staff will use during inspections. By identifying clear expectations that allow business owners to prepare their businesses for an inspection, the City aims to reduce the need for repeat inspections and increase the speed of opening a business.

• The Office of Small Business and Permit Center are exploring further improvements to better coordinate inspections across multiple departments to reduce wait times and increase the efficiency of inspections for brick-and-mortar and mobile businesses.

 

See other economic recovery strategies

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