San Francisco, CA – Mayor London N. Breed today joined Supervisors Joel Engardio, Matt Dorsey, and Myrna Melgar to introduce legislation to facilitate easier permitting for small businesses, encourage economic recovery and growth, and fill commercial vacancies in San Francisco. This new legislation builds on the work that Mayor Breed has led over the last three years to change how San Francisco supports the ability of small businesses to open and operate, including passing ballot measures and opening a new one-stop shop Permit Center.
Under the legislation, over 100 changes to the Planning Code will serve to ease restrictions across six main categories:
- Allow more business uses on the ground floor
- Lift restrictions on bars and restaurants
- Incorporate new liquor license for music venues
- Ease legalization process for existing outdoor patios
- Remove certain public notice requirements
- Enable priority processing for nighttime entertainment, bars, and restaurants
“The success of our recovery requires us to keep making changes to how we support small business in this City,” said Mayor Breed. “Small business owners are some of our most creative people and we want our City to work in concert to get them to ‘yes’ when it comes to bringing their ideas to life. We must change our system of burdensome regulation, taxes, and fees. This legislation is a major milestone towards this effort.”
In addition to this legislative proposal, Mayor Breed’s proposed budget extends First Year Free, which waives the cost of initial registration fees, initial license fees, first-year permit, and other applicable fees for qualifying businesses. Since the First Year Free program started in 2021, approximately 3,910 businesses have enrolled in the program, with 2,494 of these completely new, and the remainder are existing businesses adding a new location. The City has waived more than $1.37 million in fees since the program started.
This legislation and extension of the First Year Free program are integral to Mayor Breed’s Roadmap to Downtown San Francisco's Future. One of the nine strategies is to make it easier to start and grow a business. Simplifying City processes while reducing cost will encourage more businesses to start and remain in San Francisco.
“We aim for San Francisco to be an attractive City for small businesses to begin, evolve, and thrive,” said Small Business Commission President Cynthia Huie. “The Commission is very enthusiastic about the proposed extension of First Year Free and greater flexibility and ease in the Planning Code and what it will mean for our city’s entrepreneurs.”
Legislative Details
Allow more business uses on the ground floor and as principally permitted
Under the legislation “Flexible Retail” would be principally permitted and expanded to all neighborhoods on the ground floor across the City’s commercial corridors. An example of Flexible Retail includes a business that sells both plants and coffee, and then later shifts to selling plants and making small production bags on site. The proposed ordinance will also clarify that multiple uses are allowed in the same business space. Additionally, the legislation will allow “Professional Services” such as accounting, consulting or co-working spaces on the ground floor as principally permitted, opening up ground floor spaces to more opportunities to fill commercial vacancies.
Lift restrictions on restaurants and bars
Currently, several commercial corridors have restrictions in place for restaurants and bars, such as not permitting them, imposing a cap on the number of restaurants that can be established, or requiring a Conditional Use Authorization (CUA). Conditional Use Authorization is a lengthy process for businesses to be granted approval for their plans, including providing public notice and attending hearings – CUA can add months to the process of opening a business.
Under the legislation, those restrictions will be lifted in Chinatown, along Haight Street, Jackson Square, and Taraval Street. Likewise, restrictions on new bars will be lifted along Haight Street, Jackson Square, Pacific Ave, Sacramento Street, and Union Street.
Incorporate new liquor license for music venues
The ordinance will incorporate into local Planning Code a new liquor license, Type 90, which was adopted by the State in 2022. This new liquor license type gives venues more options as it allows a music venue to serve beer, wine, and liquor without excluding minors from the business.
Ease legalization process for existing outdoor patios
Some of the City’s businesses have long-standing patios that were never permitted. Under the legislation, businesses with unpermitted patios that are at least 10 years old can legalize them without undergoing a Conditional Use Authorization process.
Remove the public notice requirement in Eastern Neighborhoods Mixed Use Districts for business changes
In November 2020, voters adopted the “Save our Small Business Initiative” (Proposition H), which reduced the steps a business owner needed to take when they change their business use. Before this, if a clothing store, for example, were to become a café, the change would require that the general public be provided notice about the change for at least 30 days and the business could not receive their Planning Department approvals over-the-counter, even though both types of businesses are permitted in the neighborhood. Under the legislation, these benefits will be expanded to the commercial corridors in the eastern portion of the City.
Enable nighttime entertainment, bars, and restaurants to benefit from priority processing at Planning Department/Commission
Currently, nighttime entertainment venues, bars, and restaurants with full liquor licenses are excluded from participation in the Planning Department’s Community Benefit Priority Processing Program (CB3P). Under the legislation, nighttime entertainment venues, bars, and restaurants with full liquor licenses will benefit from expedited Conditional Use Authorization review, which can save a new business from months of waiting for a hearing at the Planning Commission.
“Small businesses are the lifeblood of the city,” said Mike Zwiefelhofer, owner of the Z. Cioccolato fudge shop and Legacy Business in North Beach. “Thriving commercial districts improve our quality of life. Changing the system of burdensome regulation and removing barriers helps creative entrepreneurs bring their ideas to life.”
Previous Efforts to Support Small Business
This legislation builds on the significant small business reforms Mayor Breed has advanced over the last three years including the passage of Prop H in 2020 and the passage of the Small Business Recovery Act. Since the City began implementing Proposition H in January 2021, over 3,500 businesses have benefited from the program, which allows more commercial projects to be processed within a shorter timeframe, in what’s known as “over-the-counter," when permits applications are processed immediately upon submission.
The City also opened the Permit Center in 2021, which offers 23 distinct service areas through the Planning Department, Department of Building Inspection, Department of Public Health, Department of Public Works, among others. By centralizing services in one place, customers can move between permitting departments efficiently, resulting in a better experience and improved government function. Since the start of this year, the Permit Center has served an average of 191 customers per day and provides on average 531 services daily.
More information about San Francisco’s First Year Free program may be found on this page.
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