By Shwanika Narayan San Francisco Chronicle
WWR Article Summary (tl;dr) "Proposition H" is also known as the "Save Our Small Businesses initiative" in San Francisco. "Prop H" which is on the November ballot, seeks to streamline the city's tedious, months-long process for new retail or restaurant permits.
Making it easier for San Francisco small businesses to open, or for existing storefronts to change uses, has long been a contentious issue in City Hall. But with the pandemic hurting and even closing the city's small businesses, very little opposition has lined up against a ballot measure that seeks to do just that.
Mayor London Breed placed the Save Our Small Businesses initiative, or Proposition H, on the November ballot. It seeks to streamline the city's tedious, months-long process for new retail or restaurant permits by requiring reviews within 30 days. It also allows city departments to work on applications in tandem, speeding up the process that often keeps retailers from opening even as they're on the hook for paying rent or mortgages.
"Prop. H is a long overdue measure to cut the red tape and bureaucracy that are strangling our small businesses," Mayor Breed said in a statement. "Reducing permitting times from a year to a month and allowing flexibility for existing businesses to adapt their use is a lifeline for our small businesses and nonprofits as they strive to stay open during this trying time."
The city's streets were littered with empty storefronts long before the pandemic worsened the sector's woes. A Chronicle investigation last year found that -- beyond competition from e-commerce businesses -- high rents, long waits for permits, expensive construction costs and mandatory seismic retrofits contributed to the blight. It takes an average of six to nine months for permits to be approved in San Francisco, according to a city report.
The pandemic has exacerbated the problems, with about 2,000 businesses closing permanently across the Bay Area since shelter-in-place health orders -- crucial in curbing the spread of the coronavirus -- took effect in March, according to Yelp.
The San Francisco Chamber of Commerce, Golden Gate Restaurant Association and neighborhood merchant groups said they support the measure. So far, supporters of Prop. H have raised $150,000. Some neighborhood groups, such as the Haight Ashbury Neighborhood Council, and private citizens oppose the initiative, though no funds have been raised against it as of early October.
Restaurateur Mattia Cosmi of Italian Homemade knows the pitfalls of the city's permit bureaucracy all too well. He has four locations in the Bay Area, three in San Francisco and one in Berkeley. He bought the former Caffe Roma spot on 526 Columbus Ave. in October 2018, intending to open a full-service restaurant, his second location in North Beach.
The space was permitted for a "limited restaurant," meaning it could heat and serve food but not operate a full kitchen. After thousands of dollars and a year and half, he finally received approval for a change of use for the space in March, he said, just in time for the shelter-in-place orders, which allowed restaurants to operate takeout and delivery services only.
"It was too much. I decided to run my delivery operations in a DoorDash kitchen in Redwood City. We're still building out our second North Beach location, which has yet to open. To stay afloat during the pandemic, we needed to restrain payroll," Cosmi said.
Cosmi supports Prop H. "This should have been done a long time ago," he said. "It would have been amazing if I could have switched from cafe to restaurant in a month instead of a year and a half," he said. "If it passes, it's going to be great for pretty much everything."
There have been recent efforts to help small businesses: A moratorium on commercial evictions is in place, and the city waived fees for some businesses as well.
Prop H would also allow more pop-ups in vacant retail shops and let restaurants rent space to co-working firms. In addition, nonprofits would be allowed to open offices in ground-floor levels, which Breed said would help fill vacant storefronts. In neighborhood retail districts, it would do away with mandatory neighborhood notifications if a proposed business is already allowed under zoning laws.
Prop. H does not change any laws around formula retail. All chain stores are required to go through a process that includes neighborhood notifications.
District Eight Supervisor Rafael Mandelman is one of the six supervisors who support Prop. H, though he has reservations.
"The city's planning code is too hard to parse sometimes. It's a gauntlet that we should not be asking small entrepreneurs to run through right now," he said. "While individual provisions make sense at a certain point in time, collectively, they can become burdensome for small business owners."
Mandelman said he would have preferred going through the Board of Supervisors route instead of having a ballot measure, but the last time that happened, it was like going through "death by a thousand cuts." Last fall, then-District Five Supervisor Vallie Brown and Breed passed legislation to make it easier for small businesses to open and operate in San Francisco.
But that was watered down by the Board of Supervisors.
"For me, the crisis small businesses are in right now outweighs other concerns," Mandelman said.
The Haight Ashbury Neighborhood Council recommended its members reject the measure, citing lack of community input and concerns around the changes they say benefit developers and landlords.
Prop. H needs a simple-majority vote to pass. If it passes, the measure can be amended by the Board of Supervisors after three years.
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