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Proposition H, which was sponsored by Mayor Breed and approved by voters in the November 2020 election, streamlines the permitting process for businesses, creates more flexibility in zoning and how businesses can operate, supports arts nonprofits, and encourages more vibrant commercial corridors throughout the City. It requires the City to shorten the permitting process for permitted uses to 30 days, which will save many small businesses months in process and often tens of thousands of dollars in associated costs. Proposition H additionally relaxes some zoning restrictions and allows more businesses to provide a mix of products and services, as well as allowing art-nonprofits to use some commercial corridors where they were previously unable to do so.
"Our system for permitting small businesses to open and operate was broken before the pandemic, but now it's a matter of life and death for countless restaurants, retail establishments, and other businesses that we know and love in our community," said Mayor Breed. "That's why I introduced Prop H, and why an overwhelming majority of voters supported it, because we don't have time to waste. With this Executive Order, we're moving quickly to implement these changes now and help our small business community not only survive, but also recover and help get our economy back on track."
San Francisco is home to approximately 94,000 small businesses, which make up 94 percent of all businesses in the City. This vital sector of our economy generates almost 360,000 jobs, employing about half of San Francisco's workforce and contributing to the vibrancy of the City's diverse neighborhoods.
Under the current system, small businesses must receive numerous permits from multiple City departments before they can operate. This process can regularly take between 6 months and a year and half, during which businesses are paying rent, taxes, and other operating expenses without being able to serve a single customer. These exorbitant upfront costs and unreasonable time delays deter people from starting business, leading to more vacant store fronts, less vibrant merchant corridors, fewer employment opportunities, and a smaller tax base. Small businesses that are already operating experience these permitting challenges as well. When attempting to acquire a new permit or change the way in which they operate, existing businesses must also go through an arcane permitting process that can take months.
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"Proposition H is the most meaningful legislation to impact San Francisco small businesses in many years. Business permits can take over a year to obtain. Prop H reduces this to 30 days or less. Prop H gives existing businesses new tools to survive, and dramatically reduces the hassles new businesses face when trying to get started," said Sharky Laguana, President of the San Francisco Small Business Commission. "San Francisco voted strongly in favor of Prop H, and we are very excited to see it implemented in the small business community."
"Our small business community was suffering before the complete devastation of the COVID-19 crisis, so the implementation of Prop H could not come at a better time to help us rebuild our beloved neighborhood corridors," said Ben Bleiman, President of the San Francisco Entertainment Commission. "It is hard to overstate the positive effects that Prop H will have on both existing and new small businesses. Rather than take years to open - while paying rent the entire time - new mom and pop stores will be able to open their doors in only 30 days. For businesses trying to adapt their models to the changing economy, what used to take hundreds of days and mountains of red tape now can be done with a simple authorization. The road ahead is going to still be incredibly difficult for the small business community, but Prop H gives us a fighting chance. We thank Mayor Breed on her bold, visionary leadership to help Prop H become a reality!"
"Prop H is critical to the success of our small businesses, and I'm glad Mayor Breed is moving so quickly to get it implemented," said Cyn Wang, Wang Insurance Agency. "We don't have time to waste because countless small businesses in San Francisco are struggling every day to get by, and I'm optimistic that this will make a difference for our city's economic recovery."
"After taking 3+ years to open Che Fico on the second floor of an old auto body garage we were struck by the complete inadequacy of the process," said David Nayfeld, Chef and Partner, Che Fico and Che Fico Alimentari. "We were in a position to improve the building, the community, and add to the city's tax base, yet we slowed at every turn of the process. There was never any guidance or visibility on how long it would take. There were so many times people told us to give up and walk away. We are very fortunate that we stayed the course. Because we could. So many would-be small business owners don't have the resources to fight against a machine like that. Prop H will finally create accountability and more importantly, visibility around this already daunting task of opening a business in San Francisco."
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Mayor Breed's other recently announced efforts to support small business and arts and cultural organizations include:
- Expanding the San Francisco Hardship and Emergency Loan Program (SF HELP) by $3.5 million. The program will provide zero interest loans of up to $50,000 to approximately 80 small businesses as San Francisco continues on the road to economic recovery.
- Providing $2.5 million in support for entertainment and nightlife venues in the form of additional fee and tax waivers.
- Extending Shared Spaces permits through June 30, 2021 and working to make elements of the program permanent beyond that date.
- SF Shines Program, providing $1.6 million in grants and design services to support neighborhood businesses that need to purchase furniture and fixtures and reconfigure space in order to meet health requirements for operating.
- Directing nearly $6 million in funding for artists, teaching artists, arts organizations, and cultural workers, including a new universal basic income pilot program for San Francisco artists.
- The Cultural Districts Community Building and Impact program will award $265,000 to each legislatively approved Cultural District working to preserve, strengthen, and promote their cultural communities.
Since the beginning of the COVID-19 pandemic, Mayor Breed has launched several initiatives and programs to assist businesses in San Francisco:
- Business tax deferrals for small businesses with up to $10 million in gross receipts. Mayor Breed and Treasurer Cisneros notified small businesses that their first quarter businesses taxes can be deferred until February 2021. No interest payments, fees, or fines will accrue as a result of the deferral.
- $10 million Workers and Families First Paid Sick Leave Program, proving up to 40 hours of paid sick leave per employee.
- $9 million Emergency Loan Fund providing up to $50,000 in zero-interest loans for individual small businesses.
- $2.5 million Resiliency Grants providing up to $10,000 grants to over 300 small businesses.
- $3.2 million for the African American Small Business Revolving Loan Fund.
- $1 million for Neighborhood Mini-Grants to Support 300 Small Businesses in Underserved Communities.
- $2.5 million in support for working artists and arts and cultural organizations financially impacted by COVID-19.
- Supporting nonprofits funded by the City so workers do not lose their incomes.
- Issuing a Moratorium on Commercial Evictions for small and medium sized businesses that cannot afford to pay rent.
- Capping the commission at 15% on 3rd party food delivery companies.
- Advocating for additional resources for small business and workers through the federal CARES Act.
- Establishing City Philanthropic www.Give2SF.org Fund, where donations will support housing stabilization, food security, and financial security for workers and small businesses impacted by coronavirus.
- Launching a one-stop City website for businesses and workers seeking resources, contacts, and updates during the COVID-19 emergency: www.oewd.org/covid19.
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