Mayor Breed Introduces Legislation to Remove Costly Permitting Requirement for Businesses

San Francisco, CA - Mayor London N. Breed introduced legislation that simplifies the permitting process for businesses owners opening or transitioning to a new type of business in a location that will not be doing construction. These "change-of-use" projects are common, for example when a retail shop opens in a former yoga studio, or an existing restaurant adds a liquor license.

Under the current San Francisco Building Code, a business owner who wants to open or transition to a new type of business - despite needing no construction - is required to provide professionally drawn architectural plans. Removing the requirement for plans can save businesses an average of $10,000 and months of work to secure and pay for architectural drawings to submit a permit application to the City.

Starting in late 2022, the Department of Building Inspection (DBI), Planning Department, and Office of Small Business (OSB) began implementing many of the changes proposed in the Mayor's new legislation in order to better support San Francisco's business community. To date, with these changes, the City has already saved nearly 20 small businesses thousands of dollars and time.

This new ordinance will change the City's Building Code to make the improvements permanent and expand support that applies to businesses of all sizes.

"This legislation streamlines our permitting regulations to better support our business community. If a business isn't altering their building, they should be able to open their doors without costly permit application requirements," said Mayor London Breed. "For a lot of our small business community, their recovery post-pandemic is still very much underway and so must bring forward every resource that we can make available to help support them and save on costs. We have already started to implement these changes and they are working, so now we are making them permanent and expanding them. This is one of many changes we are bringing to make operating and opening businesses here easier and more cost effective."

This simplified process applies to change-of-use projects that meet all of the following conditions:

• Projects with no physical alterations or new construction
• Projects where the occupant load - the anticipated number of people in the space - will stay the same or decreases
• Projects where the occupancy classification remains the same. This classification defines the requirements for fire and life safety, such as the number of required exits

"It's just good common sense that a person shouldn't have to create construction drawings if no construction is going to occur," said Patrick O'Riordan, director of the Department of Building Inspection. "This ordinance is an extension of work the Department of Building Inspection started in 2022 to eliminate the requirement for professional drawings for projects that truly don't need them like replacing laundromat machines and legalizing unpermitted awnings."

This legislation is one component of a broader strategy championed by Mayor Breed to make it easier to start and grow a business in San Francisco. Roadmap to San Francisco's Future, which calls for creating transparency, streamlining processes, and building out systems to support new businesses opening in San Francisco.

Mayor Breed has advanced a broad range of small business reforms as part of this strategy, including the recent passage of companion legislation to waive permitting fees for the organizers of outdoor community events.

"Through our office's work helping small business owners navigate the permitting process, we understand the hardships they experience, often before they can truly begin their permitting journey," saidKaty Tang, Director of the Office of Small Business. "The legislation introduced allows entrepreneurs to open or transition their business more efficiently and represents a needed shift in the way government operates."

Examples of Success: Pasta Supply Co. And La Cocina

Clement Street's Pasta Supply Co., which wanted to offer beer and wine with their food service, offers an example of how this legislation can positively impact small businesses. This was considered a "change-of-use" from a Limited Restaurant to a Full Restaurant. Offering beer and wine did not require any new construction, but the way current building codes are officially written, the business would have needed to hire an architect and submit drawings of the new interior layout to the Department of Building Inspection. However, since 2022 when the City began offering changes to streamline the process, businesses like Clement Street's Pasta Supply Co. have avoided the added time and saved thousands of dollars.

"It's been exciting to see this work being done to streamline processes for small businesses," says Anthony Strong, owner of Pasta Supply Co. "Removing unnecessary bureaucratic hurdles in our city's departments is crucial for places like ours to flourish."

Another example comes from La Cocina, which supports businesses by providing affordable commercial kitchen space and technical assistance for food-based businesses in San Francisco. They recently transitioned a former food hall to a shared-use commercial kitchen and benefited from the piloted process, enabling them to avoid costly professional drawings.

"From operating our own shared-use commissary kitchens to supporting dozens of entrepreneurs in opening their food businesses, we understand how complex, time-consuming, and expensive permitting can be in San Francisco," said Leticia Landa, Executive Director of La Cocina. "We appreciate any and all changes the city is making to improve the process."

Since 2020, key aspects of Mayor Breed's small business strategies have included:

• Establishment of Entertainment Zones that will allow restaurants and bars to sell alcoholic beverages during outdoor events and activations.
• Extending the First Year Free Program for a fourth year, through June 30, 2025. The First-Year Free program waives first-year permit, license, and business registration fees for new and expanding small businesses. Most businesses are automatically enrolled and see relief immediately. Since Mayor Breed launched the First-Year Free program in 2021, approximately 7,761 businesses enrolled (as of July 22, 2024).
• Enacting legislation in 2023 that made over 100 changes to the Planning Code to ease business restrictions across five main categories:
  • Allow more business uses on the ground floor
  • Lift restrictions on bars and restaurants
  • Incorporate new liquor license for music venues
  • Remove certain public notice requirements
  • Enable priority processing for nighttime entertainment, bars, and restaurants
• Passage of Prop H in 2020 and the Small Business Recovery Act in 2021. Since the City began implementing Proposition H and subsequent legislative changes that eased permitting (e.g. the aforementioned Planning Code changes), over 5,300 commercial projects have benefited from over-the-counter permit processing, which usually occur immediately upon submission or within two days on average (data as of July 9, 2024).
• 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.

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