San Francisco’s neighborhood stores and restaurants are the backbone of our economy. They shape our communities, enhance our neighborhoods and are part of the character that forms our city. In fact, small businesses employ approximately half of all San Francisco workers and comprise nearly 90 percent of all our businesses.
As our city has become more expensive over the last few years, it has become even more difficult for small business owners to make the rent and keep their businesses growing.
Unfortunately, a measure on November’s ballot would take revenue away from many of these businesses and make it even harder to stay open. Proposition F seeks to restrict short-term rentals in San Francisco and in the process harms neighborhood shops and cafes that benefit from visitors augmenting their local customer base.
These short-term rental guests spent more than $230 million last year in stores and restaurants throughout San Francisco, and 37 percent of their spending occurred in the same neighborhood in which they stayed. For example, last year, Mission and Castro merchants enjoyed $12 million in revenue from short-term rental guests while businesses in the Richmond and Sunset earned an additional $4.5 million. That spending supports the bottom line of these neighborhood shops and helps keep some of our favorite local spots, especially those that may not benefit from tourism, in business.
By imposing new regulations on short-term rentals, Prop F will make it harder for visitors to stay in neighborhoods and patronize small businesses outside the downtown core. The measure allows neighbors to sue each other over modest disagreements, bans short-term rental of all in-law units and requires people to report to the government which nights they sleep at home for the entire year. Even more troubling, Prop F will lock these regulations in place with no ability to legislatively amend them over time. The net result will be fewer out-of-town visitors exploring — and supporting — our neighborhoods.
Like any business, short-term rentals are regulated in San Francisco. Hosts need to register rentals and pay hotel taxes on every stay. In July, the Office of Short-term Rental Administration and Enforcement opened to make sure everyone is following the rules. According to the City Controller, short-term rentals pay more than $1 million in taxes each month.
San Francisco draws people from across the globe to live, work and visit here. Our city is known worldwide for welcoming everyone. We San Franciscans have reaped the benefits of this reputation. Tourism remains San Francisco’s biggest industry. Short-term rentals have bolstered this significantly by allowing neighborhoods across the city to benefit from the economic activity that has passed them by for so long.
We’ve all had a favorite neighborhood shop or coffee house close down due to slow business. The question is, why would we support a measure that we know will have this effect? We shouldn’t. Let’s help small shops across the city stay open by saying No to Prop F.
Bob Linscheid is president and CEO of the San Francisco Chamber of Commerce.
This column originally appeared in the Examiner on 10/1/15.