There’s a myth going around San Francisco politics that small businesses are largely opposed to Mayor Daniel Lurie’s Family Zoning Plan. Last week, the Chronicle reported that “small business leaders” have signed a letter to Lurie “warning that the plan could ‘force closures of businesses that have served San Francisco for generations.’” But the paper omitted the fact that the letter was organized by The Alliance for Affordable Neighborhoods, an association representing only 52 small businesses out of an estimated 90,000 in San Francisco.
We know many of the small business owners who signed this letter; some of them are dear friends. But as two people who have spent nearly two decades running small businesses in this city, we can tell you flat out: The suggestion that there’s a broad coalition of small business owners opposed to the Family Zoning Plan is simply not true.
The truth is, the mayor’s plan is supported by the city’s largest and most representative small business organizations, collectively representing thousands of businesses. The reason for this support is quite simple: By increasing density and height limits along transportation and commercial corridors, the mayor’s plan will deliver more housing. And more housing means more customers and more places for our employees to live.
Most small businesses don’t suffer from an irrational fear of housing; we suffer from not having enough customers to keep our businesses alive. When office workers stopped going downtown after the pandemic, the small business sector in the Financial District collapsed. Though less dramatic, residential neighborhoods also saw a devastating wave of closures as the city lost tens of thousands of residents during Covid.
The logic behind upzoning isn’t rocket science: The more families and workers who live near a neighborhood business, the more cocktails, bagels, haircuts, or novels get sold. One major study showed that population density itself attracts businesses, creating a virtuous cycle of success. The numbers don’t lie: Adding enough housing to meet San Francisco’s needs is projected to generate nearly $5.6 billion in new spending at local businesses. That’s not a rounding error. That’s a lifeline.
Number two on small businesses’ “most-feared list” isn’t building more housing. It’s the unaffordability of housing. We have watched over the last decade as our workers, especially those with the toughest jobs, have been forced to move farther away from San Francisco to Antioch, Fremont, and even Sacramento. Attracting good employees keeps us up at night, as many workers simply cannot afford to live in the city.
To make things worse, bars and restaurants used to have a constant stream of customers who worked in SF hospitality, got off their shifts, then visited neighboring businesses to grab a drink or a late dinner. They were the gold standard of customers — big tippers who treated bartenders and servers with a respect that only someone inside the industry can understand. They were a veritable fire hydrant of revenue, often on slow weekday nights. That fire hydrant has become a trickle as these very same hospitality workers sprint post-work to catch the last BART or hop in their cars to drive home across the bridge (sometimes two bridges). Small business owners know that with more housing, there will be more options for our workers to live in the city.
Are there business owners who oppose the mayor’s plan? Yes, of course. Death, taxes, and strident political opposition are the only guarantees in San Francisco life. But we need to put their concerns into proper context. For example, the argument that “new housing might displace small businesses.” Yes, it’s possible that some businesses might be displaced. But the sites most likely to be replaced with new housing under the mayor’s plan — including defunct gas stations, condemned buildings damaged by fire, and empty parking lots — haven’t historically been inhabited by mom-and-pops.
The Planning Department estimates that just 10 businesses a year will be displaced. That’s 0.01% of businesses citywide. And in the rare instances when newly erected housing does displace a business, the mayor’s plan includes relocation assistance, permit fee waivers, and incentives for developers to bring legacy and community-serving businesses back into the new buildings.
Let’s also be real about what happens if we don’t pass the Family Zoning Plan: The state will step in and strip away San Francisco’s local control. This means that instead of thoughtful, balanced planning, we’d get a free-for-all “build anything, anywhere, willy-nilly” result. The Family Zoning Plan, on the other hand, is carefully designed to modernize outdated rules, spread new housing fairly across all neighborhoods, and balance growth with protections and support for small businesses.
In fact, it is so carefully designed that the state has warned San Francisco to not add new rules or standards that reduce financial feasibility or delay approvals. We’ve pushed this plan right up to the edge of what the state will allow. If we try to go further, we risk losing all control and having Sacramento dictate terms.
Between the two of us, we’ve run bars, cannabis dispensaries, van rental companies, community benefit districts, trade associations, and guided tour companies, and we have both served on city commissions. We’ve spent countless hours fighting for struggling merchants, artists, and service providers.
So we say this with confidence: What small businesses need most isn’t more empty lots or exclusionary zoning, and we certainly don’t need a zoning free-for-all. What we do need is more customers, more workers who can afford to live here, and more families putting down roots. That’s what the Family Zoning Plan delivers. And that’s why so many of us in the small business community strongly support it.