Proposal Would Allow San Francisco Small Business Owners to Unionize
As small businesses in San Francisco face skyrocketing rents and ongoing economic troubles stemming from the pandemic, the city is looking to make it easier for owners and workers alike to keep doors open.
San Francisco Supervisor Connie Chan on Friday unveiled a package aimed at supporting small business owners and their workers through two pieces of legislation. The first would enable small businesses to unionize in order to collectively negotiate rent with commercial landlords.
For many small businesses, San Francisco’s astronomically high rent is one of the largest operating expenses. But the city’s rent control policies do not cover commercial properties, making it difficult to stay in business amid the current ballooning real estate market, largely driven by the artificial intelligence boom.
“Small businesses often face the risk of displacement, especially when their commercial rent goes up,” Chan said during a press conference on Friday in Japantown, which is home to a number of mom-and-pop shops. “We want our small businesses to stay in our corridors, because that really is the backbone of our local economy.”
The proposal would enable small business owners to collectively negotiate rents with their landlords and direct public resources like legal aid to commercial tenants’ unions.
In some commercial corridors, small businesses already work together to negotiate rents, but Chan’s proposal would codify that process by requiring property owners to recognize commercial tenants unions where members share the same landlords during lease negotiations.
Jon Osaki said that the model has shown success in Japantown, where several small businesses collectively bargained rent prices down with property owners during the pandemic when business was extremely slow.
“It was so disheartening in the pandemic that many of our small businesses were threatened with forced evictions, even though they were in a situation where they could not operate,” Osaki said. “Small businesses have been the lifeblood of our community.”
Christin Evans, who owns a bookstore and cocktail bar in the Haight-Ashbury neighborhood, said many small businesses she hears from have had their leases shift to month-to-month as landlords see opportunities to raise the rent during the current economic boom.
“The majority of small businesses are essentially subject to the whims of building ownership,” said Evans, who co-founded the progressive advocacy group Small Business Forward. “It used to be that most small businesses were negotiating with mom-and-pop landlords. That’s no longer the case.”
The second proposal, called the Workers’ Opportunity to Purchase Act, would codify processes for employees to purchase the business they work at if an owner decides to sell.
The idea is meant to incentivize business owners to prepare a succession plan and sell to workers who already know the business inside and out. That would include a right of first offer to workers, giving them time to explore forming a cooperative or a purchase offer, as well as a right of first refusal, requiring owners to notify workers before a sale or third-party bid so workers have an opportunity to counter.
Benjy Caplan, who works at Green Apple Books, said that would help employees like him who want to take over the business one day.
“Our hope is that when it comes time for them to have a succession plan, it includes us,” said Caplan, who is a union member with UFCW Local 5. “It’s hard and scary these days, and these two pieces of legislation I think are really going to make it feel a lot more hopeful for workers and small business owners.”
Both pieces of legislation will be introduced to the Board of Supervisors in September.