Facing pressure from immigrant rights groups and advocates for racial equity, San Diego slashed from $230 to $38 the annual permit fee street vendors must pay under a new city law that takes effect in mid-June.
The decision to shrink the proposed fee more than 83 percent comes in the wake of criticism that Mayor Todd Gloria plans to add 44 employees to the city workforce to enforce the law, which some community leaders call too aggressive.
The City Council, which approved the fee reduction Tuesday, has always characterized the new law as a delicate balance between supporting vendors and preventing them from changing the look and feel of many popular city locations.
The law, which the council first approved in March, partially bans street vendors in parks and such pedestrian-heavy areas as Little Italy and the Gaslamp Quarter. It also institutes fines and possible impoundment for rules violations.
The council gave the new law a required second approval Tuesday morning, so it will take effect in 30 days. The council then approved the fee reduction Tuesday afternoon. Both votes were 8-1, with Councilmember Vivian Moreno voting no.
“I continue to be concerned about the level of resources the city is allocating toward enforcement of the street vendor ordinance,” Moreno said. “You would think this is the main priority of the city — if you were looking at our budget.”
Annual costs for enforcement are estimated at about $5 million, which covers new code enforcement officers, new park rangers and new trash collection workers who may have to confiscate the pushcarts of scofflaw vendors.
The San Diego Immigrant Rights Consortium says San Diego’s handling of street vendors violates the spirit of a 2018 state law that aims to encourage vending as a new form of being an entrepreneur.
“The enforcement-heavy budget does little to support sidewalk vendors and is the antithesis of state law,” the group said in a letter to the city.
While Moreno focused on enforcement, the rest of the council focused on how much vendors must pay for annual permits.
Gloria’s staff proposed $230, Councilmember Dr. Jennifer Campbell proposed lowering that to $100, and Councilmember Monica Montgomery Steppe then proposed $38 — an amount equal to the annual cost of a city business license.
“I firmly believe that setting the fee that high ($100) will exclude existing and emerging entrepreneurs,” Montgomery Steppe said.
Council President Sean Elo-Rivera stressed that no one is getting rich as a street vendor.
“It’s back-breaking, they work hard and they do this without a ton of other options,” he said. “In the spirit of trying to make sure we expand economic opportunity to those who most need it and most value it, I think this change is a valuable one.”
Councilmember Joe LaCava supported the change, but he expressed concern that the smaller fee would benefit more than just the low-income immigrants the council has in mind.
“I fear that the fact is many other players will take advantage of the free rent on public land,” LaCava said. “I’ve heard of brick-and-mortar retailers that actually say, ‘I’m going to get out of my rent and set up a canopy.’”
LaCava said the city should consider varying permit fees for street vendors based on factors such as income and whether they are just starting out.
Many brick-and-mortar businesses complain that the majority of vendors are not struggling immigrants, but employees working for large vendor organizations that deploy carts in high-traffic areas across the city at strategic times.
Councilmember Marni von Wilpert suggested San Diego could vary the fees based on location, with high-traffic spots like Balboa Park and beach areas costing more.
Because San Diego is unsure how things will go with the roughly 1,000 vendors expected to get permits, Campbell successfully persuaded her colleagues to attach a one-year “sunset” clause to the new fee.
In spring 2023, city officials will analyze how the new law is working, whether the fee is too high or too low, and other consequences and factors.
City officials said they based the $230 proposal for the vendor permit fee on a survey of other cities with vendor fees, including cities with beach areas.
The proposal to shrink the fee to $38 started with Erin Grassi, policy director of Alliance San Diego, a group focused on racial equity and related issues.
“The proposed $230 is extremely high and would cause unnecessary economic hardship for sidewalk vendors,” she told the council. “Without a comprehensive study, it’s really impossible to know how many vendors exist, what fee would be economically feasible for them and what cost the city actually needs to implement the program.”
For details on the new law, go to sandiego.gov/sidewalkvending.