San Francisco proposal would let small businesses unionize to negotiate rents with landlords

By CBS Bay Area

San Francisco Supervisor Connie Chan recently introduced two proposals aiming to protect small business owners against skyrocketing costs. 

One of the proposals, Small Business Tenant Unions, would allow businesses to unionize and negotiate leases and other costs with landlords. 

“Rent has always been the biggest cost, the most burdensome cost to doing business for them,” Supervisor Chan said on Friday. 

The second part of the proposal, the Workers’ Opportunity to Purchase Act, is to streamline a process where owners could sell their business to their staff if they are ready to move on. 

“Really giving the workers to empower them to really be able to, when the opportunity comes, they have the opportunity to become entrepreneurs,” the District 1 supervisor said in a press conference in Japantown.

Linda Mihara is the co-owner of Paper Tree in Japantown. It’s a legacy small business founded by her parents in 1968. They have been selling origamis and paper materials for nearly 60 years as the second-oldest business in Japantown. 

“For the first time in a long time, I’m seeing a lot of the European visitors, tourists, and I haven’t seen that since the pandemic,” Mihara said. “Everybody was struggling to get people to come to San Francisco.”

“The Japanese culture itself is really popular, the Japanese food is really popular. It’s a huge draw for everybody,” she added. 

Mihara is always fighting for small businesses to excel in San Francisco and is looking forward to seeing how the supervisor’s new proposals will pan out. 

“I’m all for anything that supports small business. And so, if there is language in that unionization that would support that, I’d be into it,” she said. “Unionizing does support huge groups of people.”

Christin Evans is the co-founder of Small Business Forward. 

“We want to have a sustainable ecosystem that small businesses can thrive in,” Evans told CBS News Bay Area. “Our organization is thrilled to support Supervisor Chan’s proposals, where we’re extremely excited she is tackling an issue that is really central to many small businesses at this moment, which is the challenge of increasing rents.”

She adds that if passed, the legislation can empower small business owners who battle skyrocketing costs against corporate landlords. 

“We’re seeing landlords demand double-digit, even triple-digit increases. And what that means is businesses are often not able to absorb those additional costs. And so as a result, they will close,” Evans said. “What used to be like a simple lease agreement between a mom-and-pop landlord and mom-and-pop small business owner that was maybe 4 or 5 pages has now become 45+ pages for legal fees. A lot of risk is being placed on the small business tenant. It’s really not sustainable.”

And Mihara understands firsthand the challenges of rising costs, and is worried about a city project in the near future. 

“This whole street is going to be under construction for 18 months. That’s going to put a big hit,” she said. “If we can get grants to the businesses that are going to be affected when this happens. Everyone is going to be affected on the streets. My foot traffic is going to be hugely compromised.”

Meanwhile, Mihara and small business owners will continue to fight for small businesses to thrive and stay in San Francisco. 

“Our city and our communities thrive when our small businesses and workers thrive,” Supervisor Chan said. “The Workers Opportunity to Purchase Act and the creation of Small Business Tenant Unions will empower our workers, stabilize our commercial corridors, and protect our small businesses, helping to create more vibrant and successful neighborhoods and a more stable workforce.”

Supervisor Chan is expected to introduce the proposals before the legislative recess, which would then be assigned to a committee for discussion.