San Francisco Supervisor Proposes Easing Zoning Laws to Combat Storefront Vacancies in District 3

San Francisco District 3 Supervisor Danny Sauter is spearheading an initiative to amend the city's planning code, specifically targeting restrictions on "Flexible Retail" in neighborhoods like Russian Hill, North Beach, and Nob Hill. The proposed changes aim to revitalize commercial corridors by allowing businesses to operate multiple services under a single roof, a practice currently prohibited in significant portions of the district. This move comes as San Francisco grapples with persistent commercial vacancy rates.

Supervisor Sauter highlighted the current limitations in a recent social media post, stating, "> ..it's not allowed on much of Russian Hill, North Beach, and Nob Hill in District 3. Two small businesses operating under one roof are categorized as 'Flexible Retail' in the planning code. This category is banned in much of D3. It makes no sense, and we need to change this." His statement underscores a perceived disconnect between existing regulations and the needs of modern small businesses.

"Flexible Retail" is defined in the San Francisco Planning Code as a land use category permitting a single location to host two or more distinct business types, such as a coffee shop and a bookstore. While this model is allowed in many other San Francisco districts, it is not "principally permitted" in key commercial areas within District 3, including the North Beach and Pacific Neighborhood Commercial Districts. This restriction stems from historical zoning efforts designed to preserve the unique character of these neighborhoods and prevent an over-concentration of certain business types.

Critics of the current regulations, including Supervisor Sauter, argue that these stringent zoning laws contribute to the high number of vacant storefronts across the city. Reports indicate that San Francisco faces some of the highest commercial vacancy rates in the nation, with complex permitting processes and restrictive zoning frequently cited by landlords and business owners as major impediments to new establishments. North Beach, a prominent part of District 3, has notably experienced a significant increase in commercial vacancies.

Supervisor Sauter, who assumed office in January 2025 with a pro-business and pro-development platform, is actively pushing for legislative reform. His proposed ordinance, which is expected to be considered by the Board of Supervisors this September, seeks to expand allowable commercial uses and reduce limitations on various business operations in areas like North Beach and Nob Hill, directly addressing the "Flexible Retail" ban. The outcome of this legislative effort could significantly impact the landscape of small businesses in District 3.