Shaking Up Small Business: The Impact of Seismic Retrofitting on Small Businesses in San Francisco

Abstract

In 2013, the San Francisco Board of Supervisors passed legislation establishing the Mandatory Seismic Retrofit Program. Requiring all ‘soft-story’ buildings – defined as structures with ‘soft’ wall lines – to seismically reinforce their ground floors, the law is an example of proactive environmental resiliency planning. However, the legally sanctioned passthrough of capital improvement costs onto tenants has resulted in an unintended consequence: extreme rent burden. While residential occupants with a financial hardship have been provided an appeals process by the City of San Francisco, no equivalent exists for commercial tenants. This piece analyzes the impact of mandatory seismic retrofitting on small businesses across three San Francisco Supervisor Districts: 1, 2, and 5. The correlation between retrofit construction and high rates of business turnover, ownership change, and vacancy illuminates the tension between planning for environmental resiliency and ensuring small businesses are economically resilient. Moreover, it illustrates the need for a financial hardship appeals process for commercial tenants.