I operated a small online only car and motorcycle dealership in California in 2008.
My friend owned a 4000 sq ft warehouse that was licensed for automotive repair, but all he did was run a NASCAR team out of it, prepping the car there for races.
Being 2008, he fell on hard times and wanted me to move into his place instead of a popular strip mall location I was in (that had a 20 year old conditional use permit in place for car sales I rented under).
The city would NOT let me operate an online car dealer from his warehouse. They wouldn't sign off for it for the DMV. They said car repair was one thing, but if I wanted to sell cars from there, even online, I needed a conditional use permit process to approve it. It was several thousand dollars, and they could not provide any insight to tell us if it would be approved.
So I didn't move. My friend lost the place. And it sat empty for EIGHT YEARS. Because my local city government wasn't sure they should allow me to sell cars from a place... A place that technically was allowed to have it's entire storage yard full of broken down cars in various states of disrepair if it wanted to.
A large percentage of city sales tax income comes from car dealerships. In addition, the big dealers themselves are often extremely active politically at the local and state level. This often means that small competitors are squeezed out by city planners who are accepting huge campaign contributions from various dealers.
California has a really big corruption problem at the local level.
It's ridiculous. I'm curious what the way out of this clown show will be - governments aren't typically known for being good at cutting back bureaucracy and red tape.
Why should these sorts of licenses exist in the first place? I can understand having a separate license for storing/doing dangerous stuff - example: if a business deals with pesticides and other types of toxins, propane cans, explosives etc.. and these licenses can be issued conditional to building codes, special equipment or arrangements being made etc.
But why should a license be needed to open a repair shop, dealership, a factory, a nursery etc?
I see that. But a govt "for the people and by the people" will need to operate under the principle that citizens BY DEFAULT have the right to do what they want provided they don't break any laws other than in specific EXCEPTIONS where citizens may carry out tasks which requires greater supervision by the government because of extreme danger that activity may pose to others.
As I mentioned in another comment, make the bureaucracy a bit more prescriptive and easier to, for lack of a better word, unit test.
You don't want no-regulation in dense urban environments. But the rules are unclear, the permitting system opaque, the outcomes kind of subjective and open to too many outside interference, and the agents of the bureaucracy mostly disinterested in getting things at any sort of reasonable speed.
Like, it is probably easier for me to open a taco shop in Japan then it is in the USA, and Japan is THE land of red-tape and bureaucratic prescriptivism.
Completely off-topic, but I wonder one of the reasons why government/bureaucracy jobs in Japan tend to attract more engaged workers is the relative difficulty of bureaucracy in Japan. Imagine this: most legal documents have all the words still written in some mixture of Church Latin and French. Including giant explanatory paragraphs. Navigating this document without the aid of a trained worker (who most likely has a college degree in Church Latin and Legal French) is nigh impossible even for educated individuals and so they guide you step by step through every box and field.
A proposal: for a trial period of 2 years, allow businesses to open without any red tape.
Fire / plumbing / electrical / etc inspections are scheduled for the earliest slot, but doesn't prevent the business from opening. If the inspection fails, business and/or applicable contractor pays a gigantic fine.
If the business receives some number of complaints over a certain threshold per capita per square mile per time period, it goes to a judge that decides whether the business lives or dies.
Say a fire inspection doesn't prevent a business opening so it opens and promptly burns down the building its in, innocent people living in apartments above the business die. I'm sure they will appreciate that while their personal position isn't great their sacrifice is contributing to the regeneration of the city as a whole.
Likewise say an electrical inspection doesn't prevent the business opening, so some poor schmoe gets cooked while plugging in a vaccum cleaner or whatever.
Most of this so called "red tape" exists for a reason and people who are affected by it complain a lot but as in Bastiat's "broken window" fallacy, we never see the people who benefit from these regulations because they are protected from injury and thus the events never happen.
At the margin I'm sure regulation does put some people off running some businesses, but it's really debatable whether removing regulation would be enough to regenerate lots of businesses in cities. The headwinds they are facing seem structural - people are going into offices less are working from home more and so are using different goods and services and in different places from those they were using back pre-pandemic.
"Regulations are written in blood" is, while a valid point, also something of a brain-worm.
Plenty of countries have just as good safety track records without the difficulty many US municipalities present while you are trying to start a business.
I think the problem with US regulations is (as far as I have encountered them) that they are descriptive of intended end-results, and not prescriptive of compliant implementation. This creates a lot of bureaucratic inefficiency at the implementation/inspection side as well as lots of ambiguity on end-results. The trade here is some measure of future-proofing and greater freedom on implementation.
Unfortunately, this ironically has created the strange mess we face today. Two reasons:
1. Enforcement is retroactive. You build it, and then it's inspected to code. If you fail code, you are work-stopped, penalized, and then ordered to rebuild to code. This forces an inordinate amount of caution and makes everyone involved risk-adverse to comical degrees. And creates, again, ambiguity.
2. Enforcement can happen after business commencement. That is, you start selling doughnuts, and THEN the Department of Water's sewage inspector shows up and finds that your plumbing isn't to some inane, inconsequential section of the code. Why did they show up so late? Well, as it turns out passing this part of the regulations isn't necessary to starting operations. Why didn't anyone stop you from City Hall? Because ... honestly they might know or care.
Ambiguous implementations with punitive consequences after the fact.
There are countries who do this the other way around. Incredibly prescriptive regulations that in-turn, can be easily checked and verified. Etc. Etc.
Does this stifle some amount of innovation? Yes. Is there forms of madness for this style? Absolutely. But from my point of view, the velocity and ease of business growth seems to favor one over the other. And it is NOT the USA's model.
I don't have as an emotional reaction, so it's not clear to me why in that scenario it wouldn't be on the city to make sure they're doing inspections at a rate that can keep up with development instead of slowing down development to keep a smaller budget?
The slowing of development is clearly a political tool that can be used to wield political power & favors. I'm not sure the consequences of removing that tool but it would be that. There's also a concern about budget because if the development pace keeps up enough, then queue management of outstanding orders is also a problem (although that's true today, it's a problem for developers instead of the government). It might be interesting to have statuatory pricing for scheduling inspections for specific times (e.g. if you need it by next Monday, the price is 10 000x, if you make a reservation for an inspection in 12 months, the price is 0.5x & if you reschedule there's a meaningful penalty) & having requirements that the inspection must be completed within X days of some milestone (e.g. the business being open). That way the budget problem and the development process are intertwined and self-funded without involving politics and limiting how much competitors can screw over each other.
Also, it's not all or nothing. Fire inspections are not typically the issue.
The bigger issue though is things like electrical inspections which are blockers since they have to happen before other parts of the process complete (i.e. hard to inspect electrical when the business is open and the walls are all finished).
I’m sick to death of software developers attempting to drive-by engineer solutions to fake problems that they have zero idea about. Like, come on. Maybe it’s be worth getting some input from someone that actually knows what common problems these supposedly needlessly burdensome regulation tend to pick up.
It's not a bad idea to consider an outsider's perspective of a completely alternate structure and to experiment when things aren't working. Focusing just too much on insider expertise can narrow your focus to in-the-box thinking and encourages the status quo which benefits those insiders. You're right that you should consider the expertise of insiders - you need both groups working in tandem.
Don’t. I ended up shutting my business down and leaving. Got sick of dealing with the corruption. I normally don’t say this about anywhere in the us but SF is corrupt.
Planning department won’t approve anything without an “expediter”. right. You know that’s code for bribery right?
The tax office loves to just make things up and then be unavailable to discuss it. My accountants tied them half a dozen times. I tried them the same number. They just kept insisting this made up thing was real.
My choice was to just pay it and move on or leave. I chose to leave.
>"The neighborhoods that need investments and resources the most are still tied up in red tape.
In corridors where Prop. H did take effect, converting an office space to an entertainment venue still takes months. That is when the use is already allowed by zoning: Over 30 days where Prop. H applies and six to nine months where it does not.
Imagine trying to open a music venue, which requires an entertainment permit that takes another two to four months, plus a 30-day public notice for people to comment, plus mandatory neighborhood outreach and a hearing before the Entertainment Commission. Any opposition from a neighbor, neighborhood group, or competitor can further stall the process.
Business operators must also pass inspections by the San Francisco Fire Department, Department of Public Health and Department of Building Inspection for plumbing, electrical and building compliance. Waiting for a license from the Department of Alcoholic Beverage Control, which includes an FBI background check, adds two to six months. This administrative and financial burden can quickly turn into a dead end and sap even determined entrepreneurs’ energy, determination and bank accounts.
As I consider opening a second art and entertainment venue, I am frustrated by the extensive paperwork and community outreach still required, despite the latest legislation intended to aid small businesses. Streamlining exemptions forced me to reject some locations due to the excessive administrative and financial burden."
Reminds me of the following movie scene:
"Back to School (1986) - Thornton Talks Business":
My friend owned a 4000 sq ft warehouse that was licensed for automotive repair, but all he did was run a NASCAR team out of it, prepping the car there for races.
Being 2008, he fell on hard times and wanted me to move into his place instead of a popular strip mall location I was in (that had a 20 year old conditional use permit in place for car sales I rented under).
The city would NOT let me operate an online car dealer from his warehouse. They wouldn't sign off for it for the DMV. They said car repair was one thing, but if I wanted to sell cars from there, even online, I needed a conditional use permit process to approve it. It was several thousand dollars, and they could not provide any insight to tell us if it would be approved.
So I didn't move. My friend lost the place. And it sat empty for EIGHT YEARS. Because my local city government wasn't sure they should allow me to sell cars from a place... A place that technically was allowed to have it's entire storage yard full of broken down cars in various states of disrepair if it wanted to.
Great decision on the cities part...
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