DATE: April 3, 2023
TO: Council Economic Development Committee
FROM: Acting Development Services Director
SUBJECT: Strategic Roadmap Priority: Sidewalk Vending Ordinance
RECOMMENDATION
That the Council Economic Development Committee (CEDC) reviews the report and provides feedback and direction to staff regarding the proposed goals and policies of the proposed sidewalk vending ordinance.
SUMMARY
Senate Bill (SB) 946 was signed into law on September 17, 2018 by Governor Jerry Brown. Effective January 1, 2019, SB 946 decriminalized sidewalk vending statewide and limited local jurisdictions’ authority to regulate sidewalk vending. Further, SB 946 preempts any contrary local regulations, requiring any local regulation of sidewalk vending be consistent with SB 946. The City currently does not have an ordinance that regulates sidewalk vendors and the purpose of this proposed ordinance would be to establish a regulatory framework for all sidewalk vendors operating within the public right-of-way in order to maintain public health, safety and general welfare.
In 2019, the City Council adopted its Strategic Roadmap Priorities and one of the priorities identified was to develop a Sidewalk Vendor Ordinance that aligns with SB 946. The Planning Division is undertaking the effort to update the Municipal Code to be compliant with SB 946 and establish a set of guidelines to allow sidewalk vendors the ability to operate safely within public right-of-way. Further, congruent with the state legislation, the ordinance would promote entrepreneurship and economic empowerment among low-income and marginalized communities. As part of the update efforts, the Planning Division has conducted outreach and engagement with stakeholders in the community to receive input on a regulatory framework for sidewalk vending. City staff is seeking additional input and policy direction from the CEDC to be considered in the preparation of the ordinance.
BACKGROUND
The Safe Sidewalk Vending Act, also known as SB 946, was signed into law by then-Governor Jerry Brown on September 17, 2018, and became effective January 1, 2019. By decriminalizing sidewalk vending statewide and limiting local jurisdictions’ authority to regulate sidewalk vending, SB 946 aimed to provide “important entrepreneurship and economic development opportunities to low-income and immigrant communities,” increase access to “culturally significant foods and merchandise,” and contribute “to a safe and dynamic public space.” Most significantly, SB 946 preempts any local regulation that is inconsistent with State law and, absent consistent regulations, the legislation required local jurisdictions to develop and adopt regulations that align with SB 946.
Since the effective date of the statute in 2019, the City has been working to develop a regulatory framework that aligns with State law. City staff has convened on several occasions to discuss the implications of the statute on the City’s existing regulations related to sidewalk vending and the potential development of a regulatory program consistent with state law. Moreover, in adopting its FY 2021-23 Strategic Roadmap, the City Council included the “Sidewalk Vendor Ordinance” as a priority in an effort to “invest in programs that support Hayward businesses and workers” under the “Grow the Economy” strategic priority.
Due to shifting priorities in response to the COVID-19 pandemic, the project was suspended until the fall of 2022. Since that time, the Planning Division has conducted additional outreach and engagement with stakeholders and a summary of that feedback is provided below.
Public Outreach. On December 19, 2022, City staff held an informal listening session with several of the business owners that had previously attended City Council meetings with concerns about the increase in street/sidewalk vendors throughout the City. Staff provided an overview of SB 946 and the business owners were given the opportunity to express their concerns, which focused on public safety and whether the City could initiate enforcement activity on sidewalk vendors. Staff also discussed the types of enforcement activities that the City could engage in. City staff followed up with each of these business owners and provided an update explaining the extent of the City’s enforcement authority regarding sidewalk vendors.
Following that initial stakeholder meeting, additional outreach efforts have continued through a series of targeted stakeholder meetings. On February 2, 2023, a stakeholder meeting was held with sidewalk vendors. The meeting had a total of 10 attendees, including five City staff, two sidewalk vendors, one potential sidewalk vendor, and two staff members of a community organization.
In February, staff also held additional meetings with the Hayward Unified School District (H.U.S.D.), Downtown Hayward Improvement Association (DHIA), Hayward Area Recreation and Park District (H.A.R.D.), Alameda County Department of Environmental Health, and the Agricultural Institute of Marin (Farmer’s Market). While H.U.S.D. had not received recent complaints from parents about sidewalk vendors, H.U.S.D. is researching whether this issue was raised and discussed with the executive team and is discussing whether there is interest in a buffer distance between schools and sidewalk vendors. As for the DHIA, complaints about sidewalk vendors operating near restaurants have not been received, but the concern that sidewalk vendors undercut into the profits of restaurants has been raised. DHIA also mentioned that ADA accessibility and health and safety concerns should be addressed in the ordinance.
As for H.A.R.D., although they have jurisdiction over parks within its system and have dealt with vendors, it has been observed that the vendors move from the park to the sidewalk and, at times, to the sidewalk across the street from the park, creating a hazardous condition for people crossing lanes of traffic outside of the crosswalk. To address this potential hazard, H.A.R.D. has expressed interest in a buffer distance between its parks and sidewalk vendors.
As for the Alameda County Department of Environmental Health, given that a county-issued Mobile Food Facility Permit is generally required for sidewalk vendors that sell food and that the county holds workshops to educate the public about the permitting process, interest in a partnership with the City in holding workshops after ordinance adoption was expressed. As for the Farmer’s Market, one of the challenges observed in other jurisdictions was sidewalk vendors near the farmer’s market. The farmer’s market was interested in a buffer distance between sidewalk vendors and the market but was also willing to partner with sidewalk vendors to be included in the market.
In mid-February, staff launched a webpage that provides regular project updates as well as information related to SB 946. The webpage also contains staff contact information, provides key dates for future stakeholder meetings, work sessions, and public hearings, indicates key project milestones, and will provide members of the public access to the draft sidewalk vending ordinance when completed. The webpage can be accessed at the following web address: https://www.hayward-ca.gov/content/sidewalk-vending-ordinance-update.
Moreover, a dedicated email address for the project ([email protected]) was created which allows members of the public the opportunity to sign up for project notifications and submit comments. To date, there have been 72 comments received from the public. The comments were related to the general comments of competition with brick-and-mortar businesses, permitting, public safety, food safety, cleanliness of area and equipment, traffic, and impact on neighborhood appearance.
Additionally, staff is currently working to develop an online survey to give the public an additional opportunity to give their opinions on sidewalk vending and get a better understanding of interests, opportunities, and concerns tied to the project. The online survey will be available on the project’s webpage and will be utilized to gather additional input to supplement the input collected at the stakeholder meetings. On February 23, 2023, an article was published in the East Bay Times that highlighted the City’s community outreach efforts and progress toward the development of a sidewalk vending ordinance. Staff emphasized taking a balanced approach to ensure that the new sidewalk vendor program established policies to ensure safe operation by sidewalk vendors and provide an equitable and inclusive approach.
In late March, staff performed additional canvassing throughout the City to meet sidewalk vendors and obtain additional feedback. Staff also anticipates holding a second stakeholder meeting with the business owners in early April to provide additional opportunities for public comment.
Additionally, staff plans to meet with the Government Relations Committee of the Chamber of Commerce in early April to obtain feedback and is also planning a work session with City Council in May 2023 to receive additional feedback on several key policy issues.
Council Economic Development Committee
In February 2020, staff brought this item before the CEDC to report on the progress of the project and receive clarification on the City Council’s recommended policy approach. The CEDC suggested that if either a permissive policy approach or a regulatory approach were undertaken, an entrepreneurial permitting program should be established, with rules and guidelines that participants would be required to follow to ensure public safety such as obtaining a County health permit. The CEDC also expressed concerns about businesses based outside of Hayward coordinating sidewalk vendors to sell products in the city and the impact of sidewalk vending on brick-and-mortar businesses. Other considerations included a requirement that sidewalk vendors carry insurance coverage, receipt of sales tax from the selling of merchandise, and inclusion of a list of conditions and best practices in the ordinance.
DISCUSSION
SB 946 Overview
The Safe Sidewalk Vending Act, or SB 946, applies to a “person who sells food or merchandise from a pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other nonmotorized conveyance, or from one’s person, upon a public sidewalk or other pedestrian path.” Under SB 946, a city cannot entirely prohibit or criminalize sidewalk vending. Further, the provisions of SB 946 preempt any contrary local ordinance related to sidewalk vending and requires local jurisdictions to adopt ordinances consistent with SB 946 to lawfully regulate sidewalk vending. SB 946 is codified in Sections 51036 to 51039 of the Government Code.
Generally, SB 946 allows local jurisdictions to adopt a range of regulations as long as those regulations are directly related to objective health, safety, and welfare concerns. Expressly permitted regulations under the statute include the following:
Cities may prohibit stationary vendors in residential zones outright, but not mobile vendors. Mobile vendors may be subject to reasonable regulations directly related to objective health, safety, or welfare concerns.
Cities may prohibit sidewalk vendors to locate near certified farmers’ markets, swap meets, or other specially permitted temporary events, but only for the duration of the event.
Cities may prohibit all sidewalk vending in a park (including beaches or open space areas) if a city has an exclusive concessionaire agreement for that site.
SB 946 also enumerates a set of permissible optional regulations that a city may adopt. While the list is not exhaustive, the statute provides examples of reasonable time, place, and manner restrictions directly related to objective health, safety, and welfare concerns:
Limitations on hours of operation that are not unduly restrictive. In non-residential areas, any limitations on the hours of operation for sidewalk vending shall not be more restrictive than any limitations on hours of operation imposed on other businesses or uses on the same street; Requirements to maintain sanitary conditions;
Requirements necessary to ensure compliance with the federal Americans with Disabilities Act; Requiring the sidewalk vendor to obtain from the local authority a permit for sidewalk vending or a valid business license; Requiring the sidewalk vendor to possess a valid California Department of Tax and Fee Administration seller’s permit; Requiring additional licenses from other state or local agencies to the extent required by law (e.g. a Mobile Food Facility Permit issued by Alameda County); Requiring compliance with other generally applicable laws (e.g. fire safety requirements); and Requiring a sidewalk vendor to submit information on his or her operations.
SB 946 also limits the regulations that cities may impose on sidewalk vendors. including:
Prohibiting all sidewalk vending;
Requiring a sidewalk vendor to operate only within specific parts of the public right-of-way or only within specific neighborhoods or areas – except for a restriction directly related to objective health, safety, or welfare concerns; Restricting the overall number of sidewalk vendors permitted to operate within the City– except for a restriction directly related to objective health, safety, or welfare concerns; and Requiring a sidewalk vendor to first obtain the consent or approval of any nongovernmental entity or individual before he or she can sell food or merchandise Additionally, SB 946 imposes limits on local jurisdictions’ enforcement mechanisms. After January 1, 2019, a city can no longer punish sidewalk vending by criminal infraction or misdemeanor. Instead, if a vendor violates local regulations, the State has established the following maximum fine amounts:
First Violation
Administrative Fine of $100
Second Violation Within One Year of First
Administrative Fine of $200
Each Additional Violation Within One Year of the First
Administrative Fine of $500
Fourth and Subsequent Violations
Revocation of Permit
If a sidewalk vending permit is required, vending without a permit is punishable by the following fines:
First Violation
Administrative Fine of $250
Second Violation Within One Year of First
Administrative Fine of $500
Each Additional Violation Within One Year of the First
Administrative Fine of $1,000
SB 946 also requires local jurisdictions to establish an administrative process to determine one’s ability to pay the administrative fine.
If selling food, the sidewalk vendor is also required to obtain a Mobile Food Facility Permit issued by Alameda County Department of Environmental Health. If a complaint is received that a sidewalk food vendor is allegedly violating provisions of the California Health and Safety Code, an Alameda County Department of Environmental Health Inspector will investigate in pairs and if the violation is found, will prepare a Notice of Violation. For a first violation, the Notice of Violation is sent that informs the vendor that they’re in violation of the state Health and Safety Code, cites the specific regulation that they’re violating, and provides outreach documents that contain instructions on how to become compliant. For a second violation, an Inspector from the Department of Environment Health will contact the vendor again to highlight the violation as well as provide the necessary documentation to be compliant with health and safety codes. In some instances, the cart/pushcart will be impounded.
Proposed Municipal Code Amendment
In order to be consistent with SB 946, the City will need to amend sections of the Hayward Municipal Code (HMC) that relate to sidewalk vending, including Section §8-1.84, which regulates peddling by foot or vehicle. The existing regulations that apply to food vending on private property will remain unchanged as SB 946 only addresses sidewalk vending in the public right-of-way. As previously stated, if the City would like to regulate sidewalk vending, the City will need to adopt new regulations and administer a program that complies with SB946. These regulations will replace regulations that do not substantially comply with SB 946.
Summary of Other Sidewalk Vending Regulations
As part of staff research, staff reviewed Ordinances of nearby cities that have adopted a similar sidewalk vending ordinance. These cities include Cupertino, Danville, Fremont, Oakland, Pleasanton, San Jose, South San Francisco, and Walnut Creek. Most of these cities maintain a registry for the sidewalk vendors operating in the city and all jurisdictions require sidewalk vendors to obtain a local permit in addition to any other health and safety permits required by their county. In addition, all jurisdictions surveyed do require minimum setback distances between sidewalk vendors and certified farmer’s markets and schools, require a minimum unobstructed area in compliance with the Americans with Disabilities Act, require that sidewalk vendors provide trash receptacles for food waste, and require that sidewalk vendors provide proof of general liability insurance.
Other Permits Required
Generally, sidewalk vendors that sell food are required to obtain a Mobile Food Facility Permit issued by Alameda County Department of Environmental Health. The Mobile Food Facility Permit program applies to a truck, trailer, cart, pushcart or another vehicle that meets California Retail Food Code requirements and operates in conjunction with an approved commissary or food facility. A commissary is a facility approved by the Alameda County Department of Environmental Health to provide required services for mobile food facilities, mobile support units, or vending machines. At the commissary, food is prepared or packaged, utensils are cleaned and sanitized, liquid waste and refuse are properly disposed of, and potable water is obtained.
However, recent State legislation exempts from the Mobile Food Facility Permit requirement any sidewalk vendor with 25 square feet or less of display area that sells only bagged snacks, cans of soda, bottled water, whole fruits and vegetables, canned goods that do not need to be refrigerated, and other similar foods. If the City elects to adopt a local permitting program, any regulation will also need to take into account the exemptions allowed per State law.
Feedback Requested from CEDC
Staff is in the process of obtaining stakeholder feedback prior to developing the draft Ordinance and specifically, staff would like feedback from the CEDC on the following:
Should the sidewalk vending ordinance include some of the optional regulations that are allowed per State law, such as establishing setback requirements from certain land uses, such as schools, parks, parking lots, public fixtures, and farmer’s markets? Does the CEDC support limiting the hours of operation for sidewalk vendors? Does the CEDC support the establishment of minimum performance standards for sidewalk vendors that includes maintaining sanitary conditions, maintaining sidewalk clearance in accordance with the ADA, providing trash receptacles to dispose of waste, and complying with noise regulations? Does the CEDC support establishing a permit fee to cover the cost of administration and enforcement of the new sidewalk vendor program or does the CEDC recommend the permit fee be lowered as to not create an additional financial burden on the sidewalk vendor and create a barrier to entry for compliance? Does the CEDC support enforcement that is more focused on the maximum fines similar to the State or more focused on a collaborative means for compliance, focused on education and awareness?
NEXT STEPS
Following the CEDC meeting, staff will continue to obtain comments and feedback thru the end of April and plans to present those findings to the City Council a at work session, tentatively scheduled for late May 2023. Following the Council feedback, staff will prepare the draft ordinance for public review and feedback prior to finalizing the Ordinance and presenting it to Council, which is anticipated for late Summer 2023.
Prepared by: Rozalynne Thompson, Senior Planner
Recommended by: Sara Buizer, Acting Development Services Director Paul Nguyen, Chief Economic Development Officer
Approved by:
_______________________________________
Kelly McAdoo, City Manager
SB 946, Section 1 - Bill Text - SB-946 Sidewalk vendors. (ca.gov) February 3, 2020 CEDC Meeting Minutes: https://hayward.legistar.com/View.ashx?M=E3&ID=752549&GUID=55B8F6DC-4EB5-4A69-9DB3-ADD4E3C2B809 Government Code: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=GOV&division=1.&title=5.&part=1.&chapter=6.2.&article=