San Diego officials talked about sanitation, safety and foot traffic when they passed 64 pages of rules for sidewalk vendors in 2022. The city said nothing about creating barriers to protect restaurants from competition.
But now that the restrictions are in place, San Diego Mayor Todd Gloria is saying the quiet part aloud. He wants hot dog stands and other mobile businesses gone from certain parts of the city to keep brick-and-mortar merchants happy — not because sidewalk vendors are causing public harm, but because they are providing valuable services that customers like.
Gloria has even threatened to unleash the most severe penalty possible under the new ordinance. He says code enforcers will impound pushcarts and other equipment from any sidewalk vender caught in the Gaslamp Quarter.
Perishable goods like hot dog wieners will go in the trash immediately. Everything else will go into storage while daily fines and fees accumulate. If venders cannot pay the ransom within three months, the city will declare their property abandoned and forfeit it permanently.
Entire livelihoods could be lost, which is harsh. But San Diego wants to send a clear message to people struggling to eke out an honest living: Stay away from favored businesses or pay the price. “We will not allow the brazen disregard of our city’s sidewalk vending ordinance,” Gloria writes in a statement.
He says nothing about the city’s brazen effort to flaunt California Senate Bill 946, which legalized sidewalk vending throughout the state on Jan. 1, 2023. San Diego gets around the law by making life miserable for sidewalk vendors without outright banning their existence.
They can peddle their wares if they obtain the right permits, pay the right fees, show the right tax documents, operate during the right hours, scale back during the city’s “summer moratorium,” and stay in the right places. The Gaslamp Quarter and East Village District are permanently out of bounds. So are certain San Diego parks, unless the city awards a special permit controlled through a quota system.
Besides ketchup and mustard, hot dog vendors might need legal counsel to navigate the bureaucracy. The complexity is by design. San Diego uses the convoluted rules as a deterrent to market entry. Yet the protectionism is misguided.
Street vendors benefit brick-and-mortar businesses by attracting customers and creating vibrancy. Office workers who might otherwise stay in their cubicles come outside for lunch. Friends and families come for shopping. Couples come for dates.
Once these people open their wallets, they see other things they need and continue spending. Overall, the size of the market grows, creating more revenue for everyone.
One Los Angeles study calls it the “sidewalk stimulus.” Brick-and-mortar stores near sidewalk vendors in Los Angeles were more likely to experience job growth than other stores. Another study found that when Chicago shut down a popular sidewalk vending community to make room for a university expansion, the business ecosystem that revolved around the market lost $49.3 million.
Research from our public interest law firm, the Institute for Justice, also finds benefits for sidewalk vendors, who tend to be economically disadvantaged. More than half are immigrants, 62% are people of color, and 28% did not complete high school.
What they lack in education, they make up for with enterprise. Full-time sidewalk vendors work, on average, more than 11 hours a day, five-and-a-half days a week. Three out of four part-time vendors hold a second job. Selling products from pushcarts and mobile stands offers this group an avenue to entrepreneurship, allowing them to create value in their communities.
The third beneficiary is the customer, who gains access to a wider variety of goods. It is a win-win-win scenario, which California lawmakers understood when they legalized sidewalk vending across the state.
San Diego’s government wants to impound sidewalk carts instead. The goal is to pick economic winners and losers, but officials should not allow themselves to become one competitor’s henchman by taking another competitor’s property.
Stifling entrepreneurship has consequences. Cities do their best when they help everyone thrive.
Justin Pearson is a senior attorney and Daryl James is a writer at the Institute for Justice in Arlington, VA.