Friday, June 15, 2012

City government as extortion racket

This ice cream parlor had to pay $31,000 in city fees to open.
Photo by Scott James for Bay Citizen

The MTA's parking meters and parking lots are among the city's most lucrative enterprises, but other city departments are equally aggressive in extracting money from city residents and businesses.

The Planning Department hit a guy with $44,000 in fees when he tried to convert an old Mission district warehouse into a bowling alley.

A woman who had the temerity to open an ice cream parlor in Cole Valley was charged $11,000 just to turn on the water and $20,000 in additional fees by the city.

And David Marks was rash enough to open a shop on Valencia Street:

When he opened four years ago, he went to City Hall to get his business license and go over a checklist of what else was needed to operate. He never was told that he needed a police permit. Last year was the first time he heard about it when police officers stopped by asking to see it. "I had no idea what they were talking about," Marks said. He learned that it would cost him nearly $1,400, an expense he would be hard-pressed to afford. He contacted Wiener, which prompted the supervisor and his staff to take a closer look at all the police codes. Marks still hasn't paid the permit fee, and on Tuesday, police contacted him again, saying he could be charged with a misdemeanor if he doesn't comply.

A little surprising that city cops are part of the ongoing City Hall shakedown operation against small business, but cops and firemen aren't excessively scrupulous, since they are the primary scammers of city's pension system.

I gave Supervisor Scott Weiner the Worst Legislator of the Year award for his misguided attempt last year to dilute city voters' initiative rights and his fatuous response to the creeps who persist in walking around naked in the Castro. But Weiner is well on the way to redeeming himself by trying to eliminate the burdensome, obsolete laws like the one city cops are using to bully David Marks.



At 1:41 PM, Anonymous David Backkeio said...

Good article. You might also mention the city's attack on AirBnb - forcing residents who rent out a spare room to pay a hotel tax even though there's zero evidence that AirBnb hurts the hotel industry and much evidence that it puts more money in the local neighborhood economy.

The real reason? The city is about to lose their idiotic lawsuit against Expedia claiming that expedia owes them money. So they take it out on homeowners and renters who can't fight back!

At 10:37 PM, Anonymous Anonymous said...

There is, however, plenty of evidence that the *users* of AirBnb harm the other residents of the buildings that they are turning into short term rentals, completely unregulated.

Hookers and drug dealers put money into the local economy too. But you don't want one next door to you.

At 10:40 PM, Anonymous Anonymous said...

there's zero evidence that AirBnb hurts the hotel industry...

That's not the point of the tax issue. We came up with a set of laws to raise revenue for the city. One of them is a lodging tax. The AirBnb hosts who are not complying are simply tax evaders, plain and simple. The tax dollars we collect from lodging taxes are used for a lot of things that draw tourists to the city. You want to have your cake and eat it too? BS.

At 9:35 PM, Anonymous David Backkeio said...


There is zero evidence that "users" of AirBnb harm anything except in rare, isolated cases. On the contrary, they allow SF residents extra income that goes straight into the local economy, unlike Hotels which typically send most money to corporate HQ and chain stores in Union Square.

Why should a tax be levied just because it can be? Again, Hotels are as full as ever. There is no lost revenue to the City from AirBnb, why suddenly grab for more? The city EARNS money from AirBnb right now. There is no reason to tax it.

The only exception I would make are the small number of folks renting out multiple unites on AirBnb. I have no problem regulating them with a tax because they can be legitimately seen to be taking away from housing stock.

At 10:18 AM, Anonymous Anonymous said...


If residents of multi-unit apartment buildings wanted a revolving door next door to them, they would live in a hotel. The regulations on short term rentals are there for a reason.

There are many services that the city provides for tourists that are covered by lodging taxes. When a subset is providing lodging for tourists without providing the taxes to pay for those services, they are evading taxes at the expense of legitimate lodging.

And the key point is this - we are not talking about the Mark Hopkins - that is a completely different market - being impacted. There are numerous small operators of "Real" BnB's in this town, 3-4 room operations that are registered, regulated, paying taxes. Those operators - who make income that goes straight into the local economy, are the competitors of the non-regulated tax evading competition.

At 11:21 AM, Blogger Rob Anderson said...

No, the "key point" is still City Hall's relentless quest for more revenue to support its bloated payroll and to pay for boondoggles like the Central Subway.

At 2:19 PM, Anonymous Abbot Rhineway said...

Thank you Rob. It's rare that I agree with you.

Anonymous(s) ---

I have no problem with AirBnb hosts who are legitimately competing with B&Bs to be taxed. The fact is, however, that 90% of their hosts are just you and me renting our place when we're out of town. B&Bs are under no threat.

Why can't you let people enjoy a good thing that takes some of the sting off your rent without shoving the government up their butt?

My guess? The "anonymous" posters here don't live in San Francisco at all and are just jealous we've found a way to make it more affordable.

At 12:55 PM, Anonymous Anonymous said...

As someone who uses VRBO to rent out 2 places and who pays his proper taxes, anyone who is evading taxes is competing with me directly and playing with an unfair advantage by not paying their taxes, while using the services of SF's tourism mechanism to find tenants.

I am not running a B&B nor a hotel. And you are cheating.


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