An Open Letter to the Business Community

What can we do better?

Urbanist Article February 1, 2003

Sometimes it seems like the San Francisco business community is its own worst enemy. Some of its actions during the last boom helped create the conditions for an anti-business backlash. And the wrong actions today could stall the local recovery.

The business community, of course, is not really a "community," but instead a set of very diverse individuals and firms, with various interests and motivations. The same goes for any interest group, whether that be "labor," "the environmentalists," or "the neighborhoods." Nevertheless, there is an identifiable set of business leaders who are active in city politics and do their best to represent the interests of firms trying to do business in San Francisco.

Let's start with the basics of the business- government relationship. It's the business community that funds the government, either in the form of direct business taxes or in the form of taxes paid by employees. So it's clear that the public sector needs business.


But the business community needs the public sector just as much. Focusing just on local government, one could say that business needs four basic things.


First, businesses that want to invest in San Francisco need a desirable place to live and work. This is both because many business leaders are also
San Francisco residents, and also because it's important to be able to attract creative, educated employees. San Francisco is, fundamentally, a good source for innovation and value in the economy because smart, creative people want to be here. This requires parks, schools, and all the rest. Local government has the major responsibility of making San Francisco a good place to live. To carry out these responsibilities, local government needs to be generously funded.


Second, the business community needs infrastructure--energy, water, sewers, and especially transportation. In a city with any density, a large portion of trips are going to be made on public transit or on foot. This is not a philosophical issue; it is a matter of simple geometry. There is not enough space to fit a car for every person who works in a real city. Downtown San Francisco could not have high-rises without BART and the Muni Metro.


Third, the business community needs predictability when making investments in the city. The rules governing where we can build housing or build places of employment or invest in equipment need to be clear and predictable. When new developments are "conditional" rather than "as of right," even when they meet all the guidelines of good planning policy, it is extremely risky to undertake new projects. We need a strong planning function that balances various community interests and produces clear rules up-front about what is allowable and what isn't. The goal is to build consensus in the community about which changes are desirable, and which are not, so that both developers and nearby residents know what to expect.


Fourth, the business community needs housing to be affordable. This, fundamentally, means that the government will carry out long range land use planning that enables the housing supply to increase enough to keep prices down.


It goes without saying that the business community needs a lot more from other levels of government--monetary policy, defense, copyright laws, and a long, long list of public responsibilities.

But staying focused on San Francisco, the business community has been off-base with some of its actions in recent years. While displaying incredible leadership in its support for affirmative action, cultural tolerance, and gay rights, it has often gotten itself into trouble on issues relating to development and support for the functions of local government.

During the last round of growth wars, the business community let itself be taken captive by individual property owners who were pursuing specific projects, rather than stand up for sound planning and a predictable set of opportunities for development.


During the first round of district elections in 2000, the business community supported a number of losing candidates who were perceived to be "reliable" rather than independent moderates who would balance the needs of the business community with other issues of citywide importance.


In transportation debates, the business community continues to push new parking as the solution, without looking at how prosperous, well-run cities around the world work. Where past generations of business leaders led the campaign for BART, understanding that transit increases property values and allows for efficient access, many of today's business leaders do not understand that real cities must operate differently from suburbs when it comes to transportation investment.


And most troubling of all, the business community has continued to pursue an agenda of opposing all new (and some existing) local taxes. The lawsuit over business taxes, the opposition to the increase in the real estate property transfer tax, and frequent campaigns against bond measures all show disturbing signs of short-sightedness.


The message needs to change. Instead of "no new taxes" it needs to be "effective government." Effective government means government that is well-funded and that provides good value for the money it receives. It is absolutely appropriate for the business community to hold government accountable for not squandering the resources it has. This means pushing for labor reform, performance measures, modern hiring practices, a contract awarding process that is squeaky clean, and a host of other changes that will make government work better for everyone.


In cases where a city function is clearly wasting money, it is appropriate for the business community to make funding increases conditional on real reform. But most of the time, the business community isn't making the distinction between departments which are well-run and those which are not. Instead, it's simply opposing taxes. It's time to get more sophisticated.

You need a good business climate.

You need a cooperative relationship with local government.


You need predictability about investments you might make in the city.


You need well-funded public services that make San Francisco an attractive place to live and work, a city in which we all can have pride.
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About the Authors: 

Jim Chappell is president of SPUR.

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