commission this thursday. most specifically, the cottage food ordinance that's proposed allows for the sale -- for the production and sale of certain foodstuffs out of the home in a space up to a third of that space. and the reasons for this are that it provides some more healthier options, helps people supplement their income slightly and pushes us along the path for more sustainable food sources at a small level. supervisor chiu has long been interested in these issues. he carried a urban agricultural legislation in 2011 and looks forward to carrying further ag legislation when additional state law changes in the near future. the legislation also makes two changes related to accessory uses more generally. accessory uses essentially -- the secondary use, aside from whatever the primary and essential use of a particular site s in a residential situation, the accessory use in this instance would be cottage food.

the other two general accessory use changes are extending the floor area allowed from quarter to a third. this is planning department's estimation of what is a more reasonable amount. particularly with cottage food, there was consideration of exempting the kitchen or having half the kitchen count. instead to make it cleaner and easier to enforce they're going with this recommendation of a third, a third of the square footage. and additionally right now, accessory use [speaker not understood] only apply in certain zoning districts. not including, for example, pdr and the planning department's feeling is that these accessories provision should be applied city-wide. so, again, the two changes related to accessory uses are going from one quarter to one-third and making the accessory use guidelines city-wide. i believe aaron star from the planning department is going to be here soon and can also help answer technical questions.

we had been in discussions with staff about looking at expanding these cottage food provisions to other activities. right now this with cottage food we would continue to have the discussions and really appreciate the work of christian and regina with their office and the conversations we've been having. i did want to make one additional detail about the cottage food ordinance. it allows for one person to be hired and to work out of the operation, which is not allowed right now. so, that is one of the specific provisions that's allowed in the ordinance. my understanding is that there have been some discussions at the committee level of the small business commission about the planning department's fee that would be charged to help -- to review the cottage food application. this is really a permit that's going to be approved by the department of public health and would get referred to planning similar to the way that

restaurant applications are handled. we understand that concern and really want to do everything we can to keep this streamlined and easy for cottage food operators to do. and we believe that at this point that one-time fee is understandable from planning's perspective since they're a fee based department to recover the cost. it is important that it is one time and not an ongoing fee, for example, the business license fee registration. we're interested in hearing the commission's thoughts on that item. i'm here for any questions, happy to hear anything that you all have to -- would like to talk about the item. >> commissioners, any comments? commissioner white. >> yes, the $130 zoning fee, why is that required for this cottage food ordinance? >> because there is -- it's a planning -- the cottage food operation is essentially enshrined in the planning code. so, the planning department will get the referral from the department of public health and

make sure that it matches what the zoning is. and, so, because planning has an involvement in it, that's what they've calculated their fee to be. there's not really -- we don't really see an alternative for planning not having that referral. i do expect them to be here soon and they might be able to elaborate a little bit more, but at the most basic level, it's a planning code issue. cottage food is defined in the planning code. planning has to, has to review it. and, so, that's why there's a fee. >> are there any other zoning fees for other home-based businesses in san francisco? >> this would be the first -- this would be the first allowance of something like -- exactly like this out of a -- it's in the planning code to my understanding. i don't know that there's anything comparable, but the planning department does make -- does look at, you know, whether a particular use matches a planning code all the time. there are charges and fees associated with that.

so, it's not unprecedented in that sense. it would be very unusual for planning to have to review something and not, and not have a fee associated with it. >> any other? but if the health department -- so, it does have to go through some type of planning? >> planning just has to -- it gets referred from planning similar to what happens with restaurants now is my understanding. so, they basically look and make sure that -- the health code is looking to make sure it's safe from a health perspective and planning is looking at it to make sure it matches the planning code. there is not a commission review at the planning department which would be a significant additional expense, for example, so that is not being proposed. that's an option, and that would be significantly higher. if you apply for a conditional use or something like that, you're looking at a much higher chart potential fee. so, we're working with the department, the planning department sees this as the most limited involvement that they can have and therefore the

lowest fee that they can reasonably charge. >> commissioner ortiz. >> first of all, i love this, i love this legislation. i think the only question i had in reviewing this is anything to do with cannabis, you know like how there's edibles in the industry, would that -- any legislation or ordinances overlap with this? >> i'd have to look at it, but i don't think this directly involves the ntd regulation is a separate operation. i can clarify that -- >> i'm saying like edibles like a brownie or cookie cottage industry. would they still have to follow the ncd regulations or would this now fall under the cottage industry and they're allowed to sell their products as such? he >> i believe they're still required to follow the ncd regulations but i can confirm and check for you. >> thank you. >> commissioner o'brien. >> so, if i understand, you're

talking about making this ordinance effective city-wide? >> cottage food ordinance is effective city-wide, correct. an accessory use provision would be made across all zoning categories. accessory use requirements would be across all zoning categories. >> so, i'm trying to understand exactly what would the planning department do. i mean, so, they don't have to get an approval from the planning department. if it's an approved activity city-wide, do they? they don't have to check that it's zoned for this or anything like that because it's approved city-wide already. >> there is still a referral at the staff level to make sure that the proposed activity matches what the planning code describes. so, for example, if someone proposed -- had a diagram or drawing and they were using half of the space, the planning department would be the one that says, no, you're only allowed to use a third of the space for the accessory use.

and, so, even though the general category is allowed, the planning department staff will still have a role in making sure that the proposed operation matches the planning code. >> okay, thank you. >> commissioner dwight. >> i guess we need to hear from the planning department because it's not clear what would be -- i mean, i had the same question. if it's allowed everywhere, what exactly do they have to do short of the registration fee, which should be sort of the gate, i would think, you either can register or you can't. so, and i can see where perhaps they have to do a review of whether it meets the space allocation. so, i don't know, but i'd like to know because if all they're doing is rubber stamping it, then i'm not quite sure it should be any more than a registration fee and why actually it should be up at all. >> one argument that i remember the planning department making at one point they made was by

having planning review it you're protecting the cottage food operator against future complaints. for example, again to useedth simplest one, if i'm a neighbor and i don't like the cottage food operation that's happening next door i could say they're using ~ the whole house or whole apartment to create jam. so, if you've already had planning department review the plan, as long as what you're doing matches up with that, then that would protect that operator from the complaint and planning would have a record that they had reviewed it and that sort of thing. >> commissioner dooley. >> as far as our information, no other home based business is required to have this zoning referral. so, i'm just kind of wondering why this one particular home based type of business now has that. >> one important aspect of this is that no other home based business is allowed to hire any

additional staff to help with the business. so, and that's one of the items that's -- that we've been discussing with staff. so, it's actually going beyond for this cottage food category business what's allowed for other home based businesses. again, i want to be very clear that is based on the passage of the state law, that essentially requires us to regulate the cottage food operators. there were options how to go about that. the state says you can't deny an operating permit for. this the planning department is working with us on how to do it. they do have the item before the planning commission on thursday as i mentioned. >> so, does supervisor chiu support this fee? >> supervisor chiu respects the planning department's need to be involved and supports this regulatory structure that includes a fee, so, yes. >> okay. i can tell you that as someone

who has taken out quite a few permits over the years that are very, very expensive, a fee, a very minute amount of the services being offered for that fee being attributal to the part that the planning department takes care of. but the premium to that little bit of the service that they provided for that application is vastly not in proportion to what they provided -- what the fee s. so, the fee for their percentage is quite large and the service that they would provide. i could give you examples of where you wanted to do something as simple as a bathroom remodel and you go in and get a permit for 2 or $3,000 for the permit and the planning department has to weigh in on it and they do a little part of it, but their fee would be a thousand

dollars. so, i got to try and get out of the bias mode and treat this objectively. i know supervisor chiu is pretty objective on stuff like this. that's why i wanted to know what his view on it was. that's why i'd like to hear from the planning department to see what else they would need to do. the idea they could check to see they're doing what they're supposed to be doing as far as the space requirement, that's a fair argument, i think, although, you know, they can also say that, right, on their application and it's going to be up to -- if a neighbor complains, the same result is going to happen. if the neighbor is going to complain regardless with or without this situation with the fee, d-b-i will end up going out there to say you are, or you're not, we have to do an inspection. i think that has to be the case. >> i certainly respect those comments, commissioner o'brien, and i think supervisor chiu would agree that fees

throughout the city are often too high and we should do more together to try to lower fees overall. in this case i think it's an issue of whether or not the health department can interpret the planning code and that's simply not what their role is. so, because this is a planning code provision and it's really about the use, the cotvctiontionvage food use that's in the location, planning is going to have a somewhat -- i think the one reason why -- once we heard these issues from the small business -- from the committee and went back to planning and sort of pushed and had the conversation a little further is because we see this as the absolute minimum involvement that planning could have. ~ cottage again, you could require conditional use for cottage food, for example, as anyone who has gone through the development process knows, conditional use application fee is significantly higher because there is a noticing provision and a public hearing at the commission, and that isn't a route we went on because we

want to do everything we can to encourage the cottage food operation. to that end, we think this is as narrowly tailored from the planning department as we can reasonably expect given that it's a planning code provision. if the commission would like, i can check in on planning department staff and see if they're nearby or what the -- obviously someone could have come up for them, but i can check and see if you would like to hear directly from them. but that's really where we are on it right now. >> commissioner white. >> yes, has there been any outreach in the home based food cottage community in regards to like la cocina or anybody like that? >> we haven't done outreach. we know there is excitement organizing around the state law and we are in touch with the sort of urban ag and sustainable food community in relation to urban ag because

there is another state law passed related to urban ag that supervisor chiu is going to propose local implementation of relatively soon. so, i believe this has come up in those conversations. but i think there is widespread excitement in general in san francisco about this sort of, this sort of cottage food operation. and obviously it's not a full blown business. i don't know, the dollar threshold you're allowed to make each year i believe they start at 35,000 and escalate to 50. so, we're not looking -- it's not the kind of operation -- it's not a full-on sort of -- an operation that's going to have a big impact in a neighborhood, for example, and that's really important because the whole reason that we restrict home base businesses in certain ways is to preserve the residential character of our residential neighborhoods. >> right. was there any negative -- >> i believe this will be discussed particularly at the planning commission, but i

believe that there was one neighborhood organization that weighed in with planning raising concerns about that exact point. that's why we wanted to narrowly tailor this to neighborhood before we broaden it to staff. >> commissioner white. >> i guess i'm curious on the process here. so, in order to be allowed to conduct such a business, you have to get a registration from -- >> tax and treasurer's office. >> tax and treasurer's office. will you, regardless of the fee will you have to get a permit from the planning department? >> at this point there isn't a -- i don't believe that there is a permit from the planning department -- [multiple voices] >> public health has a -- and i believe this might be how it works in general with d-b-i when the get to building permits and whatnot, too.

the permit issuing department in this case will be public health and in the case of building permits it's d-b-i, department of building inspection. but they do a referral to the planning department for planning code related issues. and the planning department staff will take a look at it and say, the drawing that you have, you know, shows the kitchen and the window you're going to sell it out of or what have you, and that matches the planning code. so, my understanding is that the planning department -- i can double-check this, but they're not issuing a permit, but they're referred by the permit issue lending department. >> again, if there was a permit, if there was a planning permit of some sort, the fee would be higher. >> the cfo permit comes from the health -- [multiple voices] >> the cottage food operation -- >> it's permitted through the department of public health. >> but they're not charging a fee? >> they are charging $100 for the type -- well, there's -- [multiple voices]

>> registration fee? >> it's $100 for type a and then it is -- i don't have this. [multiple voices] >> i think that's for -- >> and then for type b -- >> i can read all that. >> so -- >> but nowhere is the health department showing that they're charging any kind of fee but adhereses the permit or certificate of operation comes from them, no? ~ appears >> there is an application for the tier bs which the department of public health is charging, 332. this one because of its more involved, i think they do have to go out and do an inspection, where the type a, they are not going out and doing an inspection. so, generally it would be -- i think if there's issues with -- that might be called, it's going to be around the department of public health. for home-based businesses,

other home-based businesses, the requirement in the planning code is to use no more than a quarter of your home -- home-based businesses that are allowed, that does not require, you know, home based business to go and submit that to the planning department to ensure that their business is not utilizing more than a quarter of the square floor. >> this sounds like something your office is going to get a lot of questions about. the process that i go through to see -- >> the process is is that you get your business registration. you have to go to the -- department of public health to then fill out the appropriate forms and pay the appropriate fee whether you're a type a or a type b. >> okay. >> and then the department of public health right now is charging the zoning referral fee and that is where i think our discussion is, is it absolutely necessary since it's

zoned, you know, upon passage of this legislation, it's permitted in all areas of the city. and, so, we don't have the department of public -- planning here to say that what happens from department of public health to the -- what the planning department is doing at this particular time. with the zoning. >> not to belabor it, but it seems like the department of public health needs to make some type of determination, not the planning department. i don't understand why they're bouncing the fee to the planning department or they're not allowed to charge fees or something like that. it just doesn't seem -- i guess it tier b, but beyond why tier a someone goes to the department of health to get approved, and then they for some reason refer it to the planning department, really just is going to rubber stamp it. so, i just don't quite understand the process on why the fees are aligned the way they are. >> i am checking to see if planning department staff is

available. reiterate a little bit, i'll try to put it a different way. the planning department is going to be involved, you know, with almost any use because uses are governed by zoning. the planning code is where the zoning lives. planning department staff is going to be involved. i mean, i believe on almost any sort of business application or where it's a change of use. so, i think that this matches, for example, the restaurant example. and it could be at a much more robust level and we've tried to keep it at the most minimal involvement from planning which we believe as possible. i'm not sure what it would look like not to involve the planning department. that's the party haven't been able to see. >> i don't have a fundamental objection against fees where work is done. i just don't understand where the work is being done in this particular case. seems like someone is doing work and not getting paid and someone is not doing very much work and is getting paid. i don't understand it.

>> ms. riley. >> yes, you mentioned earlier record keeping. is the health department keeping record or the planning department keeping record? >> i would guess that they would both have some measure of record keeping. whether they could share that record keeping, i can ask the department. but i believe planning would have a record of anybody that, you know, any referral that would be tied to the address just like the department of public health would. i think it would be both. >> can the public health department share the information with the planning? >> that's exactly what's happening here. public health is sharing information with planning. planning is checking it to make sure it matches the planning code. that's why there's a fee. >> so, they will share it. >> they're sharing information. then should they not charge the fee? i mean -- it's provided by the health department. >> you could potentially roll the fee into one fee and planning could take a bit of the health department's fee. i think this is probably the way it works for most use

applications so, that's why they're proposing it in this case. fully understand the commission's desire, which we share to keep the barrier to cottage food operation as low as possible because it's something we all want to see happen. >> director dick-endrizzi. >> i'm sorry. >> commissioner o'brien. >> do we have any examples of cottage industries that have set up in the recent past, any examples we can look at to see how the process took place? [multiple voices] >> we can check. there could be -- to the extent that a cottage food operation is defined as an accessory use within a residential dwelling unit, it's not allowed until now. there may be some. there's some of everything, but i'm not a irway of it. they're not actually allowed right now. >> so, the answer is no.

the only thing i would say is -- so, you know, you have a primary residence today and the owner decides they want to use this building for a new use. and i think it's fair to say that that automatically triggers regulatory oversight that would give the planning department frankly -- a change of use in a building is always going to go to the planning department and i'm pretty sure they'll have some convincing arguments about things like if they're going to put a window in to sell stuff out of a window -- >> they can't do that. >> they can sell, but there are other restrictions. they can't do a window. i should have said that. >> it's written in the ordinance. >> i think we definitely need to hear from the planning department. i'd be surprised if they're not able to come up with some convincing arguments about whether to engage or do some

oversight on it because it is a change of use on the building. that does -- >> residential units and they're always going to be residential units. >> essentially additional use. >> you're right, it's kay change. so, it's kind of gray area. i really would love to hear from the planning department on it to see if they could justify it. ~ >> commissioner ortiz. >> frankly, i understand the planning part because it's a referral fee even though it's residential. maybe planning has something saying, no way, because this used to be a dreier cleaner in the bottom and it's toxic. i think that's where they're just vetting to make sure it's safe for a food product or something of that nature. could be in a residential building because they might have something, conditional use or change of use of that particular residence might have happened. >> i don't think that -- it's not really proscribed in the

planning code here. if a residence is above a dry cleaner, it wouldn't be permitted. right now it's being permitted in all zoning districts. so, and i think if this falls within that realm of the health concern realm, that might -- at this particular point might be more of a concern, you know, from the department of public health's concern. but we haven't defined -- it doesn't define right now any areas where -- if it's above a dry cleaner or not, it's permitted in all zoning areas. so, there are no qualifiers in terms of where it may or may not be permitted. so, i think at this point in terms of the zoning department, maybe the most is just saying it might be looking at a map.

are you familiar from the regulations when you're counseling if we tell individuals that they need to provide a map as part of their application process, do you recall at all? >> we don't get into that level of detail. we rely on the health department to inform the applicants of what the application requirements will be. >> right. so, anyway, so, i think that would be the most. otherwise it's just sort of documenting where there are cottage food businesses taking place in residential districts. again, in case a complaint does come up. but, you know, through technology, sharing data information should not be difficult, you know, quarterly, being able to sort of quarterly submit from the health department to the planning department, the applications that have been approved that they have permitted to operate. ~ can be done.

you know, we have data s.f. which is part of putting all of our data up, making it accessible. so, without kind of understanding what's -- unless the planning department is going and doing an inspection to ensure that, you know, there's no more than one-third -- one-third of the space is being used. so, i don't think that there is that level of detail right now. that would be more within the health department if there is concern about food being made in an area. >> if that's the case, you know, like we're all concerned what's the fee for, as you said, protection. protection of what, protection money, like i have to pay rent now? like, what is this? >> protection against the complaint. >> protection against the complaint. >> commissioner dwight. >> as i say again, i don't fundamentally object to fees. i think that what's at issue here is it's not clear to us -- it's not transparent what it is

for and who ought to be getting fees. so, i think before we approve of anything on behalf of small business, we need to understand who are the governing bodies and who is getting paid to do what. and it is not clear from this document who is getting paid to do what. i don't have any argument whatsoever with the notion that the planning department needs to be involved in some way because this involves the use of a building. i don't have any argument with the fact that the health department should be involved because it has to do with cooking of food that's going to go to third parties outside of the home. but before any of us can make any determination, it seems to me, there is some explanation due to not only us, but to supervisor chiu's office if they want to sponsor this, to understand what exactly are we approving. >> let me emphasize supervisor chiu and our office is comfortable planning has a role to play here similar to an application for a bar or

restaurant at a much smaller level. >> i agree they have a role to play. i don't understand -- i also agree the health department has a role to play. this seems arbitrary toe me and arbitrary to the commission as to who is getting paid to do what. in the absence of that, i don't see how we can approve or disapprove it. we do have letters from groups asking us to disapprove this, groups that represent small business interests. and, so, we're being asked outside of the chambers to deny this. and, so, and we're being asked by supervisors whose work we respect to approve it, but so now we're in a little bit of a conundrum. we don't think we have enough information. >> one additional information i was recalling from my conversation with planning, one thing planning will do is make sure the unit proposed for cottage food operator is a legal unit. so, that's just the kind of -- they'll probably have a checklist, make sure that's -- >> again -- >> again happy to hear from them. i