Let Them Cook!
How Cities Stifle Small Food Businesses, and Ways to Fix It.
Across U.S. cities, the restaurant landscape is splitting. Fast-casual chains rely on speed and affordability, while fine dining serves a narrower, higher-paying audience. In between, independent neighborhood restaurants are being squeezed by rising costs, thin margins, and local rules stacked against them.
It was not always this way. Mid-20th-century cities supported a mix of small proprietors, with mom-and-pop eateries anchoring working-class districts. Street vendors have been part of American cities since colonial times. From the 1970s onward, zoning codes tightened, health regulations expanded, and commercial rents climbed. As property values rose, regulations grew more complex. Larger chains with more capital were often the only ones able to keep up.
Where policy falls short, entrepreneurs adapt. In Los Angeles, many mobile vendors operate outside formal systems. Portland’s food-cart pods began as makeshift clusters on vacant lots. In each case, food culture endures despite the rules.
Recipe for Disaster
Independent food businesses face barriers on three fronts: high costs of space, one-size-fits-all regulations, and limited access to credit. These pressures tilt the market to favor larger operators.
Physical. Commercial property prices push small operators out of neighborhood locations. Parking mandates shift the cost of parking spaces from drivers to building developers. In many markets, food trucks are banned from most curbside locations and temporary kitchen permits can take months to process.
Regulatory. Compliance rules often treat small and large operators the same. California's cottage food law, codified in Health and Safety Code Section 113758, caps home-based sales at $75,000 annually for Class A operators or $150,000 for Class B operators, pushing operators to jump directly to commercial standards that cost hundreds of thousands to meet.
Financial. Conventional credit markets rarely serve independent food businesses. Starting a business often requires $20,000-$50,000 for equipment and initial inventory, yet banks avoid these smaller loans because they yield little profit and carry risk. Many entrepreneurs turn instead to personal credit at high interest rates, an ill-suited option for businesses with narrow margins.
Fresh Approaches
Singapore's hawker centers represent perhaps the world's most successful model of government-supported food entrepreneurship. The government provides subsidized stall spaces and maintains streamlined health inspections. Singapore operates over 100 hawker centers with thousands of licensed stalls, creating a direct pipeline from street food to restaurant ownership. Yet the subsidized rents that make hawker centers viable require sustained political commitment and significant public investment, something harder to maintain in American municipal politics.
Portland's food cart transformation demonstrates reform in practice. The city let vendors cluster on vacant lots with basic utilities and low permitting. The result is a network of over 500 food carts across dozens of pods, with many operators graduating to brick-and-mortar restaurants. Property owners earn interim revenue from otherwise vacant parcels. Austin streamlined its process too, letting inspectors visit trucks on-site rather than forcing vendors to shut down and relocate for health inspections.
Policy Recipe Book
Cities serious about supporting food entrepreneurs should focus their efforts on four proven policy levers. Done right, these changes can restore thriving neighborhood food scenes while preserving the food safety standards communities depend on.
Graduated permitting. Cities need to replace binary compliance with stepped progression from home production to full restaurants. This approach nurtures growing businesses while maintaining appropriate safety standards at each level.
California's cottage food law illustrates both the potential and the gaps. Under Health and Safety Code Section 113758, home producers can sell directly to consumers up to $75,000 annually (Class A) or $150,000 (Class B). The next tier jumps to full commercial kitchen requirements, creating a huge obstacle for growing businesses.
A stronger system would create a clearer path for growth. The first tier could cover home kitchens, with room for more products and online sales up to $150,000. The second tier might allow for mobile setups such as food trucks and farmers market stalls. The third tier could support shared commercial kitchens, with inspections focused squarely on food safety. The final tier would remain full restaurants, held to the standards that already govern permanent establishments.
Zoning reform. Cities should eliminate parking mandates for restaurants and create designated food vendor zones near transit and in commercial districts. Temporary use permits for vacant land can activate dead zones while generating property owner revenue.
Shared kitchen infrastructure. Publicly supported commercial kitchens can slash entry barriers by pooling fixed costs across multiple users. These facilities allow entrepreneurs to access professional-grade equipment and maintain health department compliance without the capital investment of dedicated facilities.
Targeted micro-lending. Cities should partner with community development financial institutions to offer $5,000-$30,000 loans designed for food entrepreneurs, with affordable rates and payment schedules matching seasonal revenue patterns. These programs require subsidies to offset higher default rates but can be a valuable tool to build local wealth.
Managing the Mess
Reforming food policy means grappling with the very concerns that led to regulation in the first place. Food safety failures can be devastating for public health, and simplifying the rules does not eliminate the need for oversight. Cities taking this path should expect to expand inspection capacity accordingly. Vendors need paths to compliance that do not drive them out of business during the transition. Cities should measure results through food safety records, economic impacts, and vendor success.
Last Call for Orders
Reducing barriers works when done thoughtfully. Portland's cart pods converted vacant lots into thriving commercial nodes. Singapore operates thousands of licensed hawker stalls while maintaining food safety. But these successes required sustained investment.
Cities face a choice: continue treating food entrepreneurship as a regulatory problem to be managed, or recognize it as a civic and economic necessity. The question is whether cities are ready to build systems that support them. Food cultures flourishes where small-scale entrepreneurship is possible, but only when cities balance opportunity with responsibility.
