Hey, Chicago’s next mayor: Cut the red tape and help all entrepreneurs thrive
City leaders should open the floodgates of opportunity for small businesses in Chicago.
Mayor Rahm Emanuel recently pushed the idea of creating “right to thrive zones” to help economically depressed neighborhoods. But broader regulatory reform is needed across all of Chicago to foster the spirit of entrepreneurship that drives great cities. Whoever is mayor one month from now should push wide-ranging reforms to address the rules and red tape that trip up entrepreneurs in all neighborhoods.
Small businesses can bring a steady stream of opportunities into Chicago’s neighborhoods, infusing them with new flavors and innovative ideas, while making city streets safer and local jobs more plentiful. But Chicago’s notoriously complicated regulations create bottlenecks, reducing that stream to a trickle.
City leaders should open the floodgates of opportunity. The following reforms will help make that happen:
Instill in City Hall an attitude that welcomes all businesses, and task regulators with supporting entrepreneurs. New business models can offer creative breakthroughs for Chicago neighborhoods, but they often are greeted with sighs and scowls when city workers do not know what boxes to check on regulatory forms.
Create easy-to-find checklists for license and permit applications. Entrepreneurs often have to spend hours waiting in City Hall only to be told they do not have all the paperwork they need to receive a license or permit.
Treat minor regulatory infractions with a friendly warning rather than a fine. Today, a first-time offense means a fine that runs in the hundreds of dollars and often an administrative hearing that requires expensive legal support.
Reduce the administrative hearings that require businesses to spend money on legal representation. Chicago has an online system to deal with minor traffic violations like red-light tickets but none for minor business violations. When business owners get a ticket, they must appear before the Department of Administrative Hearings and then sometimes appear again before the Department of Business Affairs, even when the ticket has been dismissed.
The city code is rife with ordinances that make small-budget entrepreneurship difficult, if not impossible. But these ideas would help startups in less affluent neighborhoods grow:
Simplify signage and awning rules. Chicago should have a one-step online application for sign and awning permits. Today, the entire City Council votes on each signage request and on every awning that hangs over the public way. Furthermore, a bonded sign-erector is required to put up every sign.
Foster home businesses. Don’t outlaw the next Jeff Bezos. Let home businesses operate in garages so long as they don’t disturb the neighbors or impact the environment. Repeal the prohibition against home businesses hiring more than one employee, especially for remote employees. And end the restriction on selling homemade products outside of the home.
Make it quick to start up. It takes 32 days to start a professional-services business in Chicago. In Phoenix, an online system gets businesses through permitting and licensing in one day.
Legalize food carts like those operating in Pilsen and Little Village, and open up cottage food production to the full extent allowed by state law. Let the next Vosges Chocolates come out of a Bucktown home and the next Shake Shack start as a Pilsen food cart.
Neither Emanuel nor his opponent, Jesus “Chuy” Garcia, created Chicago’s anti-entrepreneur culture, but both should fight to fix it. Let’s make it easier for Chicago to live up to its nickname, “the city that works.”
This article was co-authored by Beth Kregor, director of the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School, and Elliot Richardson, founder and CEO of the Small Business Advocacy Council in Chicago.
Image credit: Heather Phillips