Philly needs to fix its controversial ‘streetery’ outdoor dining program, city controller says

Philadelphia’s system for approving restaurant outdoor dining licenses is so plagued with hurdles, fees, and red tape that it could be costing money to the city and businesses alike, according to a new report from the city controller’s office.

City Controller Christy Brady conducted a review of the program in response to ongoing concerns and frustration from restaurant owners, and found that the program is far more complicated and less equitable than similar programs nationwide.

“The current outdoor dining licensing process in Philadelphia is characterized by complexity and high cost, which pose significant barriers for businesses seeking to utilize outdoor dining opportunities,” Brady wrote in the report, released Wednesday.

Five years ago, Philadelphia’s outdoor dining scene was limited to sidewalk cafe tables. But when the pandemic hit, the city rolled back the red tape on all outdoor dining structures, giving birth to an al fresco dining renaissance.

More than 860 establishments took over parking spaces and opened up curbside patios, affectionately known as “streeteries,” to help survive the lockdown era. In January 2023, the city implemented a new regulatory system to rein in the streetery free-for-all, following complaints about dangerous and unseemly designs. The new system imposed strict architectural requirements, review processes, and four-figure annual licensing fees.

The end result: Few restaurants bothered to apply, and even fewer have been approved.

Only 26 restaurants received streetery licenses out of 120 applicants to date, Streets Commissioner Kristin Del Rossi said Tuesday. Some restaurants spent tens of thousands of dollars only to dismantle their pandemic-era structures once the city’s system went live.

The problems begin with the city’s two-part application. The controller found that both the streeteries and sidewalk cafe licenses require separate approvals from two agencies — the Streets Department and the Department of Licenses and Inspections — a feature that she argued should be streamlined into a single process.

Then, there are the building requirements — a range of specifications based on the type of structure being built that proved prohibitive for many restaurants.

On top of that, restaurants with streeteries are required to pay a $1,750 annual license fee, which is far higher than other cities’, such as Pittsburgh’s $150 fee.

With the added cost of hiring licensed architects, construction, insurance premiums, and renewal fees, the streetery program has become financially inaccessible for many small businesses, the report found.

“The updated rules imposed strict limitations on space and location, enforced rigorous infrastructure and safety requirements, and have led to a notably low application rate for renewing outdoor dining setups,” the report said.

Some restaurant owners who braved the new system have found themselves in a bureaucratic nightmare. Pumpkin BYOB spent $50,000 and 16 months trying to bring its beloved streetery up to code on South Street, only to almost meet its demise due to scheduled road repaving. (The 20-year-old establishment announced its closure last month, citing a range of issues.)

Brady’s office recommended a few remedies: Simplify the application process, lower the annual fees, and clarify the building requirements.

The new mayoral administration, which has restructured L&I, should also analyze how outdoor dining can boost both local business income and tax revenue, Brady’s report suggested.

The report pointed to lessons that can be gleaned from half a dozen other cities. Pittsburgh, for example, streamlined its application process to a singular application and opened outdoor dining to a range of businesses, not just restaurants.

While Philadelphia officials have argued that the city’s steep application fee is necessary to offset program management costs, Baltimore’s program, by contrast, bases the license fee on the economic conditions in the restaurant’s neighborhood, which the controller called “a nuanced approach” to balancing accessibility and revenue generation.

Brady also addressed the elephant in the room: parking.

For years, the Philadelphia streetery debate has swirled around what some viewed as an existential threat to parking — the fear that curbside dining rooms would permanently cut into the city’s on-street parking supply.

Brady argued that the city could offset some of the pain by eliminating metered parking spaces.

The controller said that removing 250 metered parking spaces would cost the Philadelphia Parking Authority about $600,000 out of its $37.2 million in annual metered parking revenue. But the city would see neutral impact with increased tax from restaurant sales, the report argued, while also producing an additional $14 million for local restaurants.

“The revenue difference is almost neutral by converting metered parking spots to streetery dining spaces,” the report said.