AUSTIN, Texas—A new report, released today, highlights how policies in Austin have made it difficult for small businesses to get started. The report, conducted by the Institute for Justice (IJ) as part of its Cities Work campaign, includes an analysis of the regulatory environment, testimonials from local business owners, and seven policy recommendations to make it cheaper, faster and simpler to start a business.  

READ THE FULL REPORT HERE 

“Austin has rightly gained a reputation as a great place for entrepreneurs in the technology field, but for small business owners in other sectors, the reality is different,” said IJ City Policy Coordinator Ava Mouton-Johnston. “The regulatory environment for small businesses in Austin is among the worst we’ve studied in our Cities Work campaign, and we hope we can work collaboratively with city officials to improve it.”  

The report found that Austin restaurant and food truck owners must pay more fees, fill out more forms, interact with more government agencies, and attend more in-person activities to get started than owners in other cities studied. This makes the total permit and license related cost to start a restaurant in Austin $8,962, compared to an average of $5,358 in other cities studied. That’s more than three times the cost of starting a restaurant in San Antonio, for example, which comes in at $2,477. 

One business owner, quoted in the Cities Work report, said navigating all these steps, “Takes years off your life. You try to tackle one thing at a time. You get through one hurdle and try to find what the next one is.” 

The seven policy recommendations made in the report include:  

• Reducing license and permit fees; 

• Encouraging low-overhead form of entrepreneurship; 

• Supporting the development of commercial spaces designed for small businesses; 

• Improving the efficiency and transparency of inspections and applications;  

• Creating a true one-stop shop permit portal for entrepreneurs; 

• Increasing fee transparency to make entrepreneurs’ regulatory budgets more realistic; 

• And, removing unnecessary steps that can lead to delays. 

The city made some promising reforms recently, including allowing childcare businesses to operate in residential zones by right; providing exemptions to mandatory grease trap requirements for certain cafes and food establishments; creating an on-site inspection option for food trucks, rather than requiring food trucks to be brought to the respective city offices; and passing a resolution to simplify the building permitting process for small businesses.  

“The city’s recent reforms are a great step in the right direction, and we hope they can build off that momentum by adopting even more reforms that empower small businesses,” said IJ Director of Activism Jennifer McDonald.  

“Cities Work” is an initiative of IJ, which partners with city leaders across the country to make it cheaper, faster, and simpler to start businesses by identifying and rectifying regulatory barriers to entrepreneurship.