The process for Philadelphia restaurants to set up so-called “streetery” is unnecessarily expensive, time-consuming and complex, leading many restaurants to forgo the outdoor dining structures that have become popular during the COVID-19 pandemic, according to a report released earlier this week by the City Controller’s office.

The report, released Wednesday, takes a closer look at the city’s approval process for a streetery. While critics argue that streeterys limit sidewalk space and reduce parking revenue, City Treasurer Christy Brady said the tax revenue they would generate would outweigh the lost parking revenue.

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“I think it’s good for the town, I think it’s good economically for the local businesses, not just for the restaurant but for the businesses surrounding the restaurants,” Brady said. “We want to attract people to town and I think it creates a vibrant environment that attracts people and makes them want to come here.”

The report examined permit applications dating from 2013 to 2014. Before the pandemic, about 250 restaurants had a sidewalk cafe license, Brady said. At the height of the pandemic, when the city loosened restrictions on outdoor dining, there were more than 800 sidewalk cafes. But the city implemented a new permitting process in January 2023, and now there are only 26 approved sidewalk cafes.

Brady’s report criticized the city’s permitting process for restaurants as being too costly. The $1,750 annual license fee is significantly higher than Pittsburgh’s $150 annual fee. Brady also found the permitting process to be too lengthy and that strict regulations on size, location and other compliance measures created too much bureaucracy.

All of this means that restaurants are struggling to acquire the space they need and, once they have it, to maintain it profitably, the report said.

“The mayor said when she took office she wanted to keep the city open for business and make it easier to apply for a permit, and I agree,” Brady said. “If there’s a way to apply for a permit and the process is completed with that application without the restaurant owner having to go to this department for that permit and to that department for that permit — streamlining that process is going to make it a lot better for the business owner, especially because some of them are local and small business owners.”

To make streeteries more attractive to restaurants, Brady’s report recommends streamlining the application process by reducing the number of permits required from different departments. She said application and renewal fees should be reduced; she suggested creating a multi-year permit option like New York City has.

The report also recommended reducing insurance requirements, clarifying size and location requirements, and building better relationships between restaurant owners and the city. It called for gathering neighborhood input by engaging community groups.

Some progress has been made. A new law allows street eateries to extend beyond a restaurant’s property, provided neighboring establishments give their consent, and “navigators” have been created to guide restaurant owners through the permitting and licensing process. The law was proposed by Councilmember Rue Landau in April and signed by Mayor Cherelle Parker in June.

“The Controller’s report reflects what we’re hearing from businesses that they are unhappy with the current outdoor dining permitting process, and rightly so,” Landau said in an email. “My recent bill allows restaurants to extend their street-level establishments beyond their boundaries onto neighboring property with the consent of the neighboring owner. This is just our first step in solving a larger problem – we want to make it easier to expand outdoor dining opportunities in our city. We need a streamlined application and clear communication about the process.”