Santa Monica is rolling back its long-standing ban on fast-food chains as the city grapples with fiscal distress, declining tourism, and rising vacancy rates. The move is part of a broader strategy to revitalize the once-vibrant coastal enclave, which has been particularly hard-hit by the COVID-19 pandemic, homelessness, and drug abuse.
The city's Third Street Promenade has already seen the arrival of chains like Raising Cane's, and Taco Bell has announced plans for a new location. These developments signal a significant shift from the city's previous policy, which began restricting fast-food restaurants in 1988 and by 2018 barred chains with over 100 locations, a threshold that was further tightened to 150 locations in 2021.
By August 2025, these restrictions were permanently eliminated. City officials cited the need for over $60 million to maintain essential services as a primary driver for the policy change. Councilmember Ellis Raskin acknowledged the importance of flexibility during the economic recovery, stating, "I think that in this time of economic recovery, it's important to have that flexibility."
Economic Downturn and Social Challenges
The decision to lift the ban comes after years of struggle for Santa Monica. The pandemic exacerbated existing issues, including a significant increase in homelessness and a sharp decline in foot traffic and tourism. Retail analysts note that changing shopping habits, the rise of online retail, and remote work have disproportionately affected urban shopping districts.
Visitor numbers to the downtown area dropped significantly during COVID-19 and have been slow to recover. In 2024, an estimated 4.2 million visitors traveled to Santa Monica, a nine percent decrease from the previous year. This decline has contributed to a vacancy rate of approximately 20 percent in the downtown area, despite some reported improvements in foot traffic.
Beyond economic factors, public safety and quality of life concerns have also impacted the city's appeal. Residents and business owners have pointed to issues such as visible homelessness, public drug use, and a general sense of decline along the beachfront, which has been nicknamed 'Sleeping Bag Beach.' Incidents of vandalism and unprovoked attacks have further contributed to a feeling of insecurity, deterring both residents and tourists.
"The open consumption of drugs in public is absurd," said Michael Mandel, co-owner of Pier Pizza and Subs. "You clean that up, you know, you start to see the streets get cleaned up again."
Council candidate Derrick Townsend described the homeless situation as "a degradation of the fabric of our society," detailing incidents of public defecation on the beach and increased crime that he believes are harming the local economy and residents' sense of safety. Some critics also point to harm reduction policies, such as needle distribution programs, as contributing to the problem rather than alleviating it.
Efforts Towards Revitalization
In addition to reversing the fast-food ban, Santa Monica is implementing a range of measures to foster economic recovery and improve the city's atmosphere. These efforts include increased police presence, relocating the city's homeless shelter away from the Promenade, reducing outdoor dining fees, and using AI software to expedite building and business permits.
City leaders are also planning upgrades, including the creation of designated 'entertainment zones' that would permit open alcohol containers on weekends, as part of a broader plan to create a more vibrant environment, particularly in anticipation of the 2028 Olympics.
"The real way to get back to prosperity is we need the local economy to thrive again," City Manager Oliver Chi stated. "What we can do is create an environment in the city that’s investable."
Despite the challenges, officials remain optimistic. Chi expressed a sentiment shared by many, suggesting that "there was a real sense, I think, a year ago that maybe Santa Monica's best days were behind it...it can still be one of the coolest places on the planet."