.How Santa Cruz County’s Underground Chefs Hope to Go Legit

From sidewalk vendors to home cookers to kitchen incubators, a culinary revolution is coming together

Daniel Aguirre is a jack-of-all trades type of entrepreneur. He can sense the next big thing, and has an eye for holes in the local economic market that need to be filled. He once owned a magic store in Capitola, for a time he sold the popular ’90s Betty Spaghetty dolls and he has dabbled in the customized shirts market. He isn’t afraid to switch industries when he spots an upward trend. 

One hot midsummer day in 2014, Aguirre was selling customized t-shirts at a local softball game. After it ended, players and parents swarmed his stand, mouths dry and sweat glistening on foreheads, asking if he had any drinks or food for sale. At the time, he only had stacks of t-shirts, but their questions prompted a bigger one for him: was it time to make a move? 

Aguirre started looking into selling food. Selling from a cart seemed like the easiest, most straightforward way to do that—thanks to his carpentry skills, he figured he could make his own food cart for around $12,000, and he already had an idea for what he would sell.
“Hot dogs seemed fun, and they’re encased, so I thought it would be easier than anything with raw meat. It seemed simple,” Anguirre says. 

But the path to get started was anything but simple. 

When it comes to sidewalk vending, there’s a myriad of confusing rules and permits that make it hard—not to mention expensive—for prospective entrepreneurs to legally sell their food. Aguirre quickly realized he couldn’t afford the standard county and city permitting process, but he didn’t give up. Some friends in the restaurant industry let him use their kitchen for prep, and he was able to find a business that allows him to sell his hot dogs on private property—a loophole that he says allows him to circumvent most of the county and city permits he would otherwise need. For the permits he did need, he had some start-up funds. 

secure document shredding

That’s how Aguirre fast-tracked his way to owning his own food cart, and became the proud owner of Happy Dog Hot Dog

Not everyone, of course, has the connections or the resources to bypass the roadblocks that Aguirre encountered, and a growing number of legislative measures are trying to make it quicker and easier for new food vendors to go legit outside of the traditional restaurant model. 

Cesar Ruiz, facility manager at the incubator kitchen in Watsonville, helps new business owners—primarily low-income and immigrant workers—get their permits.

In the pandemic, nearly a third of restaurants throughout California were forced to shutter. Rent in Santa Cruz for retail has skyrocketed, making it even harder for people who want to make and sell food to pursue the traditional storefront trajectory. That’s created a huge new influx of food trucks and sidewalk vendors like Aguirre.

At the same time, illegal food sales are thriving. With restaurants shuttered during the start of the pandemic, Facebook and Instagram became a vessel for people who wanted to sell homemade food, according to research done by the COOK Alliance. Under-the-table sidewalk vending has always existed, but even with bills in recent years that have aimed to make it easier for people to sell legally, there continue to be hurdles that are unrealistic for lower-income vendors to overcome. 

Everyone I spoke with who sells, or once sold, food illegally would rather operate a legitimate business. There are currently two bills being discussed at county and state legislative levels to help them do that—one that would streamline the permitting process for sidewalk vendors, and another that would create a permitting process for home cooking. But will these bills actually help, and why are they so hard to pass?    

Well-Intended, Poorly Executed 

In 2018, Gov. Jerry Brown signed into law a bill that decriminalized sidewalk vending and that activists hoped would make it easier for food vendors to sell food legally. Even though the bill prohibited cities and counties from banning sidewalk vendors, it did give local leaders a lot of authority over how to regulate them. Street-food sellers, taco fans and activists alike were excited about the bill’s potential to reshape the illegal market. 

But four years later, many say the bill didn’t deliver on its promise.

Critics of the bill say that it was made with food trucks in mind. There are requirements that make it nearly impossible for sidewalk cart vendors to get a health code permit, writes Estefanía López Pérez in an email to GT. Perez is the Senior Policy Associate at Inclusive Action for the City, a nonprofit that advocates for marginalized communities and small businesses. She is also a proponent of Senate Bill 972, which aims to eliminate some of the requirements that small carts have a hard time complying with: things like requiring street carts to have four sink compartments and multiple water tanks for washing cookware and hands. 

“One of the toughest regulations was that they wanted me to have a three-bay sink built onto the unit onto my cart,” Aguirre says. “But then they said you can get a commissary and do everything there at the commissary. And that was a whole other challenge.” 

Current legislation requires food vendors to contract with a commissary, or a restaurant, who will give vendors access to their facilities. This is because restaurants are up to health code, and vendors need a health code approved kitchen space when cleaning and prepping food. 

“It’s a weird obligation, because these restaurants can see us [street food vendors] as competitors.” says Aguirre. He says when he was new to the food cart business, he had asked a fellow vendor what commissary they used. “I’d rather not say” was the response, and Aguirre got the sense that no other information would be forthcoming.

“He probably didn’t want any competition,” Aguirre says. “I get it. I got lucky, I have a lot of friends in the restaurant business, so I use [one of] my friend’s facilities.” 

The new bill would provide an alternative to using commissary kitchens, too. It provides a pathway for vendors to prep food—things like slicing fruit or vegetables—on site, which is currently prohibited. It also would tweak the bill that permits home cooking, to allow sidewalk vendors the option to also use home kitchens. 

“Cooking at home would be huge,” Aguirre says. “It would make such a difference. All I use the commissary for is prepping my onions and washing pans. And when was the last time you got sick from cooking at home? It would just make it so much easier for people to start their businesses, rather than trying to go to a competitor who might not want you in his town. ”

No Place Like Home  

When Teresa Olson got Covid-19 in 2021, her health was hit hard. She was hospitalized, and she even had to write her will—which, at 62, she had hoped to have a few more years before confronting. 

Months later, she’s one of the unlucky and uncounted people who has long Covid. 

“I still get fatigued very easily, and the brain fog, I lose my balance easily,” Olson says. After getting her booster shot, the brain fog and balance issues seemed to lessen, but the fatigue never really disappeared. 

For these and other health-related reasons, Olson says a regular 9-to-5 job is impossible for her. 

“On my feet, or being on all day, it just doesn’t match my health needs,” says Olson. “I feel much more comfortable in my own home, being my own boss, doing what I love to do.” 

Her great love, she tells me, is cooking. Her home is cluttered with cookbooks: in her spare time, she will rummage through them, or scroll online looking for new ways to cook classic recipes. She doesn’t have one type of cuisine that she prefers; instead, she likes the challenge of cooking new things and experimenting with spices and flavors. 

One day, Olson’s friend asked her to make dinner after a surgery. Because of the nature of the surgery, Teresa’s friend had dietary restrictions that had to be adhered to, so Olson had to get creative: most of the spices had to be replaced with milder seasonings, so Olson spent all day tweaking her recipe to try and make a bland meal colorful. At dinner, her friend was impressed. You should sell this, Olson’s friend said.  

This time, Olson didn’t brush off the idea like she had before. Maybe, she thought, this could fill the widening gap between her income and expenses. 

That’s when Olson stumbled upon the micro-enterprise home kitchens (MEHKO) movement, which allows people around California to sell home-cooked meals.   

Assembly Bill 626 authorizes the sale of home-cooked meals, and provides a permitting system for such businesses. It was signed into law in California in 2018, and went into effect in 2019. But you might not have heard of it, because individual counties can choose whether or not to opt in—Santa Cruz County has chosen not to, for now. 

Importantly, this bill is different from the Cottage Food Operation legislation, in that the food that people can prepare and sell isn’t restricted to the specific items listed in the Cottage Food bill. There’s a list of requirements and training that people wishing to sell from their home must adhere to, in addition to being permitted by local health departments, but after meeting those, participants can sell and serve home-cooked meals. 

“The pandemic shined an incredible spotlight upon this home cooking movement,” says Roya Bagheri, Executive Director of the COOK Alliance, the organization that authored the home cooking bill. Bagheri says MEHKO served as a saving grace for food-service workers who were laid off, as well as former restaurant owners and people in the food industry who needed to work from home. 

Since 2019, nine counties have opted in to the homecooking bill. Santa Clara County and San Mateo County have both recently approved the bill for their residents. According to data collected from Riverside, the first county to opt into using MEHKOs, 85% of the people who use MEHKOs are women, 30% are first-generation immigrants, 48% are minorities and 35% make household incomes of less than $45,000 per year. 

“[The COOK Alliance] estimates that thousands of Californians already sell food from home and informally because of the high barriers to entry in the commercial food industry,” says Bagheri. “By creating a permitting system, providing education and helpful safety guidelines for those that otherwise have no formal training, getting the health permit to get inspected, it makes things actually a lot safer for communities.” 

Olson, along with the help of Bagheri and other local organizers, is making a push to bring MEHKOs to Santa Cruz County. But the County is skeptical that the health department will be able to adequately perform inspections that ensure the home kitchens are safe and sanitary.  
“We aren’t a no, or completely closed off,” says Kieran Kelly, the Deputy Chief of Staff for Santa Cruz County Supervisor Zach Friend. “Once we give the county’s stamp of approval that it’s safe, we need to be confident that it is. It’s one thing when someone knowingly takes the risk of eating at an underground place, but once the county gives the inspection licensing, it’s on us.” 

This is one of the reasons why proponents of MEHKOs are hesitant about SB 972, the bill that proposes to fold in sidewalk vendors to the types of food businesses that can use home kitchens. There’s a belief, MEHKOs advocates say, that adding another group of businesses will make some counties even more hesitant to opt in to AB 626. 

Across the state, in counties that have implemented MEHKOs, there have been no food-safety-related complaints. Still, Marilyn C. Underwood, Director of Environmental Health for the county, writes that even in commercial kitchens, keeping food at the proper temperature can be problematic, and that in good conscience she can’t support MEHKOs. She writes that the El Pajaro CDC Commercial Kitchen Incubator, the shared kitchen in Watsonville, serves as an alternative to home-kitchens, and that people can look there if they’re interested in incubating their business. 

A Solution—For Some

Without the El Pajaro CDC Commercial Kitchen Incubator, Ever Deras would likely never have had a legal business. 

In 2015, Deras, who was at the time working as a manager at McDonalds, was told his son had been diagnosed with cancer. Because of trips to Stanford hospital, it was hard for Deras to hold down a traditional job, so he fell back on something more flexible: selling pupusas to friends and families. 

At the time, he and his wife would spend hours preparing pupusas, then load up their truck and sell them at local soccer games. He used his mother’s recipe, which she used to make pupusas with him at his home in El Salvador. 

Deras had thought about going legitimate, but didn’t have the money to do it. That was until his older brother came to him with a proposal. 

“He had saved money for 20 years,” Deras says. “And he saw our situation. So he said, ‘Let’s use this money to open a business.’”

That was the start of Dos Hermanos Pupuseria

Like Oslon and Aguirre, Deras now faced permitting hurdles from the cities of Santa Cruz and Watsonville, and the county’s health department. Both cities have different requirements for food trucks and require separate permits. For the health department, he had to get a background check, be fingerprinted and buy National Sanitation Foundation approved pots and pans, all of which are costly. Including the food truck, he spent around $80,000 to get the business off the ground. 

The biggest hurdle was finding a commissary kitchen. That’s when Deras found out about the incubator kitchen in Watsonville. 

Cesario Ruiz, who is the Facility Manager at the incubator kitchen, hears a lot of stories like this. His job is to help new business owners, primarily low-income and immigrant workers, understand and complete their permits. Currently, the kitchen has 33 different businesses using the facilities, and three more in the pipeline. A majority of people using the kitchen say they would be unable to get clearance from the health department without access to the incubator. 

“[The permitting process] is so complicated,” says Ruiz. “Do you know the amount of regulations that exist, even [for] pickling? It’s ridiculous. It’s so extensive … they make it almost impossible for small companies to start somewhere. These regulations are designed for large companies, managing millions of dollars of sales a year. Well, not everybody has that amount of money.” 

Ruiz thinks the solution is more specialized regulation, intended for smaller scale operations. He sees the new sidewalk vending and home cooking bills as steps in that direction. The incubator kitchen is an amazing operation for people, but it isn’t big enough to serve the whole county. That’s partly why Ruiz thinks that everyone in the industry should support easing the regulations to permitting—even if that means expanding the ways that food is cooked and sold.  

“There is a phrase in Spanish: el sol salud para todos,” says Ruiz. “You know, the sun comes out every morning for everybody. There is opportunity for everybody.”  

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