Elite California city set for mass illegal street vendor expansion as judge issues stunning verdict

San Diego seems to have no solution to its illegal street vendor problem and it’s only getting worse in many areas including the popular Balboa Park and Gaslamp Quarter.

Local business leaders are frustrated following the January 2026 California appeals court ruling, which forced the city officials to entirely halt the crackdown on street vendors. 

“It’s a disaster,” Denny Knox, executive director of the Ocean Beach Main Street Association, told the San Diego Union Tribune last week.

An increasing number of street vendors are exploiting the court’s ruling and many don’t even bother to get a permit.

Executive Director of Gaslamp Quarter Association, Michael Trimble, said that street vendors block the sidewalks, making it difficult for the businesses in the area to function. 

“The lack of action has also led to an escalation of activity, including new vendors setting up tents and selling goods without permits, health approvals or accountability,” said Trimble, the Union-Tribune reports.

Organized groups of hot dog vendors have returned to the Gaslamp Quarter—bringing associated hazards like open fires, blocked walkways, and the dumping of grease into storm drains.

“It’s so much of a slap in the face to merchants that have done things the legal way, the right way,” said Ruth-Ann Thorn, owner of Native Star boutique and Exclusive Collections Gallery in the Gaslamp Quarter, reports inewsource.

Officers can no longer impound vending carts and law enforcement in Ballpark District is restricted, SDPD’s Ashley Nicholes said in a statement, according to the Union-Tribune.

“Recent court rulings involving the city’s street vending ordinance have limited what police officers can do to enforce street vending laws,” Nicholes said.

San Diego’s tug-of-war with street vendors started in 2018 when the state law decriminalized aspects of street vending. The task to draft a vendor law fell into the laps of then-Mayor Kevin Faulconer in 2019, then passed on to Mayor Todd Gloria in 2021 and then Councilmember Jennifer Campbell.

The law, approved by the City Council in May 2022, banned vendors in Balboa Park, Little Italy, Ocean Beach and some beach areas during summer months. But, the merchants kept complaining about the lack of law enforcement and that led to the revision of the law in 2024.

The revised law made it easier for officials to impound vendors’ carts, limited free-speech protections, which didn’t include yoga classes on the beach and selling food.

After an immediate backlash, a federal appeals court ruling in June 2025 said the city’s ban on beach yoga classes is unconstitutional as they are protected under the First Amendment.

A California appeals court in the case of Imhotep Mustaqeem earlier this year ruled that San Diego’s revised 2024 street vendor law violated state law by establishing “overly restrictive” geographic no-vendor zones and restricted operating hours.

Imhotep Mustaqeem, a licensed vendor who had sold snacks outside Petco Park since 2009, sued the city after police impounded his cart under San Diego’s revised 2024 ordinance. While a lower court initially ruled against him, the Fourth District Court of Appeal ultimately vindicated Mustaqeem and quashed the 2024 street vendor law.