The City Council passed a bill Wednesday that cuts the maximum fines for street vendors from $1,000 to $500.
The legislation also clarifies where vendors will not be allowed to set up, such as in a taxi stand or within 20 feet of a building entrance.
"We are responding, in a balanced way, to hard-working people saying, 'Make the rules clearer because we want to follow them, but don't make the fines so high that they put us out of business,'" said City Council Speaker Christine Quinn.
Critics, like the mayor, worry that the new legislation will make vendors less likely to follow the rules.
The mayor has promised to veto the bill.
Supporters point to an addition to the bill that requires officers to record the permit number of a vehicle or cart when issuing violations, which means the rule-breakers would be flagged when they try to get their permits renewed.