In 2017, about one in every eight storefronts here was empty, and more businesses seem to have vacated since then. The diner was first to go: in 2015 rent suddenly went up, the diner’s owner refused to pay, and Sparky’s was no more. Our usual ideas about gentrification suggest neighborhood standbys get replaced by fancy boutiques and brunch-centric eateries. Instead, after Sparky’s came … nothing. Elsewhere, too, long-term leases timed out, rents increased, and the old neighborhood hangouts disappeared. Aardvark Books, which stood on Church Street for nearly 40 years, until 2018, is now a hollow storefront.The culprit? If you guessed the insane public policy common to deep-blue bastions like San Francisco and Detroit, the Guardian assures you you are mistaken. It's actually capitalism's fault.
When gentrification isn't the worst threat
A Guardian article moans that San Francisco residents don't have gentrification to kick around any more. Instead they have something more like Detroit.
IMO, the economy is far more fragile than a booming stock market would imply. In our little town, many store fronts are empty, spaces that should be filled with startups- instead, they have been sitting vacant for years.
ReplyDeleteRegulatory burdens keep growing, and compliance costs keep rising. Comes a point where people just say, why bother? And under it all is the debt chasm, personal, local, state, nation, corporate, world- How high can the cards be stacked?
Well, and the startups don't need a storefront anymore. That's another issue. People start businesses out of their homes, and sell their products on Amazon and Etsy, or through word of mouth. They advertise on Youtube and Instagram, and aim at a nationwide or international market instead of Jim & Joanna from down the street. They dodge some of the sales taxes and compliance costs that way too.
ReplyDeleteIf you want gentrified storefronts, though, Raven is right: cut compliance and regulatory costs, and let the rent drift down to nearly nothing. Then you can afford to run a cat-themed used bookstore with eclectic coffee offerings on the side.
Abandoned stores, empty homes: why San Francisco's economic boom looks like a crisis.
ReplyDeleteThe article stated there were 38,000 empty houses in SF.
The Guardian article made mo mention of how difficult it is to build housing in SF. Practically any proposal will get NIMBY'd to death. Took five years to get approval to replace a laundromat with an apartment building.
ReplyDeleteGrim, that is a very good point about on line startups. avoiding sales tax though is ending- the states have this compact to tax online sales- just think- 50,000 different gov entities to collect and remit to. Probably have to add another person just to comply. not a productive worker, of course-another straw in the profit stream.
ReplyDelete"coyote blog" had an article some years ago about a guy who wanted to open a bagel shop in CA. Everyone said he had the best bagels they had ever tasted and to go for it. There was an empty building down the street, had been a restaurant or some such. So he started in with the permits and lease.
As memory serves, besides the 500 page CA food preparation regulations, there is also a 500 page code book for food facilities. The effort was honest, but the hole kept getting deeper. For example, he needed 9 (nine) separate sinks. For a bagel shop. Since the old restaurant only had five sinks, he then had to chop though the concrete floor to upgrade the drains, which then required another permit and fee for hookup- you get the drift- he had spent around 150k at that point, so he finally gave up.
There's a growing sector in food sales in Los Angeles- Sidewalk cafes- as in, just set up on the sidewalk with a pop-up tent, folding tables, some basic equipment, and start cooking. Some of these are quite popular, with long lines and constant business. Los Angeles stopped enforcing against these sidewalk vendors because it usually was illegal immigrants and they'd seize the equipment, but it was only worth a few hundred bucks, so the could afford to just buy a new set-up and keep going. Now they're everywhere. If I was a food truck or restaurant owner, I'd be livid. These street vendors dodge all of that nonsense, and somehow, no one gets a deadly case of food poisoning and people keep coming back. Libertarians should love it. I'm against it for the reason that there shouldn't be two sets of rules and the state picking winners and losers.
ReplyDeleteVDH has mentioned this many times- the rules are enforced against those who can pay, those who have easily reachable assets, those who have some investment in the system.
ReplyDeleteIf you don't have anything to lose, just go for it. No money in a stone.