There’s plenty of talk about SF’s moribund downtown forcing retailers, from national chains to mom and pops, to close up shop. But for all kinds of reasons, storefronts in the city’s neighborhoods are often shuttered, too — in some cases for decades.
Retail vacancies were a problem before the pandemic. Sup. Hillary Ronen, whose district includes the Mission, said this in February 2020: “Right now, hundreds of empty storefronts line our commercial corridors, and the blight that they create is seriously threatening the health and vitality of our neighborhoods.”
“Small businesses have been in decline in San Francisco for at least the past 25 years,” SF’s chief economist Ted Egan tells The Frisc.
Last December, Sup. Dean Preston, a legislator not often inclined to put faith in market forces, posted on Twitter that the laws of supply and demand should be working their magic: “Lower the rent/price enough and someone will move in.”
The forces hobbling downtown (once-bursting offices now at record-high vacancies) are different than in the city’s outlying areas — and conditions differ from neighborhood to neighborhood as well. But in the busy residential neighborhoods, from the Richmond to the Mission, why don’t property owners bargain to find tenants, or sell to more ambitious buyers, or demolish underused properties in favor of housing? Why do landlords let all this lucrative space just sit around?
There are many reasons, and efforts to counter them, like cutting red tape and taxing vacant locations, don’t seem to be working. Vacancies are on the rise citywide, up to 5.8 percent as of March 31.
For some stubborn landlords, it’s not clear what will work. Take, for example, one of the city’s most egregious cases of wasted neighborhood space.
Clement Street window dressing
Busvan for Bargains, the family-owned furniture store that peddled antiques and Playland-at-the-Beach artifacts on Clement Street for more than 50 years, closed shop in 2002. Owner Michael Busk said at the time that he wanted to return to academia and wouldn’t sell the business that his parents founded to anyone outside the family.
Although the bright yellow Busvan sign still hovers over Clement, the 18,500 square-foot space has remained vacant for 21 years.
Busk, however, has a different definition of vacancy. “I’ve had my office there for the last 20 years,” he tells The Frisc, adding that a number of local nonprofits also rely on the ample square footage for storage.
The windows facing the sidewalk are stuffed full of oddball artworks made from vintage toys, disused carnival games, grinning jester heads, and 3-D collages, all the work of artist Michael Pedroni. Years ago, Pedroni needed somewhere to store a large piece from Burning Man, so Busk let him put it in the window. “People were crazy about it, and so he’s added on,” Busk says. “I think it really dresses up the street.”
Pedroni’s art means the Busvan site is still contributing to Clement Street, although in this case it’s literally window dressing. Would Busk ever consider renting or selling to a new business to fill the rest of the store? “Well, where would my office go?” he responds.
Recent carrots and sticks don’t seem to faze Busk. In 2020, San Franciscans approved a tax on chronically empty storefronts. The pandemic delayed enforcement, and the meter finally started running on Jan. 1, 2022. (The first round of payment data should be released later this year.)
In the same election, San Franciscans also approved Proposition H, an overhaul of small-business red tape to help fill empty spaces. The mayor recently toured the city’s permit center to tout Prop H’s success and announce more changes. But both vacancy data and the eyeball test tell us the same thing: Whether you blame the pandemic, street crime, deeply entrenched bureaucracy, online shopping, or other factors, City Hall policies aren’t working.
Dawn of the dead businesses
At least Clement Street has crowded eateries, Asian groceries, boutiques, and a Sunday farmers market. Downtown isn’t so lucky, and last week, SF announced the Vacant To Vibrant program, a plan to subsidize thousands of pop-up ventures into derelict storefronts. (The program is only for downtown spaces.)
Downtown office vacancy is now 30 percent, and that’s just unleased space. According to Kastle Systems, which counts card-key entries, about 40 percent of SF workers are back working in offices that remain open.
The longer a space remains vacant, the more likely it will attract vandalism and other property crime, which in turn makes it even less attractive to market.
Revitalization hangs on a lot of hopes: Hope that empty offices might one day turn into housing, or that some space once occupied by tech firms could be rented to retail. Even the latter could take a while, according to SF Planning director Rich Hillis. “It’s a lot less profitable,” he says, and figures some landlords will hold out for their return long past the point where it’s rational.
While SF has a chasm to fill in its downtown core, it also has hundreds, possibly thousands of smaller holes to fill across neighborhoods. How many? Office of Economic and Workforce Development spokesperson Gloria Chan tells The Frisc that the city has never had good data at a neighborhood level “for a variety of reasons.”
Mark Ritchie, a Bay Area commercial broker, says fallow storefronts can be victims of their own former success. When a space occupied for decades by the same tenant — say, a beloved restaurant for 40 years — finally goes dark, it will often have to be “brought up to modern standards” for things like building codes and disabled accessibility before a new tenant moves in, Ritchie says.
Even if rents have fallen to an attractive point, the required upgrades might make the space less appealing or affordable. And the longer a space sits empty, the more deferred work may have accumulated.
Cynthia Huie, president of the Clement Street Merchants Association, says owners may opt to pass improvement costs onto tenants: “You [the tenant] have to put in all this money on a deal that you don’t know will make money for you, that’s a hard deal sometimes.”
There are other expenses businesses must consider as well. “Labor costs are generally a bigger factor, which is a function of housing prices,” says city economist Egan, who points out that SF lost a lot of low-wage workers during the pandemic and might require even more of a wage premium to move back — on top of what’s already a soaring cost of living.
Some building owners “might want to just take the tax write-off for the loss” rather than experiment with new ventures, Huie adds, especially absentee owners who may not care much about neighborhood blight. These are the cases that the empty storefront tax is meant to dissuade.
Mission Street blues
As commercial broker Ritchie notes, there are differences among neighborhoods. The Mission, for example, has been hit hard by commercial closures for years.
Mission Merchants Association president Ryan Motzek says rational thinking doesn’t appeal to some landlords who seem content to let properties go to seed.
In 10 blocks of Mission Street, Motzek counts 70 empty storefronts. For landlords with large commercial portfolios, the Mission might not be a big priority; “We’re just pocket change to them,” Motzek says, and underscores the vicious circle of empty storefronts. The longer a space remains vacant, the more likely it will attract vandalism and other property crime, which in turn makes it even less attractive to market.
No one thing can break the cycle. History shows that eventually blighted corridors become interesting — perhaps to artists or other “urban homesteaders,” as SF art historian John Zarobell wrote in 2014 — because they’re in bad shape and thus presumably cheaper. Sometimes these “blighted corridors” are in fact dense, close-knit neighborhoods, and changes are spurred through malign intent.
But San Francisco is now trying to speed up the cycle with well-intentioned carrots, like red tape removal and the downtown pop-up grants, as well as sticks like the vacancy tax. OEWD spokesperson Chan says in addition to the downtown Vacant To Vibrant program, City Hall is working to plug pop-ups into empty spaces elsewhere, like the Castro.
Of course, this being San Francisco, there will be debates, whether it’s merchants fighting over dollars (as with the Castro pop-up plan), the fear of gentrification as a reason to oppose new businesses, or pushback against more eyes on the street — via the SFPD, community “ambassadors,” or technology — meant to encourage more foot traffic.
Ultimately, though, the debates must have resolution. As the second densest city in the United States, San Francisco has too many empty spaces that could be put to good use — to slurp a bowl of noodles, take a kid to dance class, or just hang out with a friend and, you know, shop.
