
San Francisco Hangout Becomes Casualty of Tech Boom - timr
http://bits.blogs.nytimes.com/2013/04/21/san-francisco-hangout-becomes-casualty-of-tech-boom/?ref=technology&gwh=8336CA84CEECB7B8C6EC12948B38BF00
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Argote
San Francisco's high rents are more due to the fact that the city has refused
to build more housing stock (particularly, high density housing).

When the supply (almost) stays the same and the demand increases, the
equilibrium point for rents is bound to increase as well.

~~~
rdouble
How does lack of housing cause high rents for restaurants?

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Scaevolus
Real estate is at a premium, and it's reflected in both high apartment rents
and high commercial rents.

It's largely driven by the city's height limits-- there are only so many
square feet of usable housing you can fit within a given volume of space.

~~~
_stephan
At some point city planners should ask themselves how many billions of dollars
of higher rents per year the benefits of a flat city skyline are worth to its
residents (and how to fairly balance the interests of property owners and
renters).

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JPKab
_Gasp_ You mean you want a bunch of NIMBY idiots to quantify their issue? If
they did that, there would be a big problem, because it would plainly
illustrate how absurdly greedy they are being.

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patio11
I'm incapable of reading any reporting on "these damn young square techies
snapping up all the desirable places in our hip urban areas" without hearing
"... when those areas were clearly designed to be affordable for successful
members of society, like brilliant young journalists at this publication."

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batgaijin
young bloggers, please.

~~~
patio11
Without agreeing that journalists are more credible than bloggers, I think the
discursive intent of that correction seems to be jibing at her social status.
That's adding insult to injury, if the injury is the real difference in
purchasing power between young techies and young journalists. The jibe isn't
even accurate, as she has articles in the print edition, as well.

~~~
batgaijin
I have no problem with her socioeconomic status. I think a lot of journalists
are just very upset with the notion that other people can write equally well,
and thus it is a communal act instead of a career option. I mean, I am sorry,
but you know that she most likely wants the 'golden days' of newsprint back
(whether or not she experienced it) simply because of the career stability.
And she would probably be happy with the other regressions in society that
would imply.

That's what happens with technological progress, it ebbs at lifestyles and
sects before they are even acknowledged to exist.

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dmix
I propose a more accurate headline: San Francisco Hangout Becomes Casualty of
Real Estate Policy.

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smutticus
How about: San Francisco restaurant becomes casualty of America's obsession
with private property rights.

The sane way to handle renters vs owners is to restrict the amount rent can
increase per year. It might slow gentrification and decrease profit of
landowners but it would solve this restaurant's problem.

I own property in The Netherlands and rent it out to tenants. There are
increased risks for me because tenants have a lot more rights in The
Netherlands than in the USA. But having been a tenant in the past I can
appreciate the stability that comes with restricting rental increases.

Does it mean I probably make less money? Yes.

But I like being able to walk around my city and not see homeless people
everywhere.

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cpursley
Actually, the exact opposite of what you said is the solution. Allow stronger
property rights. Allow developers to build up using simple real estate
economics - for residential and commercial projects. Rent control is the
quickest way to turn one of America's best cities into vast slum.

I'm a commercial real estate appraiser. Real estate already has very low
margins (10% - 20% for strong operations) - how do you expect the property
owner to maintain the property (expenses, taxes, mortgage) and make enough of
a profit to consider holding onto said property? Let's turn that around - you
presumably like your job. Now, take a 40% pay cut - can you still afford to
keep your job?

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jasonwocky
> Rent control is the quickest way to turn one of America's best cities into
> vast slum.

NYC has rent control, and it's hardly a vast slum.

And as a counter-dynamic, overbuilding and its associated crime rate increase
is another way to turn a city into a slum. Few things breed crime like
abandoned housing.

~~~
cynicalkane
NYC _was_ a vast slum during a time when rent control, public housing, and
social policy were a much bigger deal than they are now.

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gojomo
_The Grove_ prices are already astronomical, and it's always busy when I stop
by, so if they can't cover rent there, I wonder what business could.

~~~
seanmcdirmid
An Apple store? You could do much better per sqm of retail space than a
restaurant (you can do much worse also).

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gojomo
There's already an Apple store about 3 blocks from Chestnut's _Grove_. But
perhaps eventually San Francisco can become one giant Apple store!

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seanmcdirmid
Totally. Obviously, San Francisco can't just become one huge apple store, but
the fact remains that some high-end retail can do much better with real estate
so that a high SQM price doesn't really affect them. The only question is: how
much high-end retail does the market really need? And people have to eat also.

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ajays
I dunno... how many techies are there in the Marina? I thought the techies
dominated SOMA and chunks of the Mission. Marina feels like the playground of
the trustafarians, not nerdy techies.

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grbalaffa
Lots of SF residents and business got squeezed during the mid-2000s real
estate boom too, however there seemed to be far fewer of these sorts hand-
wringing articles back then. There is something about tech in particular that
triggers a lot more consternation than other types of booms.

~~~
grinich
I think there's a not-so-subtle distain for "outsiders" moving to these areas
and out-pricing locals. It also often happens in gentrifying areas of lower
socioeconomic level, but those stories don't make it to the NYT...

I bet there's a nearly identical story from the gold rush era.

~~~
spitx
You cannot even begin to understand the degree of disdain these folks have for
techies without reading Rebecca Solnit's diatribe on Silicon Valley's employee
shuttles ruining the city.

Source:

<http://www.lrb.co.uk/v35/n03/rebecca-solnit/diary>

~~~
encoderer
Thanks so much for sharing.

Great article from a fantastic writer. She, apparently, hates me, and I
disagree with a lot of what she's said here, but still, great article.

~~~
spitx
We cannot continue to condone this kind of antagonism.

This cannot be good.

~~~
encoderer
Everybody is entitled to their opinion, spit. I appreciate that hers was well
written and cogent.

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uvdiv
This place is apparently close to the center of SF:

<http://goo.gl/maps/zwBes>

It's really amazing how underdeveloped the area is. It looks like a 50-year-
old farm town.

~~~
jonknee
Apparently you haven't been to many 50-year-old farm towns in the US lately.
(All these businesses would be closed and a Wal Mart Supercenter would be off
a highway somewhere close).

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hasker
Commercial real estate often operates with longterm leases and sometimes pre-
defined renewal options. It is quite possible this restaurant signed a ten
year lease in the shambles of the last tech bubble and now needs to renew the
lease.

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john_w_t_b
I lived in the Marina in 1999 and don't remember the Grove either. Spent many
weekend mornings eating breakfast at other trendy cafes on Chestnut Street.

The article mentions an annual rent of $246k. Assuming the place is open 360
days per year and 10 hours per day, that amounts to $68 per hour. If there are
20 tables in the restaurant, the rental cost is around $3.40 per table-hour at
full utilization. This seems achievable for a popular restaurant.

~~~
dredmorbius
You're confusing income with profit. Restaurant utilization is also highly
variable through the day, and cafes often have long loiter times on tables.
Paying rent out of $3.40 left over after materials, labor, and other non-rent
expenses, even on an upscale café's inflated prices, is fairly challenging.

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Axsuul
Disable JavaScript to view this article.

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HunterV
Or if on Chrome, view it in incognito.

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jweir
Anyone remember Ristorante Ecco in South Park? Its rent double around 2000.

The space was vacant for a long time, and I don't think the landlord ever got
the new rent - something happened to the local economy around 2001, but I
can't quiet remember what.

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bane
Yet places in Chinatown selling cheap tourist kitsch don't seem to have the
same rent struggles.

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spitx
I think Durga's comment on the NYT site puts it best:

    
    
      While the above story describes a real problem in SF, it
      ignores two much more significant contributors to the
      issue that interlock with the effects of tech money.
    
      First, SF residents are extremely anti-development and
      NIMBYism runs rampant. It is ridiculously costly, time
      consuming, and difficult to renovate or build anything in
      SF. Add in a corrupt city planning process that was
      deliberately designed to allow just one person to hold up
      any project, large or small, and the result is a extremely
      restricted supply of both residential and commercial real
      estate.
    
      Second, the most influential opinion-leaders and elected 
      officials are virulently anti-business. This has led to an
      oppressive level of mandates, fees, permits, taxes,
      licenses, and neighborhood activist oversight to be
      imposed on all businesses, from the local mom-and-pop dry
      cleaner to the few remaining large companies based in SF.
    
      So, the combination of the influx of highly paid (or
      already affluent) residents, an essentially fixed and
      unchanging real estate stock, and a deeply ingrained
      hatred of private economic activity by both politicians
      and active voters result in places like the Grove being
      penalized for their success. The problem cannot be reduced
      to a simplistic case of rich tech workers throwing down on
      starving artists.
    

Source:

[http://bits.blogs.nytimes.com/2013/04/21/san-francisco-
hango...](http://bits.blogs.nytimes.com/2013/04/21/san-francisco-hangout-
becomes-casualty-of-tech-boom/?comments#permid=2)

~~~
protomyth
"This has led to an oppressive level of mandates, fees, permits, taxes,
licenses, and neighborhood activist oversight to be imposed on all businesses"

If you follow <http://www.dnalounge.com/backstage/log/> you get a pretty good
view of some of the regulatory obstacles.

~~~
damncabbage
Some particularly good ones:

* <http://www.dnalounge.com/backstage/log/2012/09/28.html>

* <http://www.dnalounge.com/backstage/log/2012/10/09.html>

* <http://www.dnalounge.com/backstage/log/2012/09/11.html>

* <http://www.dnalounge.com/backstage/log/2012/06/13.html>

* <http://www.dnalounge.com/backstage/log/2012/06/01.html>

