'A Strange, Second-Wave Gentrification' in San Francisco

Vast amounts of tech money have transformed the city's commercial spaces in unexpected ways.

2 minute read

January 19, 2020, 9:00 AM PST

By Camille Fink


The Castro

Dan Schreiber / Shutterstock

Adrian Daub takes a closer look at the area around Church and Market streets in San Francisco to better understand the phenomenon of commercial spaces remaining empty after businesses have been priced out:

[Sparky’s 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.

The area has seen huge growth in the number of residents and upscale residential developments, but storefronts remain unoccupied, says Daub. "Developers make their money with luxury apartments aimed at high-salaried tech workers, while ground floor retail is an architectural and economic afterthought: giant spaces that any business would have trouble filling with life and justifying financially."

Daub points to California’s Proposition 13 and the cap on property taxes as a factor in this market dynamic. "Owners may pay Nixon-era property tax rates, while renting out those spaces at rates that have exploded in the last 40 years. They, too, can afford to let buildings sit empty."

San Francisco highlights the link between the technology industry and capitalism and the change that ingenuity and money can bring, says Daub. "But walk through parts of San Francisco today, and you get a different sense altogether: not an uncanny effectiveness, but a panicked swirl of homeless capital."

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