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Comment by lr | Hacker News Reader

From the Reason article:

> "The majority of the building owners, and certainly retail brokers like myself, all are aggressively trying to fill these vacant spaces," wrote Hansson. "In almost all cases, the rent is not the stumbling block; it's the high cost of starting the business, strict government regulations, and the risk of ultimate success."

I don't buy that argument fully. Why is the place vacant in the first place? Usually because the pervious, sometimes long-term business, could not afford the double, or triple rent increase. The question is, Did the owner of Sparky's really want to close, or were they not able to afford the rent increase? And now, we are suppose to believe that the place is empty only because a new business wants to pay that new amount and they're just waiting on permits?

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The Castro area has more retail vacancies than most. Many of the vacancies are owned by a single landlord, last name is Natali I think. He kept the Patio Cafe space vacant for something like 15 years. Thanks to Prop 13 it costs him very little to do so and he has plenty of profit from the other buildings. There is a pattern of landlords raising rents to a level that existing businesses will not be able to afford, and then leaving them vacant. Supposedly there are big brands that will pay these rents, but they are kept out by a San Francisco law against chain stores. Without this law, the Castro would turn into a sort of high end rainbow themed mall. Some of the writing about Greenwich Village in NYC captures this dynamic better - there are national brands that can afford to run a flagship store in a tourist neighborhood, at a loss. The granolashotgun blogger has pointed out that in much of the US, there is simply more retail-zoned space than is necessary in the delivery age. I don't think that's what's going on in the Castro though. Prop 13 is a massive market distortion and the distortion is only growing, just as it was designed to do. That which is not sustainable must end, preferably before it gets worse.

>there is simply more retail-zoned space than is necessary in the delivery age

Although higher-end malls in growing cities are mostly doing pretty well, there's certainly no reason to think that urban retail in general should be immune from at least some of the same forces that help create the "dead mall" phenomenon.

I was walking through Cambridge yesterday for the first time in a while. In addition to a non-trivial number of empty storefronts my sense was that there was at least a bit of a shift away from retail and towards trendy-looking restaurants.

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