Earlier this year, blog readers were involved in an effort to count the vacant storefronts in the Richmond District. Spearheaded by District 1 Supervisor Sandra Fewer, the #fewervacancies campaign resulted in the identification of over 150 vacant storefronts in the neighborhood.
The startling number confirmed what Richmond District residents have known for awhile now – retail storefronts are disappearing. And while those storefronts sit empty, they are often neglected by building owners as trash, graffiti and other blight build up. One empty storefront on a block can lead to more vacancies, and bring down the value and appeal of entire commercial stretches in a neighborhood.
Residents were well aware of the growing crisis, but the City was not. When Fewer held a hearing about the vacant storefront issue earlier this year, she was told by the Department of Building Inspection – who are responsible for monitoring empty storefronts – that there were ZERO vacant storefronts in the Richmond District.
How could they keep a straight face and cite that statistic? According to current DBI regulations, a storefront is not considered vacant if a “for sale/for lease” sign is posted in the window. Never mind that some spaces have had those signs up for months or years. But if the sign is there, building landlords do not have to register their property as vacant, and as a result, can avoid paying a $711 annual vacant storefront registration fee (for which there is a 270 day grace period in case they rent it out quickly).
In case you’re wondering – only 40 vacant storefronts have registered and paid the registration fee in the last 12 months despite there being thousands of vacancies across the City.
New legislation for better tracking
Last week, Supervisor Sandra Fewer introduced new legislation that would require the City to more accurately track the number of vacant storefronts. And in turn, make landlords more accountable for the upkeep and rental of their properties.
Fewer’s new bill would require that vacant storefronts immediately register with the Department of Building Inspection, regardless of whether the property is for sale or lease; the 270 day grace period foe registering would also be removed.
Under the new law, DBI would also require building owners to pay the vacant storefront fee of $711 at the time of registration. If the owner rents out the storefront to a tenant less than a year after the date it was registered as vacant, the owner shall be refunded a prorated amount of the registration fee.
If a building owner refuses to comply with the new legislation by registering their vacant storefront in a timely manner, they will be issued a Notice of Violation from DBI and be required to pay a penalty fee of four times the registration fee ($2,844), in addition to paying the registration fee ($711). Owners who still fail to comply will be subject to a Director’s Hearing, an Order of Abatement, and a lien on their property if they continue not to respond.
“When you have commercial property owners holding multiple storefronts vacant for long periods of time, that hurts all the other small businesses in the area who rely on a vibrant commercial corridor to attract customers,” said Supervisor Fewer. “The enforcement mechanisms in this legislation are vital to addressing our vacancy problem head on and complement ongoing efforts to streamline permitting and increase retail flexibility so our small businesses can thrive.”
So far, Fewer has drafted and submitted the Vacant Storefront Ordinance legislation (read it here) but there is a journey to it actually becoming City law. After 30 days it will be assigned to a committee, most likely the Land Use Committee. From there it will be scheduled for a committee hearing and voted on by the committee. Once it passes committee it will then be voted on by the full Board of Supervisors.
Ian Fregosi, an aide in Supervisor Fewer’s office, estimates that the legislation should be scheduled at committee by late January 2019.
Mayor vows to remove red tape to spur retail business growth
In addition, Mayor London Breed has vowed to cut the costs and the red tape for businesses to open new retail locations in the city. With the Citywide Storefront Vacancy Strategy unveiled by Breed and Supervisor Vallie Brown this week, city officials hope to fill vacant retail spaces, which have been emptied due to shifting shopping trends and slow sales. The storefront strategy was created from findings in a report published in February 2018 from the city’s Office of Economic and Workforce Development on the challenges facing San Francisco’s small businesses.
In the meantime, residents can continue to report vacant storefronts through 311, as well as file reports of blight, trash or graffiti on a storefront. They have a handy mobile app for filing 311 reports.
Sarah B.
Seems tough to me to make enough to be a store owner here in SF besides the state of retail. Traffic, Parking, homeless, high rents, high employee costs, etc.– arguably each may or not be valid, but some of them add up to a tough uphill battle for a store. It does not seem a surprise there would be a lot of vacancies.
From my experience the real reason these storefronts are vacant is because they are trying to sell the building and it is much less messy to do that if you have tenants with leases. How could they lose out on hundreds of thousands in rent? Because they will make millions when they sell.
Unfortunately, the City’s political establishment reaps what is sows- it is on the wrong side of most social and economic issues, often acting like they’re smart doing whatever they please, despite the consequences or existing state/federal law. Supervisor Peskin is exhibit A- he asserts that commercial property owners must actively lease their buildings within some arbitrary time frame or pay a ‘fee’ of more than $90,000/year – such a belief- and tax- is entirely unconstitutional, as building owners cannot be told how to use their properties. Clearly, his proposed legislation- atop the questionable and disfunctional vacant building registration, fee and lien system already being used by the City- would constitute unfair taking and a serious property owners rights violation, likely to cost the city hundreds of millions to remedy. The City’s pro-illegal/sanctuary city, pro-homeless, anti-business, anti-family and pro-drug policies are largely what’s turning some neighborhoods into squalor- its not the property owners, irregardless of how hard they might be trying to rent their space. Many are owned not by foreign fat cats, but rather by original San Francisco families and small businesses trying to invest in neighborhoods as low-return, alternative investments. With the complete mess that decades of extreme politics has created in the City- and after Amazon has drastically changed modern retail- the City’s “living” wage/benefits, expensive building code upgrades, on top of expensive property and income taxes, maintenance and insurance- makes many properties un-rentable, drives up consumer prices and has made small retail obsolete- new retail commercial tenants simply do not exist! If a landlord’s commercial realtor is lucky enough to find one- they often have to give them 3, 4 or even 5 years of free rent and hundreds of thousands in improvement allowances to attract them into signing a lease- then hope that they can ever pay rent once its due. Worse, try hiring a contractor for less than $1MM, or getting the permits to remodel an existing storefront- it can take years, and dealing with the City Building Department is worse than the DMV.- with a reputation for being slow, uncooperative, inconsistent, understaffed and mismanaged.
Perhaps the biggest problem is a lack of parking- the truth is that only a small percentage of residents and visitors walk or ride the trolly or bus. The unsustainable cost of residential housing has led to the City tolerating multiple families, sometimes 10, 20 or even 30 residents using bunk beds within a 3 bedroom “single-family” home, often in the garage- so commonly 5 or more “extra” cars clog the neighborhoods, with no choice but tying up precious street parking. What business wants to commit to signing a long term lease with no place for their customers or employees to park?
The Board of Supervisors- while having a worthwhile dream of filling vacant storefronts and restoring neighborhood charm- obviously does not understand who is responsible for and what changes have created their problem. But they act like heroes, promoting misguided legislation and “fixing the problem” by making high-tax paying property owners the villans- quite clearly, the truth is otherwise.