A Challenge to Gentrification, or a Restriction of Economic Growth?

Several moratoriums on Mission District businesses and housing have been struck down — but one was renewed this week. 

The Mission District is a constantly changing beast. Step away from the neighborhood for a couple weeks, and chances are by the time you return a new business, bar, or restaurant will have opened its doors, or closed them. Some addresses have so much turnover they turn into urban legends — like 280 Valencia St., which has been five restaurants — Conduit, Another Monkey, Plin, Nostra Spaghetteria, and Babu Ji — in only eight years. It’s a neighborhood so plagued with rampant alterations — be they evictions, fires, or businesses coming and going — that the words gentrification and Mission have become nearly synonymous.

On Tuesday, the Board of Supervisors approved the extension of a strict zoning policy instituted in an area of the Mission District that’s particularly vulnerable to gentrification: a large rectangular swath bounded by Division Street to the north, Mission Street to the west, Cesar Chavez Street to the south, and Potrero Avenue to the east. Under the policy, businesses seeking to open a restaurant or merge two storefronts to create a commercial space larger than 2,000 square feet must present their project to the Planning Commission, which will then decide if the business is “necessary or desirable to the neighborhood.”

By forcing this extra step of securing a Conditional Use review, the policy is designed to stop “an over-concentration of restaurants that may crowd out existing neighborhood-serving retail establishments, and adversely alter the existing neighborhood character and its cultural and economic diversity,” or so states the legislation.

The issue the legislation raises  — the pushing out of existing businesses and the destruction of the neighborhood’s cultural history and character — is not insignificant. According to the Mission Action Plan 2020, which late Mayor Ed Lee requested from the city to better understand the challenges the Mission faces, 75 percent of the neighborhood’s residents earned low-to-moderate incomes in 2000, but by 2013, that number had dropped to 65 percent. If we continue at the same rate, only 57 percent of the Mission would fall into that category by 2020.

In addition, 50 percent of the Mission’s residents identified as Hispanic or Latino in 2000. Fourteen years later, that number dropped to 39 percent.

And residents are not the only ones being displaced: small, neighborhood-serving businesses like corner groceries, panaderias, and taquerias have been hurt by a loss of Latino residents, while competing with larger stores outside the neighborhood. 

Stopping a tsunami of change from displacing low-income people of color in the Mission is not an easy feat, and even with numerous city agencies and nonprofits dedicating their energies to the effort, preservation remains a struggle. An effort to put a moratorium on market-rate housing developments in the Mission District for 18 months failed, and a similar plan to pause any new restaurants from moving onto Valencia Street never reached fruition.

But this “interim” business zoning policy seems to have stuck — at least for the next 15 months. The Board voted to approve the extension on Tuesday. And while the intentions behind it undoubtedly come from a good place, the extra hoops required for small business owners who want to open up shop in this area of the Mission may be stalling the very thing that the neighborhood wants: economic diversity, community-serving businesses, and job opportunities for local residents.

Santino DeRose, a commercial real estate broker with DeRose Appelbaum, says these zoning controls are not helping Mission Street, which has a slew of commercial vacancies, many of which have sat empty for months.

“By creating additional barriers to open for business, small business is dramatically affected,” he says. “This potential legislation makes the assumption that the protected small business class are retailers that need smaller footprints. The reality is that most new small businesses that take up ground-floor retail are restaurants and cafes.”

Furthermore, sometimes larger commercial spaces are even more profitable; leasing larger spaces at a lower rent per square foot can help businesses scale and succeed more easily than in a tiny space. A quick search turned up a handful of these large, vacant commercial spaces: 2279 Mission St., the site of a former Goodwill, has 4,200 square feet. Queen’s Shoes’ old spot at 2356 Mission St. has 2,950 square feet. And the newly completed 1880 Mission St. apartment building has a total of 7,656 square feet of commercial space on the ground floor, that — four years after it was built — remains mostly empty or filled with such businesses like  an architecture firm that takes up a glass-windowed space on the corner of Mission and 15th streets.

Aside from the latter, buildings on Mission Street are also old, and often need core repairs and investments in order to be business-ready.

“It’s a slow-moving train,” DeRose says, describing getting new business owners to sign leases in the neighborhood. “There are a lot of hurdles: Building conditions are inferior, zoning is a challenge, and formula retail is almost impossible.”

One just has to take a walk to notice that Mission Street has many more empty storefronts than Valencia, just a couple blocks away.

“There’s just too much vacancy there,” DeRose says. “Why add more restrictions?”

This moratorium is meant to be a temporary measure, but with this week’s renewal, it may just be buying City Hall time to develop something more cohesive. In the meantime, we hope it succeeds at its mission of keeping small businesses healthy and vibrant — without chasing away new tenants altogether.

Nuala Sawyer is SF Weekly’s news editor.

nsawyer@sfweekly.com |  @TheBestNuala

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