Economic Inequality: The Hidden Cause Behind the Mission Street Commercial Corridor’s Blight, Vacancies
The Excelsior’s Mission Street commercial corridor has succumbed to extreme wealth inequality, competition from internet big business and a ruling class that gives tax breaks and, despicably enough, the rights of citizenship, to large corporations via Citizens United — with the added bonus of unspeakably high commercial rents and cost of living for owners, suppliers and employees of small businesses.
Last year, the San Francisco Controller’s Office of Budget and Analysis published a study detailing sales tax revenue for the hospitality industry on 31 commercial corridors. The study, which covered 2010 through 2015, presents the state of the city’s restaurants. The Excelsior came in far behind the pack, with a dismal -12 percent growth rate.
The Ingleside-Excelsior Light addressed this issue and provided some solutions in my November 2015 article, “City Hall, Mission Street Needs You Now.”
While 2016 has seen the opening of some very welcome small businesses in the Excelsior like popular Korean spot Hwaro, others have vacated or continue to sit empty. Recently, the Doctor’s Lounge, a 65-year-old bar, closed after receiving an 82 percent rent hike.
Landlords receive tax write-offs for their vacant properties, letting buildings sit empty and blighted for years and sometimes decades. Many need serious renovations to bring them up to code, and landlords are more than happy to leave them, as garbage and graffiti pile up, until a wealthy corporation willing to make costly repairs wants in.
Meanwhile, many landlords don’t give long leases to existing businesses, just in case that high-paying corporate client wants the spot in a few years. Of course, no rent controls exist for struggling mom and pop stores.
Six years into the “economic boom” that was supposed to bring more money and services to everyone, San Francisco is operating on a budget deficit, and Mayor Ed Lee has chosen to deny, in part, the voters’ mandate to a free City College — a truly important equalizer in equality-challenged San Francisco — because voters did not pass his regressive sales tax hike.
Where was the conversation about how this tax would affect small businesses, who also pay roughly 25 to 30 percent of their earnings in yearly taxes? Where was the criticism of a tax that would have impacted poor and working-class people the most?
Amazon, Apple, Google and other large corporations notoriously pay around 5 percent yearly in taxes, not to mention the other breaks they receive as corporate rulers, like undue influence on our entire electoral system and the ability to function as monopolies with impunity. Their complex systems of tax shelters and re-routed payments allow them to operate virtually tax-free.
Yet when Supervisor Eric Mar proposed a “tech tax” earlier this year, it was rejected over outcry that it was “unfair”, with Supervisor Mark Farrell comparing the tax to “the politics of Donald Trump,” describing him as one of “those who divide us.” Most recently, Supervisor Jane Kim said she will introduce legislation to increase business taxes for companies that pay their CEOs far more than the average worker.
It’s worth noting that empty storefronts are not confined to the Excelsior. From Castro Street to Valencia to Union Square and beyond, our commercial corridors show record numbers of shuttered stores.
Of course, it’s a changing world. The internet and globalization have, and will continue, to take a bite out of small business.
As with all economic and political issues, there is an intersection at play: As customers get displaced or evicted, stores lose their client base. As inequality grows and the middle class disappears, spending money dries up.
Lee supporter and new District 11 Supervisor Ahsha Safai, a real estate speculator himself, raised much of his campaign money from the real estate and tech industries. He has promised to focus on small business and try to set up a Community Benefit District in the area — and in that, I hope he is successful.
“We need concerted investment of both public and private funds … This plan will require help from both the Mayor’s Office of Economic and Workforce Development and multiple City agencies including the Planning Department, the Department of Public Works, and [San Francisco Municipal Transportation Agency] to name a few,” Safai told The Light in October.
But the problem of suffering small businesses in this city will remain as long as politicians favor monied interests over people. Many of the Democrats who have positioned themselves as antidotes to Trump ultimately support the same income inequality and corporate welfare that his cabinet and Republicans have been so criticized for.
Lee and Safai, if you really care about small businesses, level the playing field. Demand that wealthy individuals and large corporations pay their fair share in taxes. Stop taking money from companies like AirBnB — one can either support big corporations and big money, or tenants and small businesses, but not both.
Fine landlords who let their buildings sit blighted and vacant. Support Free City College (which Safai did approve in a January vote) because accessible education helps close the wealth gap. And support reforms to end Ellis Act and Costa-Hawkins evictions, which throw many of our most vulnerable out on the street.
The Excelsior’s problems reflect larger, national trends. As the fate of our neighborhood hangs in the balance, it’s time to connect these issues and look at the larger picture.
The Ingleside-Excelsior Light accepts submissions for Community Voices on a rolling basis. Submit a proposal or draft to email@example.com. This article first appeared in the Light’s February 2017 print edition.