Proposed zoning amendments for Solano Avenue and other Berkeley business districts should make life easier for merchants opening or expanding their businesses if they are implemented

Merchants in Berkeley may have an easier time in future opening or expanding a business if eight retail zoning amendments that were approved at Wednesday night’s Planning Commission meeting go on to be implemented.

The city’s approval was interpreted by John DeClercq, co-CEO of the Berkeley Chamber of Commerce, as a symbolic shift in tone for Berkeley. “Berkeley really does want to be more business-friendly. We have to get rid of the bogeyman. Berkeley needs to open its arms to business,” he said.

All 18 of the city’s merchant associations were surveyed over a two-week period about eight amendments identified by the city’s planning staff.

Five amendments seen as being the easiest to implement, and having the greatest potential impact, involve sidewalk seating, and instituting a straightforward over-the-counter fee to apply for it; allowing ground floors to be used for offices such as insurance agencies; lowering the review process period for restaurants to obtain a beer and wine permit from 6-12 months to 2-4 months; simplifying the review process for new restaurant applications; and lowering the review process for pedestrian-oriented businesses such as banks and exercise studios. (Read the survey for a full description of the proposed amendments.)

The five amendments received strong support among the survey’s 175 respondents to date. The three other amendments which were approved concern suspending quotas on Solano Avenue for four years; a change in zoning on San Pablo and Ashby and extending late-night hours from 10:00pm to 11:00pm.

As Berkeleyside reported earlier this year — and discussed with the community at our Local Business Forum in January — complex and time-consuming zoning laws have contributed to Berkeley’s reputation as a city in which it is difficult to do business. It took Robin Dalrymple nearly a year to get her iScream ice-cream shop open on Solano Avenue, for example, because of the permit hoops she was required to jump through.

The move to reconsider retail zoning was spurred by a survey conducted last year by councilmember Laurie Capitelli among residents and merchants on Solano Avenue. Business district leaders Roland Peterson (Telegraph), John Caner (Downtown), Heather Hensley (North Shattuck) and Allen Cain (Solano) have been vocal in their support of the proposed amendments.

DeClercq at the Chamber of Commerce said he applauded the actions of the Planning Commission as a strong commitment to welcome more small businesses into Berkeley and assist them to succeed. “We’ve all heard the horror stories of how difficult it is to get a business open in Berkeley,” he said. “And we have to do something to get all those vacant spaces leased.”

DeClercq added that these city-wide moves would not affect neighborhood systems. “A lot of Berkeley is correct in protecting neighborhood niche issues. These items are good for the whole city without disturbing local sensitivities.”

The Planning Commission will next consider specific language to implement these guidelines and then recommend the zoning amendments to the City Council.  The Council will then have the opportunity to put the changes into action.

Tracey Taylor

Tracey Taylor is co-founder of Berkeleyside and co-founder and editorial director of Cityside, the nonprofit parent to Berkeleyside and The Oaklandside. Before launching Berkeleyside, Tracey wrote for...

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  1. This would be a voluntary agreement, so I presume it would be legal. However, there may be a someone on this site who has a theory about why it is illegal.

    I’ve pointed out more than once that you can do it that way. You can find a model for it in Petaluma:

    Note, however, that the vacancy penalty structured that way goes away after a small number of years and is imposed on the owner/developer, not attached to the property itself.

    The deal would be something like:

    “We’ll let you build to 5 stories but the groundfloor has to be retail and if it doesn’t make $X in tax revenue over the first 3 years, you are on the hook for the difference (plus a penalty).”

    Add in lots of fancy stuff about how performance is measured, what happens if the property is sold, etc. etc.

    I don’t think it would be effective public policy. It’d be easy to “game” such a contract and evade the penalty without creating any real social value in that retail space. Plus I think that downtown, at least, we have too much retail space already — we want less, not more. Plus since the condition can’t be attached to the property, in perpetuity, it is at most a short-term win for the City.

    But, yes, the City could write a contract like that.

  2. On most commercial corridors, these mixed-use projects may be 5 stories under current zoning. In general, developers cannot go over 5 stories without shifting to a more expensive form of construction instead of wood-framed construction, so a density bonus would generally not work economically.

    I would definitely be in favor of this sort density bonus on commercial corridors where the current zoning allows less than 5 stories.

    (There is also a new construction method that lets them go to 6 stories, using a bolt-together steel frame, which was used for the affordable housing building of the Brower Center. If this proves to be popular, we could also have this sort of density bonus letting them go to six stories, and I would also back that generally.)

    We would still need some way to enforce the agreement not to keep the storefronts vacant, which they would make to get the density bonus – such as a fine if the storefronts remain vacant for a long time.

    This would be a voluntary agreement, so I presume it would be legal. However, there may be a someone on this site who has a theory about why it is illegal.

    In fact, if this sort of density bonus is legal, you could keep the current building envelope and have a similar sort of voluntary agreement, by downzoning to three or four stories for those who do not provide retail and giving the density bonus to 5 stories for those who do provide retail.

  3. So it’s not current at all, and you have no idea what Egan may have learned in the years since then.

    If you don’t mind me asking, what is your legal and economic background from which you are able to conclude that a vacant retail parcel tax would be illegal despite others saying it’s possible? What Law School did you attend? What Economics program did you graduate from?

  4. It was a few years ago during work on a parcel tax proposal lead by Supervisor Avalos suggested adding a vacancy tax to the proposal, but ran into the problem of “vacancy” not being an assessed characteristic of the property.

  5. If you want anyone to believe you, please post the correspondence here, Thomas Lord.

  6. You can believe both.

    I asked Mr. Egan what his notion was for a vacancy parcel tax was. He says it was an idea they considered adding to a parcel tax a few years ago. They ran into the problem that “vacant structure” is not a “characteristic of the parcel” of the sort an Assessor tracks – and so there was no obvious way to write the tax.

    Instead, that legislation would charge a separate amount for parcels which are “vacant land” vs. parcels developed in various ways — but nothing like charging extra for vacant retail space.

    He would like his City to consider a vacancy tax in San Francisco but, no, he doesn’t have a legal plan for one (unless its a secret 🙂

  7. The city needs a vacancy tax. Tax landlords who do not rent out their commercial space as they cost the city in lost tax revenue.

  8. Something tells me that the Chief Economist of the City of San Francisco knows more about this issue than you do, but thanks for trying anyway.

  9. Why not make ground floor retail a developer’s option, offering density bonuses or other incentives for installing community sensitive businesses.

  10. By the State Constitution (thanks to prop 218), any disputed portion of a vacancy parcel tax for a given parcel must be equal to or less than the amount of benefit conveyed on that property in excess of the benefit conveyed on the general public.

    (Article XIII D Section 4)

    So, for the same logical reason you can’t use a fee — but for a different legal reason — you can’t use a tax, either.

  11. Exactly.

    The credentials of the Chief Economist for one of the largest cities in the Nation trump those of a self-employed Berkeley programmer who writes occasional opinion pieces for the Berkeley Daily Planet.

  12. So who are we going to believe?

    The Chief Economist of the City of San Francisco

    Or a non-lawyer who seems to specialize in posting comments that say it is not legally possible to do whatever other people suggest

  13. You’re correct, Charles.

    According to Ted Egan, the Chief Economist of the City of San Francisco, “the City could structure a parcel tax on vacant commercial property, which would not apply to occupied commercial property. This would encourage owners of vacant commercial property to be flexible on rent, and thereby maximize occupancy and employment in the city.”

  14. Who said anything about 6022? Why bring up something nobody mentioned and then act like someone made a mistake?

    I love how you dropped the word “tax” from your quote of what I said so that you could pedantically focus on the other words.

    Kudos on the story though. You could write for Glenn Beck.

  15. Sorry, that’s 66020-66025 (not 6022) — in other words, the chapter. (That’s Title 7, Division 1, Chapter 9 of the Government Code.)

    Yes, 66023 is highly relevant, especially (f).

    Here is where you go off the rails:

    [the rules] do not seem to address the issue of a [fee or charge] that is not tied to the product, public facility, or service being provided.

    Yes they do. They set the cost of such a fee or charge at what it costs to provide the service (etc.).
    You measure any fee at all against those costs.

    In other words, the legal price for a fee not tied to a “product, public facility, or service” is $0.

    There is no wiggle room there. You can’t go in to court with what is essentially a fine and tell the judge “Eh, your honor. Yeah, sure, it looks like a fine. It acts like a fine. But, whose to say what’s really a ‘fine’? That’s a very philosophical question, you know! Who’s gonna decide? You? Me? Nah, that ain’t right. We prefer to call it a ‘non-optional courtesy fee’. See, that way the landlords give us da money and we courteously accept it. All nice like. If a fella or a lady won’t lower their rent, and we think they should lower their rent, we send them a bill for a vacancy courtesy fee. They pay and we smile while we take it. It’s all on the up and up. It only becomes … and I hate to use the word … some kind of ‘fine’ or ‘penalty’ if the landlord doesn’t have the good grace and common sense to pay up. A non-optional courtesy for vacant retail isn’t a fine … it’s only if you don’t pay it that we fine you. See? Big difference there.”

  16. “Alas, a law that prohibits failing to lower the rent on a vacant retail property might run into some Constitutional problems :-)”

    It’s all in the way you word it, which you clearly understand since you’re wording your fictitious fine law to support your argument.

    A law that prohibits a landlord from leaving a retail property empty for an undue amount of time or face the penalty of fines would mean the same thing, and probably get majority support from Berkeley residents.

  17. 66020-66022 don’t really apply.
    66023 might, but it’s open to interpretation enough that it could be reasonably argued in court.

    The language is written to protect individuals and businesses from usurious fees that are in excess of the cost of the service being provided, but do not seem to address the issue of a fee/tax/charge that is not tied to the product, public facility, or service being provided.

    “Any person may request an audit in order to determine whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any product, public facility, as defined in Section 66000, or service provided by the local agency.”

  18. You wrote:

    find some way of charging them for leaving storefronts vacant.

    Yes.. interesting idea. I don’t think you can. It’s not just about fees, although that’s what we’ve been talking about. You wrote:

    You are taking the word “fee” too literally. I meant: find some way of charging them for leaving storefronts vacant.

    There aren’t all that many ways the City can force a landlord to pay. There are fees for services the City can reasonably require of the landlord — but those don’t work for a “vacancy fee”. There could be taxes: tax goes up on a vacant retail space, let’s say. Only, that isn’t allowed under state law either.

    The only legislative thing left is fines. You could try vacancy fines. Alas, a law that prohibits failing to lower the rent on a vacant retail property might run into some Constitutional problems 🙂

    Some people in these threads have suggested that the problem here is unlawful collusion among landlords to maintain high prices. That’s a tough case to prove but at least there are already laws against that.

    City government in California, though, has its hands tied here. It really can’t coerce landlord’s into lowering retail rents that way. You need a different solution.

  19. Why should a landlord leave those storefronts vacant? Does that help meet any real societal needs?

    In fact, if the landlords lowered rents enough so businesses that are now marginal could afford them, some of those businesses would be successful, would generate more tax revenues for the city, would provide more jobs, and so would help meet societal needs.

    As you say, ground floor retail is perfect for the uses that people now want. So why is there a long row of vacant storefronts in the new apartment buildings on Shattuck north of Hearst? Why isn’t that a place that is bringing people together, as Shattuck is a few blocks north of there?

    I hear it is because the developers do not care about retail and just build the storefronts to get the entitlement to build housing. I hope we can give the developers an incentive to care about retail.

  20. You are taking the word “fee” too literally. I meant: find some way of charging them for leaving storefronts vacant.

  21. You wrote:

    With voter approval they might be able to impose higher fees,

    No, that is not the case. Section 66020..66023 is most relevant. Fees imposed by referendum are also limited to actual costs.

    Berkeley’s being a “charter City” doesn’t help here. The legislature left no doubt:

    66023(f) (f) The Legislature finds and declares that oversight of local agency fees is a matter of statewide interest and concern. It is, therefore, the intent of the Legislature that this chapter shall supersede all conflicting local laws and shall apply in charter cities.

  22. I agree. Access to the internet means that those fancy little boutique stores that brought together interesting and hard-to-find items in one store aren’t needed the way they used to be since we can go out in the virtual world and find them ourselves.

    There’s still room on Main Street for “interesting little retail businesses” but for them to thrive in a City like Berkeley they usually need to be hybrid businesses of some sort. A chocolate shop that also teaches classes in candy making. A breakfast restaurant that partners with a nearby chicken farm to also sell organic eggs & supplies for people who have backyard chickens.

  23. Thanks for the clarification. I think you’re right on this one.

    But that law seems to be for things that don’t require voter approval. With voter approval they might be able to impose higher fees, but attempting to do so would probably be political suicide, especially in a city where so many local politicos are fast friends with the real estate crowd.

  24. HELLO…the way we make, sell and buy stuff has changed. The cobblers, bakers and candle stick makers are in China. We buy their stuff at Target or Costco, along with underpants, socks, and now vegetables! Books are going digital…(hear the trees gasping in relief.) The friendly neighborhood grocer survives on sales of lotto tickets and booze.

    The only remaining decent buy (value, quality, price) in neighborhoods is sociability. We pay for the coffee, beer or sezchuan chicken, but what we’re buying is the opportunity for connection, with our friends, families, mates (current or prospective.)

    Ground floor retail is located perfectly for these uses. Location, location. location right? The neighborhood isn’t far away, actually it’s upstairs and across the street.

    Why should a landlord subsidize “interesting little retail businesses” when there are real societal needs to be met?

  25. Section 66106 is a blanket set of rules that limit the prices of fees. Fees reimburse the City for the real costs of specific services and/or use of facilities provided by the City specifically to the party who pays the Fee. Under 66106 (and related), a “vacancy fee” can only charge (more or less) the actual cost of services or facilities provided by the City specifically to that property owner on account of the vacancy.

    So, Joe Landlord has a well maintained and secured but long vacant retail property. There is no high-cost “service” the City really needs to provide there — no lawful vacancy fee can be particularly high.

    66106 and so on are there, in part, to make sure that “fees” can not be used as “penalties”. To have meaningful impact on retail rents downtown and on Solano, the “vacancy fee” would have to be implausibly large for any legitimate City service — it would be a penalty disguised as a fee.

    There are two legal tricks that have been used in California to get something kinda sorta like Vacancy Fees:

    1) Strong, cumulative blight penalties for properties not maintained to the same standard as if they were occupied.

    2) Conditions on variances and such. (This would only apply to a tiny subset of new construction, at best.)

  26. Cities in California may not charge a vacancy fee (of the sort you mean). The main provision of interest is from the California Government Code in section 66016. The upshot is that fees are for specific services or facilities and the fee may cover but not exceed the costs of using those services or facilities.

  27. A realtor/developer has told me that developers don’t care about the retail. They only build it to get the entitlement to build the housing above – which is why they are willing to keep retail rents so high that the storefronts remain vacant.

    I think the solution is a vacancy fee, at least on developers of those new mixed use buildings. Then they would lower rents enough to rent the retail in order to avoid the fee, and the zoning law would serve its purpose of giving us interesting streets lined with stores (not streets lined with vacant storefronts).

    There is no doubt that they could rent those empty spaces if they lowered the rent enough. That is basic economics.

    My guess is that, if they lowered the rent enough, we would get lots of interesting little retail businesses that cannot get off the ground now because they cannot afford current rents.

  28. Good point, Thomas. Thank you for pointing out that, when properly parsed, your comments were essentially meaningless.

  29. Sharkey,

    I wrote that the landlords for whatever reason don’t want to accept the lower rents. I wrote that one possible factor is the impact of rents on property value.

    You came back in reply to chastise me for failing to consider that the landlords might not take lower rents because (in part) of property value worries.

    So, to be clear, I wrote, in part, that “X” is the case. You then flamed me, in reply, faulting me for not mentioning “X”.

  30. Have you ever heard of price fixing? It’s not much of a stretch to imagine that some of the big players in the Berkeley real estate market are keeping properties empty so that they can maintain prices rather than risk deflating the overvalued retail market in this city.

    I don’t have access to the links right now, but I believe you are listed as a moderator for other sites for discussing Berkeley events (specifically Berkeley Daily Planet articles) where participants must use their real names. It seems a bit hypocritical for you to want to be identified by the “Bruce Love” pseudonym.

    Do you still write blog roundups for the Berkeley Daily Planet?

  31. re: social engineering

    If I could draw like Pat Oliphant:

    The scene: The kid’s steam train in Tilden.

    Squeezed into the little cars are Berkeley’s most recognizable professional citizens. The stalwarts of our forty plus boards and commissions, from the the rent board to the ZAB, BAHA to the Creeks Task Force. All are wearing stripped engineer’s caps, squirming impatiently. The side of the train reads “Social Engineers of the Future”

    The elderly Engineer (w/ oil can, stripped cap and matching overalls), stands at the front, towering over the steam engine and his antsy passengers. He’s exasperated…

    “HOW MANY TIMES have I said it…EVERYONE will get a chance to blow the whistle! Board members with City paid health benefits, you’re first…”

    In the corner, the little penguin asks “How much of this would be possible without rent control?”

  32. My subjective impression is that there is now more small commercial space now in Berkeley than ever before. Most of the higher density, multiple story residential buildings built in the past 10 years have new commercial spaces on the ground floor. This would be even those buildings built on lots where no small commercial or retail spaces existed previously. If you walk up University Avenue from the train station to downtown, you will see a fair number of new retail type spaces. And I know they didn’t tear down many similar existing spaces to build the residential units.

    It has become a bit of a dogma that higher density developments ought to have ground floor commercial spaces. But I’m not sure that this always makes a lot of sense in that the demand for such spaces may not exist and may never exist in every location that housing is built. In the mean time, it increases the competition for landlords of older, often much older, spaces.

    This makes it even more puzzling that the landlords won’t reduce their expected rents on older spaces. The newly built spaces aren’t going to disappear from the market in the forseeable future.

  33. The proof that it isn’t worth it to the landlords is to go and offer them much less than they are looking for, and that low offer with no extra sweeteners or coercive force 🙂 …. and they’ll likely turn you down because it isn’t worth it to them.

    To rent out space at any price (low or high) is to (a) incur some extra expenses associated with the tenant being there; (b) feel some related financing impacts e.g. a change in property value, change in access to credit, etc.

    If a rent offered makes sense relative to those expenses I can’t see any of those guys turning it down. Ergo, (informal reasoning, sure), the market price rent of those long term vacancies is below a level it makes sense to bother renting them.

    (Also, I prefer “Bruce,” if you please.)

  34. Berkeley could definitely do with a few more brew pubs of the same caliber as Triple Rock. Solano would be a good location for one.

  35. Same amount of space but I am right with you where you write “The market does not support as many types of businesses as in the past.” I think that that is an understatement.

    You wrote:

    I might conjecture that more food related renters (restaurants, cafes, to-go places, etc) would increase the vitality of the corridor and presumably draw and support a more diverse collection of retail establishments.

    I originally was going to write that either there is way too much retail space or else not nearly enough nightlife.

    The region is lousy with good restaurants. Not just Berkeley. Not just the East Bay. The greater San Francisco Bay Area is just over-saturated with good restaurants.

    The only hope I see for a “destination” street in either of these districts is a large (and probably largely unwelcome) increase in nightclubs (performances, dancing, beer and booze, etc.).


    What role can a city play in encouraging landlords to find people to fill the spaces, as opposed to reprimanding them for not doing so? Beyond what the city is proposing in the post above.

    I’m not yet sure I like it but I tentatively think that the zoning liberalization for “office retail” is a step in the right direction. My reasoning is along the lines that:

    Instead of late night bars and loud music and such, encouraging the conversion of some of these retail spaces to office use has the beneficial side effects of:

    * reducing the supply of vacant retail space AND

    * increase local demand for retail uses (office workers eat lunch, etc.)

    So, they might actually be on the right path with that one. Maybe downtown turns into a place where there are some “prestige” offices for the public face of various firms, around which there’s a better balanced general purpose retail market.

  36. Does Berkeley have a vacancy ordinance? There’s at least some precedent for that.

    T.L.: “To rent, landlords would evidently have to lower their prices so much that it is no longer worth it to the landlord to actually rent the place.”

    Proof, please? I don’t necessarily disagree, but you seem to be making a lot of assumptions on your way to your conclusion that we have too much retail space in Berkeley.

  37. Is there more retail space today than in the past on Solano? And by retail do you mean retail outlets, services, restaurants, etc?

    It is indeed a long corridor. Tough to find the right balance of a broad selection of renters without too much duplication. The market does not support as many types of businesses as in the past. I might conjecture that more food related renters (restaurants, cafes, to-go places, etc) would increase the vitality of the corridor and presumably draw and support a more diverse collection of retail establishments.

    What role can a city play in encouraging landlords to find people to fill the spaces, as opposed to reprimanding them for not doing so? Beyond what the city is proposing in the post above.

  38. Well, somebody’s gotta say it. I still can’t believe an enterprising member of the state legislature hasn’t gone after Prop 13 Commercial. There’s a ‘vacancy tax’ for ya…

  39. Lowering market values is a bad thing to the current owners. But sure, to potential real estate buyers looking for bargains they would love to buy cheap properties with the expectation that they will increase in value or that the rent income will provide the investor with an ongoing cash flow.

    I don’t think the current landlords have the broad picture that you portray in mind. Sure, they would love for Solano to have a good mix thus adding overall value to all properties, but each individual landlord is surely not willing to be the one to take the hit and lower their rents in order to appeal to a broader selection of renters.

  40. I think you have the broad outlines of the market failure about right. A couple thoughts:

    Vacancy tax: I can’t swear to it but my recollection from last time I looked into it was that Berkeley has no legal authority to impose such a tax. Municipalities can tax or fine blight – but well kept vacancy doesn’t count as blight for that purpose. Municipalities can bargain for voluntary vacancy penalties as a condition of something like a variance – but that doesn’t apply to any of these retail corridor vacancies. Basically, sitting idle is a pretty unshakable by-right use — the City doesn’t get to hold a gun to landlord’s heads telling them to lower their price.

    Overbuilt: The prices don’t fall because of a market failure but the large number of vacancies proves that supply is much too large for demand at anything close to these prices. To rent, landlords would evidently have to lower their prices so much that it is no longer worth it to the landlord to actually rent the place. (What determines what is worth it to the landlord? A combination of marginal increases in operating expenses for the tenant and the impact the rent price has on the financial leveraging of the property.)

    In other words, the evidence is that it costs more to rent these spaces out than to keep them vacant, at the rents people are willing to pay today. We have too much retail space in these corridors.

  41. You say “lowering commercial property values” like it’s a bad thing. Currently commercial property values are so elevated that current property values only tolerate high margin retail operations like expensive restaurants, small fast food operations, alcohol sales, and women’s clothing/fashion. The key to the long-term viability of a commercial district (and our city, which is dependent on that viability) is an economic variation that encourages round-the-clock, round-the-year, mixed usage. Just like any other farm, if a commercial district suffers from monoculturism, the long term viability of that commercial district becomes dangerously vulnerable to fluxuations in the market — yogurt one day, cookies the next, coffee to follow brewed-beer the day after. We’ve seen these retail fads come and go, and such businesses are a delightful addition to a thoughtful mix. But when Peets and Starbuck and Tullys and Royal Cafe all serve fresh-brewed coffee in the same neighborhood, all they do is drive the rents sky high and each other into the ditch while reducing the long-term economic viability of the neighborhood. Folks need a place to buy fresh vegetables, underpants and socks, garden tools and household goods. Folks need a local bookstore and local pastry shop and a local office/school supply store. If the rents get too high than all you’ll be able to purchase are high margin items sold by national chain stores and similarly bland fast foods. One of the godsends of this current economic downturn was that Berkeley wasn’t too dependent on national chain sales, which have all taken huge economic hits. Keeping it small and personal and local isn’t just a trendy north Berkeley idea, it’s the key to our long term economic success.

  42. You have an excellent point about the undue amount of influence some landlords have as a result of the limited number of players in the Berkeley commercial retail market, but why would you doubt that Peter lives in Berkeley?

    Just because someone decides to make Berkeley their home doesn’t mean they aren’t allowed to think this town is downright stupid sometimes.

  43. I agree completely.
    Some of the vacant spaces people are talking about are just too darned big for Mom & Pop stores these days.

    Unless it’s split into several smaller areas (at great expense to the property owner) a space that’s 20,000 square feet is most appropriate for a retailer like Target, Crate & Barrel, or World Market than some eco-minded organic sandalwood shoppe.

  44. Ah, Peter,
    It’s fun to see the good ol’ “reductio ad hitlerum” response in it’s ‘Soviet-Menace’ variant. I’m please to see a thoughtful dialogue occurring. Frankly, I don’t think Berkeley is a ‘stupid town,’ anymore than I think you actually live in Berkeley.
    That said, Adam Smith’s ‘Invisible Hand’ only works when resources aren’t monopolized. In that there are too few landlords in Berkeley (ie too many commercial properties are owned or controlled by too few operators), Adam Smith’s economic model simply doesn’t work. Personally I also resent that my tax dollars are being wasted on tending to the maintenance responsibilities of neglectful property owners. Each of the hundreds of vacant commercial properties in Berkeley today adds to the burden being placed on our limited municipal resources. It’s way past time for those property owners to pick up the civic burden their invest schemes places on our community.

  45. This “service fee” would likely have the net result of lowering commercial property values (because investors – and they are indeed investors – would not want to own property with such restrictions and potential costs) and could cause some landlords to let someone/anyone rent the place just to avoid the fees. Those someones/anyones may not be the kinds of businesses that we actually want. And perhaps such fees could be written off come tax time anyway canceling out any intended effect to the local community.

    It’s just a different form of control than the current quotas/permit processes that cause the problems we have today.

    The simple need is to reduce the friction of opening a new business in Berkeley. Hopefully, the city council will do that very soon.

  46. While I think that a narrowly targeted and sensitively designed vacancy fee has some potential to have positive effects, I feel Berkeley is trying to have its cake an eat it too. We layer on quotas, restrictions, and requirements, combine it with an overpopulation of nitpickers, and then wonder why we can’t fill vacant storefronts.

    Many in Berkeley seem to want the restoration of a 1950s, Main Street American streetscape–but this isn’t coming back. Rather than single-mindedly seeking to punish property owners for failing to live up to this fantasy, we should endeavor to create a 21st century vibrancy.

  47. Three months is too short, but something more along the lines of nine months would be fine.
    Add in some exemptions for “difficult” properties (over-sized, specialized, etc) and I think something like that could be a real winner.

    Seeing prime retail sit vacant for *years* is galling.

  48. I’ve always found it bizarre how some Berkeley residents actually complain about stores in the city that are regional draws.

    What most communities would be overjoyed to have, we still find some way to complain about.

  49. While I agree that commercial rents are likely too high for the sort of retail we’d like so see, I view this from a very different angle. First of all, I think it’s very important to point out that the changes relating to restaurants do not involve changes to quotas. This means that there would be no new proliferation of restaurants; instead, new restaurants within the limits of the quota would have an easier time establishing themselves.

    As far as retail goes, I don’t see a great deal of either local-serving or region-serving stores coming into Berkeley. I think most of us would jump for joy if we could get a store that were a regional draw to locate here–except we want it to cause no traffic, have no parking (bicycle excepted), not be a chain, employ only union workers, not compete with any local businesses, sell a green product, and generally have no negative impacts on anyone or anything anywhere. In other words, regional draws are pretty much out. I, too, would love to see more mom-and-pop retail, but getting a permit for that ain’t exactly easy either. We would also have to convince everyone to pay higher prices and stop leaving Berkeley to do their shopping. And if you think that’s easy or realistic, I have some land on Jupiter I’d like to sell you.

    The city could charge vacancy fees all it wants, but if we don’t put our money where our mouths are by either spending locally or by easing some of our demands, we’re unlikely to see the retail vitality we dream of.

  50. About time. We need a less regulation in this stupid town. Let the market set the rent and let useful stores and businesses thrive.

    Fred, you approach didn’t work in Eastern Europe, why would it work here?

  51. This should be called the Landlord Dream Bill. If these changes are enacted expect to see higher commercial rents, more restaurants and alcohol providers and more non-retail operations in retail districts. Expect to see fewer neighborhood services and institutions and more shops catering to out-of-area shoppers. Imagine Chestnut Street in San Francisco for a visual reference. Berkeley’s main problem in its numerous commercial districts, which are almost uniformly doing worse this year, is that the rents are too high because there are too few landlords who control too much property (monopolies). As Dave Ruegg (Property Development Inc and Rue-Ell Enterprises) informed the former owners of Black Oak Books, he wasn’t willing to lower Black Oak’s rent because then all of his tenants would want lower rents. This sort of reasoning allowed his investment company to keep the former Tower Records retail space on Durant Ave., right off Telegraph (over 20,000 square feet as I recall) empty for most of a decade! Berkeley’s residents and voters need to understand that the two main revenue streams for the city of Berkeley are retail sales taxes (bye-bye to those for every office or service that moves into retail space) and real estate transfer taxes (which should not be affected by this change). The net result? Fewer revenues for our expensive services for every office and service industry that replaces retail sales in our commercial districts. A better solution? Charge landlords a substantial service fee whenever their properties are allowed to sit vacant for more than three months. This service fee should cover the loss of tax revenues and local employment opportunities and it should cover the substantial additional costs to the city for increase police, fire, public works and social services incurred when landlord’s ‘blighted’ vacant properties are allowed to sit unutilized for years and even decades.