Gentrification and the local Restaurant Industry
- Annachiara Barreto-Grigno
- May 1, 2018
- 3 min read
Updated: May 14, 2018
by Anjelica Gaufo
Imagine you’ve planned for weeks to treat yourself to your favorite San Francisco restaurant, just to walk up to the door and see they’ve been closed, permanently. This disappointing event happened to student, Dylan Givens, who planned to take his mother visiting from Los Angeles to eat the meal he’s obsessed with, duck pappardelle at Panta Rei, an Italian restaurant that used to reside in Telegraph Hill.
“I tried to call, and I googled it and it said closed permanently," reported Givens. "I went there a month before, but had I known that it was going to be my last time eating there, I would’ve gone all out.”
In San Francisco, it’s not rare to bump into someone who has lost their apartment, but now it is also common to see restaurants losing their place as rent gets higher and higher.
As gentrification takes its toll on the Bay Area, we say goodbye to many locally owned businesses that called this place their home, shifting the food scene in the blink of an eye. 2017 saw the largest amount of restaurant closures within the region that is home to the “best food city ever” with over 60 closures . Restaurants are struggling to keep their spot as the chain reaction of rising rent costs causes a demand for higher wage. And as employees start to move out to cheaper cities because of rent, it becomes a pain to hire employees. Those who cannot survive the inflation that is catching up to their business profits often become replaced with more expensive restaurants whether they are a small mom and pop shop or an iconic restaurant. An employee at Red’s Java House explained that because they are a landmark, they are federally owned and don’t pay as much as those just across the street. Places owned by the city of San Francisco are a completely different story.
David Hanna, General Manager of Tadich Grill in the Financial District, gives his insight about what it is like to run a restaurant in San Francisco as Tadich Grill is known to be the oldest restaurant in the city.
Because the Grill bought their building back in the 80’s, their rent is pretty much nil and owning is very different from renting. However, they have seen restaurants come and go. As Hanna puts it, “it's really a shame when you have a great long standing restaurants or bars for that matter that have been pushed out...I guess you lose a little bit of your soul.” As this happens, the city starts to lose its unique eateries, it also loses their historical value.
For places that must comply to the Bay Area’s inflation, it is a struggle to get customers to agree to new menu prices. According to Gwyneth Borden, executive director of the Golden Gate Restaurant Association, customers should be aware of the hardships that come with running a restaurant and how troubling it is for them to obtain a profit when customers are not willing to pay more for their meal. It is not enough to settle prices based on labor and food costs when the margins they receive don’t correlate.
Fortunately for the Tadich Grill, they can maintain their prices as they don’t owe much, although Hanna says, “For other places that have a high rent, I mean it's a part of doing business. You have to kind of build that into your model if you're going to be opening a new place going and you have to know that you're going to be [paying] X [amount for rent] and if you don't meet that you can be closed pretty quickly.” The model for table-service restaurants has changed drastically and pushing restaurants to the edge, which then pushes customers to pay more for their dining experience. Hanna, being a general manager for decades understands this as good as anyone,
“You're going to have to have money if you're going to be dining out whether it's a small little restaurant or a three star Michelin restaurant or a large chain restaurant. They are not going to absorb the cost of the rent - they're going to pass it on to their customers as well.”
- David Hanna, Tadich Grill
More and more cities are becoming gentrified and expensive. San Francisco is a basic model for these cities as it has been under this developmental state for years and is still going through an immense amount of change, which might even be a culture shock to those native to the city. The popular narrative involving gentrification is housing, but we should also think about the businesses that make each city unique and how they will also be affected. The Bay Area is known for having amazing food businesses, but we must not forget that this industry is just as vulnerable to rent and gentrification as anyone else.
Resources: http://0-infoweb.newsbank.com.ignacio.usfca.edu/resources/doc/nb/news/16237546F999E150?p=WORLDNEWS
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