Barely a block away from San Francisco’s historic Union Square sits a lonely and vacant storefront with a simple note taped to the window that speaks volumes about the challenges faced by cities all over the world.
“Guapos and Guapas,” the note starts, “Thank you for 35 great Years of memories! Love you all! Gracie — La Guapa.”
Guapos/Guapos is a Spanish term of endearment that translates roughly into “handsome” people. Other than the implication that the note was written by someone named Gracie, on behalf of a business that survived for more than a third of a century, there are no other hints about what once lived in that storefront.
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San Francisco — like Winnipeg and cities all over the world — is still struggling to recover from the worst of the global pandemic, and core-area businesses have shuttered.
No sign above the door, no obvious signs of any furniture or equipment inside could be seen through the plastic sheeting taped to the window. Even a thorough internet search did not reveal what business resided there, or when it closed, or why.
On the last point — why — we can easily extrapolate. San Francisco — like cities all over the world, including Winnipeg — is still struggling to recover from the worst of the global pandemic.
As sheltering at home became necessary, people stopped going to work in downtown offices, were prevented from attending public events or dining in sit-down restaurants or drinking in bars and clubs. Absent of workday activity, homelessness, mental-health issues and addiction prospered.
San Francisco is, by some estimates, one of the hardest-hit cities in North America. If that’s true, it’s largely because it had so far to fall.
San Francisco’s previously overheated economy was fuelled for many years by the head offices of high-tech companies that built office towers and sprawling campuses downtown. Dense, residential development followed and, thanks to the gratuitous salaries being paid to the tech workers, rents and property values soared. Billions of dollars were invested in public amenities to serve these downtown dwellers and the millions of tourists who flocked to San Francisco to ride trolley cars and marvel at the rapidly changing weather.
And then, COVID-19 pulled the well-appointed rug out from underneath this city.
The tech companies told their employees to work from home, and many took it as an invitation to escape San Francisco’s outrageous cost of living. The tech companies put up little resistance to remote work, realizing they no longer had to pay cost-of-living bonuses to attract skilled workers.
As people fled the city, downtown businesses closed. Even now in the city’s popular Union Square district, shops featuring the world’s most iconic luxury brands — Armani, Ferragamo, Saks, Valentino, Louis Vuitton, Dior, Cartier, Dolce & Gabbana — are separated by long strings of empty storefronts.
In 2022, Columbia business school economist Stijn Van Nieuwerburgh wrote a paper that attempted to put a name on what San Francisco and other cities were facing: the urban doom loop.
In short, Van Nieuwerburgh hypothesized the collapse of commercial real estate and an absence of people working in downtowns would trigger a corresponding collapse in retail and service businesses, which would, in turn, lead to less tax revenue for local governments to combat growing crime and homelessness that prospered as the core emptied out.
To some extent, all major cities are trapped in some degree of doom loop. Although, it’s important to note that as an economist, Van Nieuwerburgh was concerned only about identifying the economic trends; he spent precious little time talking about the urban-planning policies that are needed to take cities out of the predicament.
What, then, can cities do? Again, San Francisco can be instructive.
Mayor London Breed initiated a program called “Vacant to Vibrant” which offers carefully selected small businesses the opportunity to open downtown with six months of free rent and financial support for other start-up expenses. The costs of the program are shared between the city and corporate partners.
The program has been somewhat controversial but the results have shown promise.
An astounding 850 business applied for 17 slots in the program’s first iteration last year. Of those, 11 signed leases beyond their subsidized six-month period. The city has already committed to a second cohort.
At the same time, the city is working with tech companies to lure workers back downtown. Although few have opted for a full-time return to office model, hundreds of companies — including some of the biggest downtown tenants, including Salesforce and Microsoft — have nudged employees into hybrid schedules that see workers in their offices at least a few days each week.
There have also been concerted efforts to convert empty commercial real estate into residential units, and to take a more proactive approach to helping the homeless and people suffering from addictions and mental-health issues.
Some of these efforts have involved aggressive removal of encampments, which has drawn enormous criticism from non-governmental agencies trying to help the homeless.
Can San Francisco teach Winnipeg anything about our own situation?
The problems and solutions in both cities are not unique. However, there is a resolve ringing from the voices of civic leaders in California that should stir the hearts of Winnipeg’s downtown advocates.
We are not destined to remain in a doom loop. Not if we fight for our downtowns.
dan.lett@winnipegfreepress.com
Dan Lett
Columnist
Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986. Read more about Dan.
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