Let’s Repeal the Ghetto Tax

555 Fulton was approved by the Planning Commission last week. It contains a ground-floor grocery that could eliminate the “ghetto grocery tax” for at least one neighborhood. What will the Board of Supervisors do?

At issue is the developer’s desire for a ground-floor grocery store. The affluent of San Francisco have banned “formula-retail” chain stores, so a variance/exception will be required if there is to be a grocery store at the development.

While I applaud the spirit of a formula-retail ban (I voted for it in 2008, I think), the fact that we are even debating banning a grocery store from an economically poor neighborhood appalls me!

(site/neighborhood photos taken in October of 2013, click any image for a larger version or slideshow):

Poverty and Access to Basic Services:

This is a social justice issue. We aren’t talking about whether or not another coffee shop should open in the Castro, or whether or not we should allow another CVS when a Walgreen’s is almost right across the street. The recent approval of a CVS in the Castro (near 4 or 5 other chain drug-stores) while a proposed nearby Starbucks was denied (because it was near 4 or 5 other coffee shops) shows the rather subjective enforcement of our formula-retail ban.

What we are deciding is whether we can open a grocery store in a historically underserved and economically poor neighborhood. There are no “independent” grocery stores (i.e., non-chain and therefore allowed in the space) that are interested in the space. One of those independents (Andronico’s) is struggling, and their grocery costs are (in my experience) more expensive than Whole Foods. So the idea that there is a viable independent grocery store that wants this space but can’t have it is a blatant falsehood.

I also know that the homes above the grocery store will be expensive. New housing in San Francisco is expensive, and the reasons for that are far too many and too long to be addressed here. But regardless of the cost of the homes above it, a grocery store at 555 Fulton will be a source for reasonably-priced groceries (including fresh fruit and produce) for all of the surrounding neighborhood(s).

When deciding whether or not to approve 555 Fulton, the San Francisco Board of Supervisors has a chance to repeal the ghetto grocery tax for at least one neighborhood. I believe that they should. If you aren’t familiar with it, the “ghetto tax” is a term that refers to the fact that the urban poor almost always pay more than wealthier citizens for basic goods and services. Why? Because being economically poor doesn’t suck enough….

For example, a 2006 report by the Brookings Institute found that:

Grocery stores in lower income neighborhoods tend to be smaller and more expensive than in higher income neighborhoods. The average grocery store in our sample of 2,384 lower income neighborhoods is 2.5 times smaller than the average grocery store in a higher income neighborhood. Also, there is about one mid- or large-sized grocer for every 69,055 residents in lower income neighborhoods, half the availability found in other neighborhoods. Access to only small grocery stores results in higher food prices for lower income shoppers. In particular, over 67 percent of the same food products in our sample of 132 different products are more expensive in small grocery stores than in larger grocery stores.

Is 555 Fulton in Hayes Valley (wealthy, white) or Western Addition (not-wealthy, not-white)?

The 555 Fulton site is located on the edge of the Western Addition and Hayes Valley. On a real estate map, the property is located in Hayes Valley, although it is a block away from SFAR’s definition of Western Addition. Various city groups map various areas differently, as I’ve written about before. While it may fall in Hayes Valley on a real estate map, the site is across from several housing projects, and the immediate area has a very different feel from the “Hayes Valley” of Patricia’s Green. It is, in short, an economically poor area.

According to a SF Planning 2011 document, in the Western Addition 14% of the residents live in poverty, and the annual household income is about $54,000. According to the same document, the average annual household income in San Francisco is just over $70,000 and the poverty rate across the city is 11%.

About Our Formula-Retail Ban:

From the Institute for Self-Reliance comes a pretty brief summary of our policy that was enacted in 2004 and strengthened by ballot measure in 2008.

Since 2004, San Francisco has restricted formula retail and restaurant uses.

Throughout most of the city, including all of San Francisco’s Neighborhood Commercial Districts, formula retail stores and restaurants are considered conditional uses. This means they must be approved by the Planning Commission on a case-by-case basis.

The law specifies that the Planning Commission must consider the following factors when deciding whether to approve a formula business:

  • the existing concentration of formula retail businesses within the neighborhood,
  • whether similar goods or services are already available within the area,
  • the compatibility of the proposed business with the character of the neighborhood,
  • retail vacancy rates in the area, and
  • the balance of neighborhood-serving versus citywide or regional-serving businesses.

The city’s regulations define a formula retail use as an establishment that shares common features, such as a standardized array of merchandise, trademark, architecture, and décor, with at least 11 other establishments in the United States. The term “retail use� includes both stores and restaurants.

Formula uses are prohibited entirely in a few neighborhoods, including North Beach and Hayes-Gough.

What are your thoughts on 555 Fulton?

Divisadero Street – from Zero to Infinity

One of the things I love about San Francisco neighborhoods are how wildly they vary. Say what you will about San Francisco, our neighborhoods each have a unique character, charm, and style. And while The Marina might feel like it is a thousand miles away from the Western Addition, they both have Divisadero Street in common. I’ve been wanting to drive some San Francisco streets from start to finish (or finish to start) to give you a sense of how much things can change along one street in just a few blocks.

This morning I tackled Divisadero Street, which starts in the Buena Vista/Ashbury Heights neighborhood – that’s district 5F if you are playing along at home with a SFAR MLS map – and ends at Marina Boulevard in the Marina District.


Divisadero Street runs through or touches the border of all of the following neighborhoods (I’m going to go in the order you see in the video, which actually starts at the end of Divisadero and works back to the zero block). If you are curious about learning more about any of the neighborhoods, follow the link, I’ve made videos for many (but not all) of them:

I really enjoyed making this first video of a street in San Francisco from start to finish. What other streets would you be interested in seeing from beginning to end? I’ve definitely got Folsom street on the list, but I’m sure there are plenty of other streets that would make for a fun video. I hope you enjoy watching the video, feel free to leave your comments, critiques, and suggestions below.

1242 – 1244 Pierce St.

Yesterday we wrote about an amazing Glen Park single family home (already in contract!), but today we are going to switch gears a little bit and write about a sweet two-unit building in the Western Addition. The property is 1242 – 1244 Pierce St.between Ellis and Eddy streets.

1242 – 1244 Pierce St., image courtesy of Patrick Lowell

The upper unit is a nicely done two-bedroom, one-bath flat that has been nicely remodeled and will be delivered vacant. The lower flat is a one-bedroom, one bath flat that is currently tenant occupied. There is a large and sunny rear year that both flats have access to. As I’m sure you’ve noticed from the picture, there is no parking for the building, which is a bummer. On the upside, though, the building may qualify for the TIC lottery bypass, and it might just be a great candidate for condo conversion.

While some of you might hear “Western Addition” as the location and tune-out, in a lot of ways it’s a sweet location. It is just a few steps from the redone Kimbell ballpark and soccer fields, and the Fillmore Farmer’s market is about a block away.

1242 – 1244 Pierce is also very close to the Divisadero corridor, so for those of you that purchase a home based on proximity to the tech shuttles, you aren’t far from any of them that make stops along the Divisadero corridor. Plus, Little Star Pizza isn’t far away, and how can you not like that?

I am not the listing agent for the property – that lucky individual is Patrick Lowell, a fellow Zephyr Agent.  He’s a sharp guy who has a GRI just like me, and here’s a link to his website. This property appears on our blog courtesy of Patrick Lowell – thanks for letting us write about your two unit listing! If you are interested in seeing this property and don’t have an agent, please drop us a line. If you aren’t ready for that kind of committment, though, we totally understand – you can find an open house schedule on the property website.