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Statistics Show Wide Disparities in SF Business Closures By Neighborhood

  • Data released by the SF Chamber of Commerce show vast differences in the rate of business closures by San Francisco zip code

  • South of Market (94103) and Financial District (94108) have the highest percentages of businesses closed, at 88% and 81% respectively, while Castro/Noe (94114) and Outer Sunset/Parkside (94116) have the least closures, at 38% and 39%.

  • Sustained foot traffic, a high density of remote workers, and new programs like Shared Spaces have helped to shore up many neighborhood businesses in COVID-19

Among the many ways the COVID-19 pandemic has caused devastation, it has been an unqualified economic disaster. According to Yelp’s Economic Impact Report from the end of August, more than 163,000 businesses nationwide have closed in the past six months. Of all the large metro areas experiencing similar fallout, San Francisco has the unfortunate distinction of having the second-most closures per capita, behind only Honolulu. As of August 31, Yelp marked 6,229 businesses permanently closed in the San Francisco metro area.

Even some of the city’s most storied retailers and beloved restaurants have struggled to stay afloat since San Francisco shut down in early March due to the COVID-19 pandemic. As reported by Hoodline, both It’s Tops Coffee Shop and Miyabi Sushi closed this summer after many decades of serving the local community (and more than a few tourists).

But when it comes to independent business closures, some areas of the city are faring better than others. New statistics released by the San Francisco Chamber of Commerce, which track of credit card transactions in the final two weeks of September, offer some indications about the health of certain retail corridors and merchants operating in those areas.

In the 94114 zip code, covering the Castro and Noe Valley areas, the total closure rate was 38% — the lowest closure rate in the City. The Chamber’s stats are based on whether there were credit card transactions recorded by a particular merchant in the previous two weeks. If there were none, a business is marked as closed.

While not a perfect measure, the data suggest a mix of conditions that have helped neighborhood businesses stay afloat.

One aspect of the Castro’s ability to weather the economic storm seems to simply be sustained foot traffic in major thoroughfares and locals continuing to choose to venture out.

“My experience as a Castro resident is that the neighborhood street life is as vibrant as before the pandemic,” said California State Senator Scott Wiener, who was previously the Supervisor for District 8, which includes the Castro and Noe. “Every time I’m out in the neighborhood, there are lots of people walking around. The outdoor restaurant and bar seating is often full, and people are going into stores.”

Sharky Laguana, president of San Francisco’s Small Business Commission, added that remote work has shifted some activity that would normally happen downtown to people’s home neighborhoods.

“You can’t say things are great — small businesses are suffering — but one of the things that’s contributing to resilience in certain neighborhoods is that people are staying close to home,” he said. “Instead of going downtown, if they have to eat lunch or run an errand, it’s happening closer to home. So some of those neighborhood businesses are busier now.”

Neighborhoods with relatively few closures — such as parts of the Outer Sunset, which have a closure rate of less than 40% — are likely to have a high density of remote workers who haven’t lost significant income and are still spending, Laguana added.

The Castro-Noe also has two Slow Streets, which are streets open to cyclists, pedestrians, and only to local vehicular traffic. Within the 94114 ZIP code, these include Noe Street from Duboce Ave. to 18th Street, as well as Sanchez Street between 23rd and 30th Streets.

So far, the impact of Slow Streets has some locals and merchants split. A few restaurants reliant on income from takeout orders have reported additional sales slumps, due to the additional difficulty for delivery drivers to reach their establishments.

Castro business owners have also experimented with Shared Spaces in certain corridors. This city-administered program offers another means through which merchants, including restaurants and retailers, can utilize sidewalks and parking and transit lanes for outdoor operations. For example, during select Sunday hours in August, two short sections of 18th Street were closed to vehicular traffic. As Hoodline reported, reactions to the trial run were mixed due to crowding concerns and some participants’ lack of compliance with safety protocols.

Nonetheless, advocates of Shared Spaces describe it as a lifeline for local businesses.

In a report released last week, San Francisco’s Economic Recovery Task Force issued 41 recommendations to mend some of the economic damage caused by COVID-19. Among them was a recommendation to extend the Shared Spaces program through 2023 to give small businesses an opportunity and incentive to build outdoor operations.

“That will give businesses some degree of certainty to invest in making a nice shared space that is attractive for people to visit. And it will benefit the whole city,” Laguana added. “In some of the outerlying neighborhoods, the foot traffic is not the same. We need to give then a reason to invest in outdoor spaces.”

While a 38% closure rate may seem high, compare that with pockets of SoMa, the Financial District, and the Embarcadero, where closure rates during the last weeks of September were between 81% and 88%. With tens of thousands of individuals who used to commute to those areas now working remotely, foot traffic has significantly decreased, with downtown retailers reporting 70-80% declines in revenue, according to the San Francisco Chronicle.

While no retail corridor is in perfect health, those that seem poised to sustain this downturn contain a robust mix of housing and commercial spaces — and plenty of loyal locals. “To be clear, our neighborhood small businesses are suffering mightily,” Wiener added. “But many are staying afloat (even if just barely) because of the strength of this neighborhood.”


Image by Jake Buonemani
Image by Rasmus Gundorff Sæderup

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