Sunday, December 14, 2008

The High Costs of Blight

Eight years ago the Office of the City Auditor published its findings on a citizen's survey of blight issues in Oakland. Not surprisingly only 32% of those surveyed at the time were even aware that the City of Oakland had a blight ordinance. Only 24% of the respondents rated the cleanliness of the City as being good to excellent. Only 21% of the respondents had reported a blight problem and nearly 50% of those who reported a complaint were dissatisfied with the City's response.

Several basic recommendations were made including a public information campaign to educate the public about the blight ordinance and shoring up the appropriate City departments that respond to blight complaints by making sure they are full equipped and staffed to handle the complaints in an efficient and expeditious manner.

We are not aware that any of the recommendations were taken to heart or that any specific outreach efforts have been undertaken by City staff. It is unclear to us why the City has not made a more concerted effort to invest in blight reduction. The reduction, control and/or elimination of blight is a significant missed opportunity for the City to invest in the stabilization and improvement of neighborhoods and reap the financial benefits. Relatively small investments in blight reduction by ensuring appropriate and efficient staffing and enforcement could have big dividends. Blight costs the City in significant ways. This includes:

  1. Lost investment opportunities. When looking to relocate prospective tenants, homeowners and businesses do not want to locate in areas that are rundown with blight and may choose other communities over Oakland;
  2. Foregone property taxes. Blight has a downward pressure on property values and the amount of property taxes the county is able to collect for blighted properties and neighborhoods is limited;
  3. Foregone transfer taxes. Blight has a downward pressure on property values and when properties transfer the properties are discounted because of blighted conditions;
  4. Increased costs to fight crime. Blight and crime inextricably linked and blighted conditions in our neighborhoods reinforce and support criminal behaviors and lawlessness that requires more significant crime suppression activities;
  5. Increased costs to fight fires and provide other city services. Blighted properties that are used as crack dens, homeless encampments and other illegal activities require more service calls to put out fires, clean up garbage, and eliminate graffiti;
  6. Lost tourism dollars. Many of those living outside of Oakland perceive our City as blighted and overrun by crime. Consequently, they choose to take their tourist dollars to safer, cleaner communities; and
  7. Lost shopping dollars. Many residents, despite recent private investments, see downtown Oakland as dirty, blighted and unsafe. Consequently, they choose other easily accessible shopping opportunities in San Francisco, Walnut Creek, Concord or Marin that have more pleasant shopping environments.
While we understand and appreciate that there are many competing needs and demands for City services in Oakland, we are surprised that our elected representatives and City bureaucrats seemingly do not understand the significant costs associated with blight and have done little to implement the recommendations of the November 2000 City Auditor's report. Where is leadership when you really need it?


Fred Dodsworth said...

One of the unacknowledged sources of blight and despair in any community (quickly becoming epidemic in Berkeley) is the blight of empty storefronts all over the city's commercial districts. For every thousand square feet of unoccupied industrial/commercial/retail space, three persons are not employed! Increased vandalism, crime, homelessness and environmental degradation are a direct result. Empty storefronts are a direct result of obscenely high, unaffordable rents. It's time for Oakland and Berkeley to start billing the landlords (many of who have monopolized too many buildings) for the additional municipal costs and for the additional substantial social burdens vacant properties inflict on our communities. The fees (not taxes but direct user fees) should be both substantial and punitive. When it's too expensive to keep these properties vacant, rents will drop to reflect their actual, rather than monopolized, values. Call you representatives today and demand that the city charge landlords and property owners for these social costs.

J Lehr said...

Great posts.. ran across yoru blog from a link on Daily Kos. Anyways fellow Nor Cal political junkie here..

Rising Blue Tide

Fight Blight said...


While we are concerned about the high cost of commercial rents and unoccupied storefronts, we do not necessarily believe the cause is largely related to obscenely high, unaffordable rents. Business owners in general, even those with a limited monopoly, are not interested in maintaining vacant properties as there is a carrying cost with all properties and there is no profit in vacancies. In downtown Berkeley we believe that the empty storefronts are related to: (1) the type of clientele that frequents downtown which is largely students with limited incomes; (2) the poor condition of downtown with graffiti, litter, homeless encampments, and marauding Berkeley High Students; (3) difficult parking; and (4) the economic downturn. Rents should be going down, but in this market there may not be many new businesses or existing businesses willing to open up or relocate to such marginal areas. We do agree though that empty storefronts further reinforce an image of blight.

The vacancy trends you are talking about began well before the recent economic implosion. In other areas such as the Gourmet Ghetto, Elmwood, Rockridge etc, there are few vacancies. Higher densities of residents with relatively higher disposable incomes coupled with cleaner sidewalks and streets largely devoid of homeless people and marauding teenagers make these other areas attractive. The City of Berkeley and Oakland should take note and clean up their downtowns, provide affordable and convenient parking, establish and enforce curfews for marauding teenagers, and saturate the areas with beat cops and bicycle cops. Just then you might attract 30 and 40 somethings that have disposable income. Otherwise, many are content to jump in their cars and head to Emeryville, San Francisco, Corte Madera or Walnut Creek to do serious shopping in a clean and safe environment. As other cities have done, Oakland and Berkeley should also focus on turning their downtowns into entertainment districts with restaurants, coffee shops, nightclubs, bars and comedy clubs rather than envisioning them as traditional commercial centers.

Fred Dodsworth said...

Hi Fight Blight.
I would beg to differ with your statement that empty storefronts aren't directly related to 'obscenely high and unaffordable rents'.
The only reason the former Radstons building on Shattuck is still empty is because the landlord raised the rent beyond what longtime tenant Radstons Office Supply could pay. The city of Berkeley lost as much as $400,000 a year in retail tax revenues and more than a dozen jobs when Radstons relocated to Hercules, California.
For a brief time Green City (an green urban infill development retailer) was allowed to occupy the space rent-free. They offered to pay a modest rent but the landlord (owner of the obscenely expensive Epicurious Garden) wanted them to pay 'current market' rates of $3.50 plus per square foot.
Those rates are only affordable by small fast food joints and/or women's clothing stores.
Similarly, Property Development owns the 25,000 square foot former Tower Records spot on Durant Ave that has been empty for years. The landlord/owner of this vile blighted crimespot told one of his other tenants he would never rent that location because no one would pay $3.50 plus per square foot for it, and if he lowered the rent there he would eventually be forced to lower the rents on all of his Berkeley properties, which would cost him more than the $87,000 per month he isn't currently getting on that space!
Similarly, the owner of Earthly Goods at Shattuck & Vine has kept the stores on both sides of him empty and blighted for years, simply because he doesn't need the income! (His parents bought the building years ago.)
There are hundreds of similar situations throughout Berkeley and Oakland, primarily because too much of this type of property is owned by monopolists who have owned these and other properties for so long they don't need the income!

This costs us, even here in the Gourmet Ghetto, by limiting the type of retail or office use available in our community.
Try buying men's clothing in Berkeley. While there are many, many women's clothing stores there are only two stores (Bancroft Clothing and Bill's Mens Shop) that carry even a modest selection of men's clothing in the entire city!
Further, in the last ten years too many food places in North Berkeley have acquired liquor licenses to help them meet their monthly rents. I see too many folks stumbling out of Cesars, Chez Pannise, Sauls, Chesters, etc, bombed on booze only to climb into their cars to drive back to Orinda. We don't need more fancy restaurants or liquor serving venues, we need common services and more jobs, and for that we need to bring rents back to reasonable levels.