South Congress is becoming a victim of its own success: fun stores like Terra Toys (which has been down there as long as I can remember) and Lone Star Illusions are losing their leases, presumably to make way for tenants that can pay usuriously high rents.
South Congress has, of course, become a happening area, especially with First Thursday. The landlords, no dummies they, see the high foot traffic, see storefronts being rented to trendy, expensive boutiques, and decide to cash in.
This will backfire. Squeeze the goose that laid the golden egg and you will kill it. I’ve seen this happen before.
I grew up in Lincoln Park, Chicago. When I was born, it was not a great neighborhood–not even a good neighborhood. It supported three kinds of businesses: gyros palaces (which had mysterious fires with great regularity), resale shops, and prostitution. Gradually, thanks to people like my parents moving in, the neighborhood was rehabilitated. Rents on Clark Street (the main commercial street in the neighborhood) rose and rose. By the time that my parents opened a shop on Clark in the early 90s, much of Clark Street’s retail space was owned by a handful of landlords; my parents’ landlord, Marvin Winkler, was greedy to the point of madness. He would rather leave a storefront sit empty for a year than lower his rents. He may have been an extreme case, but ultimately, the greed of the landlords was self-defeating. The rate of business failure was very high. Stores that were useful to local residents, like copy shops and cobblers, got priced out of existence (not that the residents could afford to shop in their own neighborhood anymore, as housing prices had also skyrocketed to the point where people spent all their income on rent). A large number of new business openings were poorly conceived nicknack shops run by people with no business acumen and less chance for commercial success.
South Congress today is successful because of the shops that are there today. There’s no magic pixie dust in the air there that creates success, it’s a vibe that those shops create that will not last long beyond their absence. The landlords owning the storefronts on SoCo can raise their rents to the point where only national chains can rent from them, at which point SoCo becomes a strip mall. Or where nicknack shops with clueless operators spring up and vanish like mushrooms after a summer shower.
After living in South Austin for over a decade, last month I moved north of the river. At one time leaving South Austin would have been totally traumatic, but now it’s just sad.
I’m a bit ambivalent about the topic. I live near South Congress, and I’m dreading the arrival of the Gap and Diesel and Joshua Tree.
At the same time, I wouldn’t have been comfortable moving into the neighborhood back when it was a center of prostitution and drugs.
Gentrification is a matter of perspective. When your parents moved into a seedy/bohemian neighborhood, the arrival of people with halfway-decent jobs pushed up property values and displaced people depending on low rent. Then the wealthy moved in and displaced the middle class.
Regardless of the way a neighborhood is changing — poorer folks moving in, or wealthier folks — people fret. From a 35,000 foot view, it looks like social change in a mobile society. When it’s your own neighborhood getting less welcome, it feels like decline one way or the other.
The market works its magic better if it’s not fettered by stupid stuff like zoning laws. The supply of street-level retail in that area is obviously too low (since rents are too high); but go ahead and try to open another shop out there – you’ll quickly discover that the city’s zoning code precludes anything _but_ strip malls.
In the pre-WWII market, Terra Toys would have been more likely to have had the option of moving into another location on the street (or even building one). Now, they can’t, because it’s impossible for single businesses to meet current zoning code (due to parking, mostly). This syndrome is a failure of too-zealous suburban-style planning; not of gentrification.
Let’s draw a distinction between good zoning and bad zoning: there is one. I agree that the city’s current approach to zoning is suburban/car-oriented, but I disagree that zoning changes could solve the problem of rapacious landlords. There could be some beneficial secondary effects, I suppose, but my experience in Chicago, where small businesses are not required to have dedicated parking (for example) suggests this is not the problem.
The complete absence of zoning is what gives us Houston, where (ahem) exotic-modeling salons appear on residential streets and no place has any sense of place. I don’t want to see that.
Houston, oy.
People always bring up Houston.
But Houston requires more parking than typical cities do (which tends to force people into the strip-mall mold); and deed restrictions and various utility restrictions end up providing de-facto zoning which is actually _more_ likely to act as a disincentive to non-strip-mall development than is the typically misguided suburban norm in places like Austin.
I don’t know enough about Chicago to say; but I _do_ know that there’s no way in a rational universe that Terra Toys should be required to provide any parking on a street with considerable parking capacity and very high capacity transit use. But that’s exactly what WOULD happen if they tried to be adventurous and buy one of the run-down properties further up or down the street.
OY from jamaica!
can’t get into my own blog (forgot the URL) so might as well just read your blog and respond to this post! That’s definitely sad to hear about Terra Toys and such, but i’m guessing the landlords may or may not be greedy. they may be falling victim to the scourge of usurious PROPERTY TAXES.