Fancy San Francisco Neighborhoods Celebrate 10 Years of Hostility to Chain Stores. With More Hostility to Chain Stores.

starbucksGreenpin Chang / photo on flickrThe San Francisco Planning Commission is celebrating 10 years of making life tough for chain stores, by...making life a little tougher for chain stores. Under ordinances passed in 2004 and amended in 2006, national chains that want to open locations in large swathes of Baghdad by the Bay must undergo "conditional use authorization" vetting by the planning commission. In some areas, there are outright bans.

The rules haven't kept Starbucks and Subway out completely, about 75 percent of applications from chains are approved—though often after the city has extracted all kinds of concessions from the retailers. 

But now there are a dozen more proposals to amend the ordinance in the works. Salon explains the city's calculus this way:

Dan Houston, one of the founders of Civic Economics, stumbled into this niche in 2002 as he watched two independent Austin businesses, Waterloo Records and Book People, threatened by a city-subsidized Borders set to move in across the street. Houston’s young firm agreed to analyze the effects of then-powerful Borders sapping the market share of two local businesses.

The results were striking: for every $100 spent at a chain, approximately $13 remained in the local economy, largely through wages. For every $100 spent at the local outfit, $45 would recirculate locally, thanks to wages, corporate profits, locally oriented procurement, and potential future investment in the community, ranging from sponsorship of a Little League team to opening a second branch. The cost of a book or CD might be marginally higher, but the return for the city was nearly three times better at Waterloo Records and Book People. Borders didn’t move in.

Since then, Civic Economics has performed parallel analyses for other cities, including San Francisco, and obtained similar results. “The numbers were undeniable,” Houston said. “Nobody ever offers subsidies to the local bookstores — it’s crazy to think you’re giving subsidies to these non-local restaurants.”

Dan Houston is half right. It is crazy for a city to subsidize Borders—we all know how things worked out for that economic powerhouse. But it's just as nuts to offer preferential treatment (a kind of subsidy as well) to local businesses. It's crony capitalism in both directions. The question is just which capitalists have the more powerful cronies. 

While figures like Houston's are notoriously easy to fudge, let's assume they're correct. Even if that's the case, it's not clear why it's right to favor San Fran's municipal bottom line and Little League teams over other configurations of prosperity (that $32 doesn't just vanish into thin air) or consumer choice (perfectly homogeneous pumpkin lattes). 

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  • Neoliberal Kochtopus||

    The results were striking: for every $100 spent at a chain, approximately $13 remained in the local economy, largely through wages. For every $100 spent at the local outfit, $45 would recirculate locally, thanks to wages, corporate profits, locally oriented procurement, and potential future investment in the community, ranging from sponsorship of a Little League team to opening a second branch.

    As pointed out, this study is complete and utter horseshit. Did it take into account, oh, you know, THE MONEY SAVED by consumers?

  • ||

    I'd love to see how they calculated (I use that word loosely) what "remained in the local economy". Because both a big chain bookstore or a non big chain bookstore do the exact same fucking thing, hire essentially the same types of people, and have pretty much similar expenditures. So...how are they getting this difference?

  • Marc F Cheney||

    They probably assume that profits go largely out of town in one case (e.g. in the form of dividends), and get largely spent locally by local owners in another case.

  • Sevo||

    Marc F Cheney| 9.4.13 @ 6:20PM |#
    "They probably assume that profits go largely out of town..."

    "They" also have a warped idea of what profit means and how much an owner captures.
    'Companies make billions in profits!'; yeah a penny at a time.

  • Invisible Finger||

    So CalPERS only invests in local businesses?

  • Sevo||

    You're kidding, if course. Bastiat is a bad word in these parts.
    Anecdote:
    Lowes managed to pay off enough sleaze bags to put a store in a sorta rough section of town. Whines left and right! Gonna put us out of business!
    Anyhow, fast food joints in the area (some not chain) are doing fine; what used to be a bolt-and-nut hardware store across the street is now selling high-end appliances.
    Not that facts bother the twits.

  • Generic Stranger||

    Yeah; when a big box store moves in, the locals (well, the successful ones, anyway), respond by specializing. They fill niches that the big box store, by it's nature, can't. Hell, often completely new businesses spring up to get a piece of the foot traffic that big box stores bring to an area.

    I saw this in action in the small college town I lived in. The local Walmart remodeled and turned itself into a Super Walmart. Within three or four years, at least five new businesses opened in the immediate area, and none of the preexisting businesses shut down.

  • ||

    Walmart is a very solid anchor tenant.

  • Sudden||

    And there's a reason small business pays a premium to be among anchor tenants.

  • Death Rock and Skull||

    Its ridiculous how much ordinary shit I need, that Lowes, Wal-Mart, and so forth don't have.

  • Generic Stranger||

    Yeah, they simply don't have the floor space to carry EVERYTHING, and what they do carry they usually only have one or two brands, usually the lower-end stuff.

  • Killazontherun||

    Laws only allowing local ownership and control has a great deal to do with the wealth disparity in Mexico. And the same economic reasoning was applied there as well. SF is not my tromping ground, but I would expect to see former working class neighborhoods getting carved up to make way for a mix of slums and higher class gated communities resulting from the loss of buying power.

  • Nazdrakke||

    It's the progressive dream world.

  • Entropy Void||

    My hometown of Winter Park, FL is in the midst of doing this ... embarrassing ...

  • C. Anacreon||

    You've got that right. And everything in the Bay Area is now to be done by regional Central Planning. So former working-class neighborhoods (with-gasp-houses with yards) will be bulldozed to put in subidized "mixed use" stack and pack apartment projects, filled with low-income people on the upper floors, reserved for "pedestrian-friendly" retail on the first floor (and yes, you're correct, virtually every one of these projects everywhere have tons of vacancies on the first floor, though they were promised "specialty grocers," the politically-correct tenant every prog wants.)

    All done as if the high-rise "housing projects" disasters of the 60s and 70s never happened. I guess they didn't have the right people in charge those times.

  • Marc F Cheney||

    SF should end all trade with the rest of the world. That way, 100% of every $1 spent at a local business will recirculate locally. If the result is not paradise, I don't know what is.

    I'll still be collecting my consulting fee, of course.

  • Sevo||

    Marc F Cheney| 9.4.13 @ 6:13PM |#
    "SF should end all trade with the rest of the world. That way, 100% of every $1 spent at a local business will recirculate locally. If the result is not paradise, I don't know what is."

    This is certainly favored by brain-dead lefties who then turn around and gripe that the Cuban embargo is killing Cuba!
    OK, now which is it?

  • Anonymous Coward||

    Did it take into account, oh, you know, THE MONEY SAVED by consumers?

    In mercantilism, the consumer doesn't matter.

    So...no.

  • Tejicano||

    About a dozen years ago my dad retired to a townhouse in a small neighborhood just off the freeway. Between the freeway and the neighborhood was about 5 to 10 acres of open land with nothing but a small stripper club on it.

    A couple years after that a Walmart opened on the plot across the street from where the club had been and a Home Depot took the club's place.

    Now that entire area is a dense cluster of several dozen shops - mostly mom-and-pop owned - with no more than 5 or 6 chain shops to be seen.

    Where once only a few strippers were making a living there now must be at least a thousand people coming to work with a large platoon of new business owners.

  • XM||

    Bigger chains aren't "local" and their operation is obviously larger than an "independent" bookstore that might open one or two locations.

    How could they think money earned by Borders in the bay area will stay strictly in their community? What about their online shops, e-book schemes, partnership with coffee stores, etc? Jeez.

  • Ayn Random Variation||

    Alt text: "This cocoa mocha grande concoction has twice as many calories as a Big Mac"

  • Paul.||

    Food dessert.

  • Paul.||

    While figures like Houston's are notoriously easy to fudge, let's assume they're correct. Even if that's the case, it's not clear why it's right to favor San Fran's municipal bottom line and Little League teams over other configurations of prosperity (that $32 doesn't just vanish into thin air) or consumer choice (perfectly homogeneous pumpkin lattes).

    When you believe that economics is supposed to follow a democratic model with "elected" leaders shaping outcomes, income distribution, wage and/or price controls, and even 'nudging' consumer choice towards healthful choices, everything in the article makes 100% sense.

  • Sevo||

    Hey, not all of CA is nuts:
    "Calif. county votes for secession from state"
    "Supervisors in a far Northern California county where residents are fed up with what they see as a lack of representation at the state capitol and overregulation have voted in favor of separating from the state."
    http://www.sfgate.com/news/art.....785806.php

  • Duke||

    A few tasty comments from the article:

    DrSPants 10:30 AM on September 4, 2013

    I understand the historical origins of the name State of Jefferson, but Redneckistan would be far more appropriate.

    twobe 10:29 AM on September 4, 2013

    Great, we can cut off their roads, water, fuel supplies, mail service, etcetera, require them to have passports to leave their State of Jefferson, no insurance, no help with forest fires, floods, or other natural disasters. They object to taxes but will have to levy heavy ones to support schools, fire, police and hospitals. Unlikely they would gain federal recognition as a legitimate state and be admitted to the Union. For now, and likely forever, the State of Jefferson remains a whacky state of mind.

  • Duke||

    The city dweller is somehow totally clueless that rural America is the most capable of being self-sufficient demographic in the country. It’s like they truly believe that rural people desperately need SF and NYC to exist more than they need the heartland to keep producing commodities. What would farmer Bill do if he didn’t get pithy commentary on how backwards they are from the New York Times and have access to Vietnamese, Thai, Japanese and Korean cuisine all on the same block!

    My dream is that farming America would cut off all farm products from NYC, DC, LA, SF, Denver and the like for a few months and then watch them wail and gnash teeth.

  • tarran||

    Allright, wise ass, if they secede, where are the farmers going to get their interpretative dancers and telephone hygienists?

    It thought so.

  • Libertymike||

    Or transgender studies scholars?

  • Sudden||

    From Scott Shackleford at Reason of course!

  • Sevo||

    ..."where are the farmers going to get their interpretative dancers and telephone hygienists?"

    Darn! There's the fly in the ointment, right there!

  • Paul.||

    And government-subsidized work lofts!

  • Invisible Finger||

    Great, we can cut off their roads, water,

    Like California doesn't steal most of its water from other states.

  • Sevo||

    "Like California doesn't steal most of its water from other states."

    Not Siskiyou.

  • Irish||

    Great, we can cut off their roads, water, fuel supplies, mail service, etcetera, require them to have passports to leave their State of Jefferson, no insurance, no help with forest fires, floods, or other natural disasters.

    This person does realize that they aren't talking about seceding from AMERICA right? How would leaving California magically make their mail service disappear?

    Of course, even seceding from America wouldn't make your fuel supplies vanish, so his point's ridiculous anyway.

  • ||

    You guys are all missing the underlying factor here: have you noticed how butthurt collectivists get when you reject them? They fucking hate it. Because collectivists are by their very nature insecure; they don't have the confidence to stand outside the collective, and hate anyone who does. So any talk of secession or that you're going to homeschool your kid or anything where you reject the collective goes right to the "I'm being rejected!" part of their emotion-brain, and they get mad.

  • Duke||

    That’s true. They want you to want them but you don’t, because you realize how useless they are. They cannot fathom a world where they meet their own needs. They can only imagine a world where The Other Guy takes care of his water, food, schools, trash, etc.

    And what’s surreal is that these people are enjoying the benefits of living in a country conquered by people who held the exact opposite views.

  • PapayaSF||

    Also, they have the often-unacknowledged belief that their ideas will only work if everyone is forced to participate.

  • Death Rock and Skull||

    "cut off their roads, water, fuel supplies, mail service... no insurance, no help with forest fires, floods, or other natural disasters... schools, fire, police and hospitals."

    Without government, none of this stuff would happen!

  • Drizzle||

    Hmm, so California really does think its in fact its own country.

  • Neoliberal Kochtopus||

    OT: Wait...wait...Burning Man just ended? Where are Doherty's hundreds of posts?!

  • Killazontherun||

    I've suspected for days that unlike the past decade when things settled into a kind of monotony, this year's Burning Man was EPIC and BD is still stoned out of his gourd. We'll know more when he comes back down.

  • Sudden||

    I think he's having a molly-fueled and tear-filled masturbatory episode in a Denny's parking lot of the 395 right now.

  • Paul.||

    Remember, in modern America, you ask for permission:

    The Man burns during the Burning Man 2013 arts and music festival in the Black Rock Desert of Nevada, on August 31, 2013. The federal government issued a permit for 68,000 people from all over the world to gather at the sold out festival, which is celebrating its 27th year, to spend a week in the remote desert cut off from much of the outside world to experience art, music and the unique community that develops.
  • Paul.||

    My interpretation of Burning Man:

    http://blogs.laweekly.com/west.....php?page=2

    These were the days when The Burn patrolled its own, consciously eschewing law enforcement involvement, the days when you could practice your assault rifle skills at the drive-by shooting range, firing off some rounds as you careen in your car down the playa.
    Then someone got a scratch on their Lexus RX 450 Hybrid or something and Johnny Law came in permanently. Now, undercover officers with night vision goggles have broad powers to interpret your gift of coke to a college girl you're trying to lay as "trafficking." Seriously. The Burning Man website carries a warning. Nothing makes a ten strip of acid go down smoother than undercover cops and some of the strictest drug laws in the country. Cut loose, brah!
  • Sevo||

    There was a puff-piece in the Chron about how all the techie CEOs were going to BM; new-age Bohemian Grove.
    Nope. BG is privately owned and if cops have ever been called there, it's never made the news.

  • Paul.||

    I've heard from multiple sources that the place is crawling with cops from multiple agencies, some federal.

    http://blog.burningman.com/201.....rock-city/

    As the Department of Public Works toils away building the infrastructure of Black Rock City, the law enforcement agencies who patrol our fair metropolis are also on site now, setting up their own infrastructure.

    These law enforcement agencies — BLM Rangers, Pershing County Sheriffs Office — are there to enforce the Federal, State and Local laws that apply to us on the Black Rock Desert — yes, these laws still exist at Burning Man. While Black Rock City is certainly a remote and freewheeling place, it’s also a functioning metropolis. And just like in any other city, law enforcement patrols BRC day and night to keep the city safe and compliant with the laws that allow us to have the event in the first place. So yes, any illegal action on your part can lead to a citation (more common) or your arrest (rare).

    Blow the article, ACLU of Nevada discusses law enforcement on the Playa.

  • Paul.||

    Another:

    http://intellihub.com/2013/08/.....-of-force/

    One of the most peaceful and long running festivals in the country is under attack by police, with early arrivals experiencing a show of force like they have never seen before
  • flye||

    Ran into a buddy yesterday who creates "kinetic metal sculpture" and used to do Burning Man every year. No point to it anymore.

    I think it was the Verizon Presents Counterculture Art tent that finally did it.

  • Paul.||

    I think it was the Verizon Presents Counterculture Art tent that finally did it.

    That would certainly do it for me.

  • EDG reppin' LBC||

    Is your friend named JD?

  • flye||

    No, he's the other kinetic metal sculpter.

  • Killazontherun||

    Nothing makes a ten strip of acid go down smoother than undercover cops and some of the strictest drug laws in the country.

    Turns reality into Philip Dick grade dystopian fiction.

  • Libertymike||

    No crony capitalism allowed, ever.

    Crony capitalism is not limited to direct subsidies to the crony capitalist. It embraces a whole lot more.

  • Sevo||

    Lm, now what time is it? Your meds, Lm, your meds!

  • Libertymike||

    You say its time for me meds because I denounce crony capitalism?

  • Paul R||

    What the SWPL liberals do is they use their economic power to get around laws that make what they do illegal for the rest of America. In this way they can live in almost wholly White neighborhoods and hire and buy from only their neighbors, their ideological fellows.

  • Invisible Finger||

    though often after the city has extracted all kinds of concessions from the retailers.

    Reminds me of the Sopranos episode where they tried to shake down Jamba Juice.

    "What Jews?"

  • Rufus J. Firefly||

    Speaking of subsidies. I think Mangu-Ward is correct about the insanity of subsidies. Quebec has subsidized daycare. It's incoherent, unfair and inefficient. But....$7 dollar a day daycare! Which really costs the gubberming $55.

    It's such a mess I can't believe this province actually functions with such dopey notions of welfarism. Alas, they hook people just fine. My buddy claims we're "lucky" to have subsidized daycare not understanding in the abstract how corrosive and evil subsidies really are. At the end of the day, HE'S paying through HIS taxes for unionized educators to get six weeks vacation.

    Stay away from subsidized daycare America (and the rest of Canada). If Obama starts babbling about it send him a suss to keep him quiet.

  • Sevo||

    ..."At the end of the day, HE'S paying through HIS taxes for unionized educators to get six weeks vacation."...

    And to not give a crap about his kids; it ain't him paying them.
    Watch his response the first time he has a gripe and they tell him to piss up a rope.

  • Rufus J. Firefly||

    He's not "complaining" as he told me.

    Know what's disheartening? This is a guy, my best friend (best men at each others weddings) who has his head screwed on right. He plays all his cards right when it comes to investing his money. He has a high income and has begun to acquire assets like buildings. He won't squander it in toys like expensive cars.

    Says all the right things on how to save, not spend frivolously, etc. His philosophy is similar to mine when it comes to finance.

    The correct one I might add.

    Yet, he politically spews out the usual government BS that serves against his interests. Like, inviting the government to tax him MORE for things like daycare. I tried to show him it's actually BETTER for him and society to pay out of pocket - the ole 'who should control your money' routine.

    Stare blanks. He doesn't see it that way.

    Each time I try to point that out he - unwittingly - pulls an ad hominen somewhere.

    We're losing the fight I feel sometimes.

  • PapayaSF||

    Sad. Figuring out how to penetrate the leftish thought-shield is a major intellectual preoccupation of mine.

  • widget||

    It's not about the chain stores themselves, it's about the snaggle-toothed proles who work and shop there. And it's not leftists, by any standard definition, who support this. These are confederates who want to live among their own. It's off to the suburbs and exurbs with these proles, San Francisco is not Detroit, ya know.

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