The problem is pretty much unavoidable: Because the average business in Davis can now make significantly more money, landlords can charge more rent. (As far as I know, essentially no retail businesses own their location.) So the value of the property increases. The city increases the assessment and the tax bill increases. (Except in the unlikely event that the city cuts the rates enough to fully compensate.) Businesses start paying for the tax bill through either pass-through leases or increased rent the next time the lease rolls over.
The problem is felt by businesses that aren't seeing as much of an increase in profits as the "average" business is. Additionally, the increase in "average" business profit is significantly due to changes in the mix of businesses, the mix includes more upscale businesses. What ultimately happens is that downscale businesses start to get squeezed by the increasing costs of the location.
if the landlords aren't sensitive to the neighborhood and the kinds of business that make Davis what it is
The landlords will rent to whoever is willing to pay the most.
As for avoiding Harvard Square-ization, all of this is driven by the increasing presence of affluent people. How do you propose to drive out the yuppies? Worse, "We have met the enemy, and he is us."
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Date: 2014-02-04 04:22 pm (UTC)The problem is felt by businesses that aren't seeing as much of an increase in profits as the "average" business is. Additionally, the increase in "average" business profit is significantly due to changes in the mix of businesses, the mix includes more upscale businesses. What ultimately happens is that downscale businesses start to get squeezed by the increasing costs of the location.
if the landlords aren't sensitive to the neighborhood and the kinds of business that make Davis what it is
The landlords will rent to whoever is willing to pay the most.
As for avoiding Harvard Square-ization, all of this is driven by the increasing presence of affluent people. How do you propose to drive out the yuppies? Worse, "We have met the enemy, and he is us."