[Argote]

San Francisco's high rents are more due to the fact that the city has refused to build more housing stock (particularly, high density housing).

When the supply (almost) stays the same and the demand increases, the equilibrium point for rents is bound to increase as well.

[eloisant]

An other reason is that SF is on a Peninsula, so it can't really have a workable suburb.

If you go South you get all the expensive "traditional" Silicon Valley cities. If you go East or North you have to cross a bridge, and a guaranteed commute nightmare. If you go West, well... You get to Hawaii.

[rdouble]

How does lack of housing cause high rents for restaurants?

[Scaevolus]

Real estate is at a premium, and it's reflected in both high apartment rents and high commercial rents.

It's largely driven by the city's height limits-- there are only so many square feet of usable housing you can fit within a given volume of space.

[_stephan]

At some point city planners should ask themselves how many billions of dollars of higher rents per year the benefits of a flat city skyline are worth to its residents (and how to fairly balance the interests of property owners and renters).

[JPKab]

Gasp You mean you want a bunch of NIMBY idiots to quantify their issue? If they did that, there would be a big problem, because it would plainly illustrate how absurdly greedy they are being.

[rdouble]

The rents of restaurant and residential properties seem like orthogonal issues. I have never read that San Francisco has a shortage of retail or restaurant space.

In other cities where I've lived, when a restaurant loses a lease in this manner, it's because the landlord has lined up a different tenant which they consider much higher value.

[mhjacobson]

Space is space is space.

Think about it this way: if more high-rise apartments were built, then some rowhouses (or other inefficient [in terms of people per square foot of land] housing) could be torn down. Restaurants could be built in their places.

Thus the supply of restaurant space would increase, and the average price would accordingly decrease.

[timr]

"Space is space is space."

Blah blah blah. This isn't Econ 101. We have zoning laws, so no, all space is not the same.

I haven't checked, but I'm fairly certain that the Grove's location isn't zoned for residential use. In any case, I can guarantee that isn't what the owners are planning to do with the space, given its prime location on a high-foot-traffic, retail strip.

[mhjacobson]

The zoning restricts the market somewhat, but it like anything else can be changed. Didn't mean to come across as patronizing above — sorry if I did.

One more thing... you may have misinterpreted my comment. The situation I'm imagining is not the case where The Grove is turned into a residential development. It's the opposite — some residential areas are razed and rezoned for business, driving down The Grove's rent.