The city of San Francisco in the United States is offering vacant spaces rent-free to attract small business owners to rejuvenate the downtown areas.
San Francisco's office vacancy rate recently hit a record high of nearly 37 percent. To address the problem, the city is implementing what some consider extreme measures through the 'Vacant to Vibrant' initiative, which was launched last October. The program has selected nearly 30 local businesses to date and offers up to six months of rent-free space.
The owners of Paper Son Coffee applied for the program, and are now at the new location serving up locally roasted coffee that incorporates Asian flavors.
"Streets were always packed before COVID and now it's like a ghost town. So it's nice to get some vibrancy in some communities, the shops open," said a customer named Mano Gilman at the coffee shop.
This prime location was empty for three years before Paper Son Coffee moved in with no rent pay for six months.
"Six months, no strings attached. You can leave if you want to. It is a statement from the landlord. That's super generous, honestly," Alexander Pong, co-owner of Paper Son Coffee told China Global Television Network (CGTN).
Hungry Crumbs makes freshly baked stuffed cookies and the shop is filled with locally produced beverages and art.
Its founder Mo Ali said the initiative changed the traditional business model.
"I think it's based on the conversation that you have with the landlord. Some folks would just pay a flat fee or a percentage based on revenue generated. I think it's an exciting time just to kind of revise what the business model is, as opposed to like a flat fee," he said.
Rent based on revenue was not an option for jeans store Holy Stitch, which was in the first "Vacant to Vibrant" cohort.
"I was given a month to month option thereafter with the rent that everyone knew I or hoped that I could pay for it rather. I maybe was ambitious thinking the possibility of doing that. But it definitely at times - not felt like a set up - but indicative of how small businesses need different kinds of support than just a space," said founder Julian Prince Dash.
Now, Holy Stitch has evolved into a for-profit business that creates original clothing.
"You can think about it like an ice cream shop. Buy it as is, or you can go to the other section and put toppings on it that include rhinestone, silkscreens,” said Dash.
San Francisco offers vacant downtown spaces rent-free to lure retailers
