Tilly Tsang (L) and her daughter Chelsea Hung (R), owners of Washington Bakery and Restaurant in San Francisco's Chinatown on Sept. 2, 2020. (Beth LaBerge/KQED)
This report contains a clarification.
Update, 4:10 p.m., Sept. 29: After extending San Francisco's commercial eviction moratorium earlier this month until Sept. 30, Mayor London Breed has now extended the moratorium for another 60 days, until Nov. 30, 2020.
Before the pandemic, Tilly Tsang, owner of Washington Bakery and Restaurant in San Francisco’s Chinatown, says breakfast was always the busiest. Each morning, a rotation of regular customers would enter the restaurant, order their usual – sometimes a bun or a pastry from the bakery counter – and sit down to survey who else from the neighborhood was around.
“A lot of people, mostly older people, come every day to sit down and just have a cup of coffee, or a cup of lai chai,” Tsang said. “They just want to see if they know anybody so they can chat, chat, chat.”
Lai chai, or milk tea, is one of the many Hong Kong staples that Tsang has offered at her restaurant, a local favorite, for over two decades, along with their beloved baked pork chop rice plates and salt and pepper chicken wings. Her loyal customers include Chinatown residents who live in single-room occupancy hotels (SROs). They treat Tsang’s restaurant, and other immigrant and family-owned businesses, as an essential place to catch up and socialize with one another because many of their cramped buildings lack common areas.
But since the COVID-19 pandemic, small business owners like Tsang are facing the devastating reality that many will not survive. Tens of thousands have already permanently closed in the United States, and it is uncertain when another round of federal government assistance will arrive. Aid from the federal Paycheck Protection Program has largely run out for those who could get it.
Eviction moratoriums have prevented more San Francisco businesses from folding, but the city’s commercial eviction moratorium ends on Sept. 14. That means commercial tenants will have until Monday to pay back missed rent payments – which for many add up to six months rent – or else landlords can start evicting them as early as October. Locals fear that once commercial evictions begin, those who depend on the businesses for jobs, culture and community will be displaced, and the cultural landscape of San Francisco will be irreparably harmed.
Real estate attorney Allan Low is working pro bono to assist small business owners in the city’s Asian cultural districts. He says without immediate steps on both the federal and local level to address the threat of permanent closures, “We’re going to be faced with a tidal wave of evictions, bankruptcies and retail landscapes that are just going to be completely obliterated.”
He says that could mean devastation to neighborhoods that have largely defined San Francisco’s unique culture, including Chinatown, Japantown and the city’s newest cultural district, SOMA Pilipinas.
The ripple effects will hit the larger Bay Area Asian Pacific Islander American population that depend on these hubs for a sense of belonging, essential services and cultural empowerment – especially in a region that has already faced rapid gentrification and demographic shifts.
In Chinatown: Holding Space for One Another
Unlike its more affluent neighbors in Russian Hill and North Beach, Chinatown has been able to stave off years of housing and development pressures thanks to its strong community, tenant organizing and zoning restrictions.
District 3 Supervisor Aaron Peskin says the neighborhood has benefited from its “incredibly rich fabric of community-based organizations” such as the Chinatown Community Development Center (CCDC). The nonprofit housing organization quickly leapt into action at the start of the pandemic with its short-term Feed + Fuel Chinatown program. The program immediately mobilized Chinatown restaurants to feed vulnerable SRO restaurants and the elderly. It allowed restaurant owners to hire back laid off employees and pay rents, but it ended in mid-July.
Some restaurants, like Tsang’s, are still participating in a similar effort through the city’s Great Plates program, but most say they are only generating about 25% of their regular revenue, a CCDC restaurant survey revealed. Nearly 60% of restaurant jobs have been eliminated and less than a quarter of the Chinatown restaurants surveyed say they can maintain their businesses; the rest are either unsure, barely surviving or have only months left to stay open.
Even though shelter-in-place orders were announced in mid-March, the painful drop in business started in January for Frank Chui, co-owner of the Hang Ah Tea Room.
“It was a fall-off-the-cliff kind of decline,” he said. “It wasn’t slow. It was immediately – boom, within a week, 70% to 90% drop, like no business.”
Chui says the closure of Hang Ah Tea Room, which was established in 1920, would mean the permanent loss of an important piece of San Francisco Chinatown and American history: “It’s the first dim sum house in America.” Chui acquired the restaurant in 2014 and had hopes of celebrating its 100th anniversary this year.
Owning the restaurant was an opportunity for Chui to help protect part of Chinatown’s legacy; the restaurant has generations of customers that make visiting Hang Ah Tea Room an annual tradition. But the challenges of COVID-19 has forced him to cut more than half of his staff – all recent immigrants who live in Chinatown. Chui says they have all been able to collect unemployment benefits after the layoffs.
At Tsang’s Washington Bakery and Restaurant, some employees have stayed on for decades. Keeping the restaurant in the family is a priority for Tsang and her daughter Chelsea Hung. Hung moved back from New York in 2018 after working in tech to help out with the restaurant because she couldn’t bear the thought of letting the business go when her mother contemplated retiring a couple years ago.
“I think it's up to our generation to pay it forward and continue the community we grew up in,” Hung said. “It's more than the restaurant, but also for the community.”
She explains that the businesses are intricately linked to a unique commercial ecosystem that helps make Chinatown a complete neighborhood: “We use a lot of local vendors, and if we had to shut down those vendors would be affected, too,” Hung said. “It becomes this domino effect. ... It’s not just the loss of a business, it’s the loss of a whole community.”
The city is trying to help struggling Chinatown businesses by encouraging restaurants to participate in outdoor dining. While the city’s Shared Spaces program had already shut down a stretch of Grant Street – the corridor of Chinatown most known for its tourist souvenir shops – for outdoor dining, it has primarily been utilized by outside visitors and tourists who have slowly begun to return to Chinatown. Hoping to loop in more restaurants, especially ones that serve locals, CCDC and the Chinese Chamber of Commerce started providing grants and technical assistance to merchants, such as securing barricades to partition an outdoor dining area.
Hung says the program has helped Washington Cafe and Restaurant, and the effort has slowly welcomed back their usual regulars who have happily found an outdoor alternative for the morning lai chai. “They’re happy about that but they’re also facing their own challenges of how to social distance, but also be active and still live their life,” she explained.
Though Hung says their landlord, who also owns a business in Chinatown, has accommodated delayed rent payments for now, she still has to pay several months’ in full, and it’s an anxiety-inducing reality that is sinking in for businesses across the city as the eviction moratorium is scheduled to end on Sept. 14.
In Japantown: Two Landlords Determine the Fate of Dozens
While the threat of commercial evictions in Chinatown is imminent, it may be blunted by the fact that building ownership in the neighborhood is more diversified compared to others. Supervisor Peskin says that because many of its buildings are owned by family associations, for example, that are not “entirely motivated by money and rent,” he believes businesses in other neighborhoods face a graver risk of permanently closing.
One such neighborhood is Japantown where the fate of dozens of small businesses in the East and West sides of the Japan Center mall – the cultural district’s main commercial center – is in the hands of just two landlords.
Since the start of the pandemic, the closure of the two-building indoor mall has severely impacted the more than 50 businesses inside, which are a mix of mom-and-pop shops and restaurants.
In addition to the rent, businesses must pay the common area maintenance fees that have more than doubled for some tenants since a turnover in property management in 2018. Adding to tenants’ woes has been the total lack of response to requests for future rent relief structure on the part of one particular landlord, Kinokuniya Bookstores of America, which makes negotiating a deal impossible, says Diane Matsuda, a staff attorney with Asian Pacific Islander Legal Outreach (APILO), a nonprofit organization.
“The biggest challenge here is that you have two really big mega landlords and those mega landlords control a lot of the cultural and economic hub of Japantown,” Matsuda says. “Should they not want to negotiate or have any kind of rent abatement ... you’re really talking about us losing literally a whole ethnic community that has been here since the start of the 19th century.
Matsuda and Low, who is also fighting for Chinatown business owners, have been representing nearly 40 Japan Center tenants in total, many of whom are native Japanese speakers with limited English proficiency.
“They don't have to just be the quiet Americans that I think the property manager wants them to be,” Matsuda said.
One such tenant is Ryan Kimura, who owns Pika Pika on the Kinokuniya side of the mall. Since 2006, Pika Pika has been a specialty store that features purikura, or Japanese sticker photo booths, which is often frequented by young teens and families. The photos are a popular Japanese phenomenon that Kimura wanted to bring to the U.S. after living in Japan for several years. It’s an in-person and unique social experience that has made it impossible for the business to reopen during the pandemic. Despite no revenue, Pika Pika continues to receive monthly invoices for rent and services, according to Kimura, who says he and his family are now leaning towards closing up the 14-year-old shop for good.
Many of the businesses, like Pika Pika, highlight unique aspects of Japanese culture, from gardening knowledge to selling products that would otherwise only be found in Japan. For the tenants, the business of sharing Japanese culture and traditions is a deeply personal passion – one that now stands to be lost if rent negotiations do not take place.
Before the pandemic, a coalition of Japantown mall tenants expressed their concerns over high common-area maintenance charges that dramatically increased since Davis Property Management took over management of the Kinokuniya Building in 2018. Kimura and Matsuda say some of the tenants have seen over a 100% increase in the fees and that some are paying more in these charges than in rent itself.
“This has caused a lot of friction within our mall and a lot of tenants are upset about it and the lack of transparency,” says Kimura. “We send multiple emails, letters to our property managers and landlords and have heard nothing back.”
Attempts to reach Kinokuniya’s attorneys for this story were unsuccessful, but Kirsten Fletcher, the building’s property manager wrote that “it is difficult all around,” and cites that the building owner also owns over 50 stores in the Americas alone. “Rent is contracted and due by the tenants, no one is making money,” Fletcher replied in an email.
Fletcher also notes that one month of deferred rent was offered to Kinokuniya tenants earlier in the pandemic.
Establishing and securing the commercial and retail district of Japantown is an effort that dates back more than a century, starting from when Japanese immigrants settled into the area after the 1906 earthquake. It grew into a thriving community that spanned about 40 blocks during its heyday until Executive Order 9066 during World War II swept Japanese citizens and Japanese Americans into internment camps.
Since then, through years of economic development, buildings have been razed and the neighborhood has been reduced into only a commercial district. It’s why protecting the mom-and-pop shops in Japantown is an effort to preserve the cultural heart of the wider Bay Area Japanese American community, many of whom come into San Francisco to convene and continue important traditions. Japantown is less residential than Chinatown but it serves as a focal point for key community events and festivals, including local basketball league games, the annual Cherry Blossom and Obon Festivals and gatherings at the Japanese Buddhist church in the neighborhood.
She cites the exodus of San Francisco’s Black population as an example: “So many people have had to move out or decided to move out. And if you lose those businesses, then you lose a place to go back to even.”
Low says attempts to reach out to Kinokuniya’s property manager and attorneys have gone unanswered, and he’s afraid that once the commercial eviction moratorium is lifted on Monday, many of these businesses won’t make it.
“Our existing commercial eviction moratorium was based on the assumption that this pandemic would only last six months ... it was a very short-term reaction,” Low said. “I think we relied too much on the good faith that landlords and tenants can work out their own problems and what we’re rapidly realizing is this is not the case.”
As it stands now, the commercial eviction moratorium states that if commercial tenants have not paid all outstanding rent after six months, landlords are able to evict them for non-payment.
Low has drafted an ordinance – and is in talks with Supervisor Peskin, as well as District 5 Supervisor Dean Preston, whose jurisdiction includes Japantown – that would extend the existing moratorium as well as add more weight to its enforcement.
Though the timeline of when this may happen is still unclear, Peskin says he hopes to arrive at a solution that will be “legally sound.”
Low adds, however, that an extension of the moratorium still won’t be enough. “The moratorium is fine just for stalling the evictions," he says. "You have to get to the underlying problem, which is not only stopping the evictions or addressing evictions, but somehow addressing the money."
In SOMA Pilipinas: Incubating Survival Strategies
Another population in San Francisco that is acutely familiar with being forced to relocate is the Filipino American population.
SOMA Pilipinas was formed in 2016 in part to encourage entrepreneurship among Filipino Americans in a Filipino-dedicated business corridor and reclaim space in a city that has repeatedly displaced them.
There had been a 10-block radius neighborhood dubbed “Manilatown” on Kearny Street in the 1920s established by Filipino migrant farmworkers. But as urban renewal and development sought to grow the city’s Financial District, Filipinos were slowly pushed out of the area. The tension came to a head in 1977, when the International Hotel, or I-Hotel, a residential building for Filipino immigrants, faced eviction threats, which led to large protests and coalition building with other groups, including Chinese and Japanese American activists.
Eventually, I-Hotel evictions took place and shifted Filipino immigrants to the SOMA district, where they opened up businesses and established storefronts. But they then faced additional mass displacement during the development of Yerba Buena and Moscone centers.
“SOMA Pilipinas is kind of a great hope of ‘we can finally write the narratives that we always wanted,’ ” said Desi Danganan, executive director of Kultivate Labs, a nonprofit arts and economic development organization, who helped spearhead the district.
“All of these past struggles led up to this momentous opportunity to develop our community in one of the most wealthiest progressive cities in the world,” said Danganan. Since its establishment and before the pandemic, SOMA Pilipinas had 18 businesses in the neighborhood – its main corridor is on Mission Street between Fifth and Seventh streets – and many of its owners are younger Filipino entrepreneurs and artists. The district has since lost four businesses due to the economic challenges of the coronavirus.
In a survey conducted a few months ago, more than half of the food and retail businesses in SOMA Pilipinas have lost more than 90% of their revenue, largely attributed to the lack of foot traffic from employees in nearby office buildings, including the Twitter headquarters. Nearly 70% of the businesses say they only had a handful of months left to stay afloat.
The impact on SOMA Pilipinas may mean a serious hurdle for new Filipino entrepreneurs who saw the new business district as a source of cultural empowerment. With a background in entrepreneurship and business marketing, Danganan says he realized early on that establishing an economic footprint would be critical in creating a cultural space for the Filipino community.
“Access to capital and mentorship was the biggest barrier to entry into doing business in the south of market, or SOMA Pilipinas,” he said. Through Kultivate Labs, Danganan and his team function as an incubator to help kickstart Filipino businesses.
One such business owner is Hü Gamit, a 27-year-old San Francisco native who followed in the footsteps of his late grandfather, Papay, who once owned The Gamit Barbershop on 6th Street. He grew up in his grandfather’s shop, which he says was a safe space for Filipino immigrants, and watched him bond with the local community. He established his own barber shop, Yoü by Hü, on Sixth Street in August 2019 and says it provided an opportunity to continue a family and cultural legacy – he frequently runs into SOMA community members who remember his grandfather fondly – and empower himself to contribute something new for the larger SOMA community.
“The one thing I'm most proud of is I've turned myself into a business. Like, I am the business,” Gamit said. “My space on Sixth Street, that's my place, that's like my home court.” He says it’s especially meaningful as someone who was born and raised in the city who has witnessed the power shifts and dynamics of gentrification.
But dreams of entrepreneurs like Gamit have been thwarted by the coronavirus, which has kept him from opening his shop since March.
A former caterer, Montenegro has turned to building her online presence, hosting cooking classes and preparing meal prep packages, to adapt during the uncertainty. While her landlord has accommodated late payments, she says the stack of unpaid bills, rent and other costs is growing to a point where she may have to rethink her entire business structure, and not return to the brick-and-mortar model at all.
Through grants and support from city politicians, Danganan said San Francisco has been largely supportive of SOMA Pilipinas and hopes that the city continues to incorporate equity in every decision.
While he continues to triage support for the SOMA Pilipinas businesses that continue to face devastating uncertainty, Danganan says he’s always willing to place a bet on culture, especially in San Francisco: “It's like hardware and software. Hardware is just like any kind of city infrastructure and software is the culture. And that's what we have here.”
He recognizes, though, that the survival of cultural neighborhoods will boil down to each community’s ability to take care of itself. Danganan holds the incredible political savvy of Chinatown, cultivated by decades of activism and organizing by community leaders and activists, as an example.
“We’re heavily supported by our city government, as they should, but at some point, our community’s going to have to come together and support ourselves. It’s the only way to push us forward.”
Sept. 15: Davis Property Management, the property management company for the Kinokuniya tenants of Japan Center, offered one month of deferred rent earlier in the pandemic. The story has been edited to include this response.