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Can Bay Area Restaurants Survive the Silicon Valley Effect?

Restaurants just can’t compete for employees

Golden Gate Bridge Justin Sullivan/Getty Images

The city of San Francisco is a vastly different place than it was just a few years ago, before Silicon Valley grew to what it is today, and tech workers swarmed the area. While that transition has had a myriad of both positive and negative effects on the city, another has come to light in the past year, an issue that Eater has chronicled over that time period.

The issue is twofold: The cost of real estate has skyrocketed, and independent restaurants are having trouble competing for staff with well-funded tech companies, which can pay line cooks more than restaurant owners often make in a year.

The New York Times covered the issue this weekend, reporting on the multi-tiered issue. According to the Times, “more than 70,000 square feet of Palo Alto retail and restaurant space were lost to office space from 2008 to 2015, as the tech bubble drove demand for commercial space downtown.” Remaining real estate is incredibly pricey — $7.33 a square foot, up more than 60 percent in four years — making it nearly impossible to offset the costs of doing business as a restaurant.

Howard Bulka, a chef and owner of Howie’s Artisan Pizza in Palo Alto, told the Times, “There’s just not enough profitability in this. Period.” He’s currently looking for a way out, and says other restaurant owners are, too. Delfina co-owner Craig Stoll and Bird Dog co-founder Brigette Lau also joined the conversation, with Lau saying, “I’m supportive of the start-up community, but not at the expense of the community.” Stoll said Delfina lost a few of its best servers and its director of operations to Twitter and Airbnb in SF.

Meanwhile, more than 170 restaurants closed this past year (for a variety of reasons and all around the Bay Area), and the shutters just keep coming. No one has found a solution quite yet to the problem, though many restaurateurs and executive chefs are trying to find ways to compete, such as offering start-up-like perks or changing recipes so that line cooks essentially just have to reheat meals. It’s a brave new world in the Bay Area.

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