In the past, I've asserted that San Diego is seriously over-built. Hillcrest, the neighborhood in which I live, has many commercial sites that have been empty for some time. As an œconomist, I naturally wonder why the landlords haven't lowered the rent to a point where some party takes occupancy.

One possibility would be that the landlords were hoping for an up-turn in the economy. The possibility would make them more reluctant to commit to long-term leasing contracts at what would be present market-clearing rates, and might make them reluctant to even rent month-to-month, as there would be difficulties getting short-term renters out as quickly a more desirable renter might want to begin using the site.

Part of what would make it difficult to remove month-to-month renters would be local and state laws and regulations governing evictions. And other interventions in the market could be holding rents and vacancies at unnatural levels. For example, the structure of tax law might make sometimes make it advantageous to leave a property idle.

In any case, the numbers of vacancies, and durations of some of them, would be difficult or impossible to explain based simply on reference to market forces.

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308 Washington Street, half-a-block from where I live, was a Hollywood Video rental store when I first moved to Hillcrest. (Most or all of their wares were VHS tapes at that time!) At some point, they hived-off perhaps a fifth of the site for digital electronic game rentals. Eventually, this section became a separate store, 302 Washington Street, and then Hollywood Video vacated that section, which was then rented to a UPS franchise store. Some time in late 2007 or in 2008, Hollywood Video shut down the store at 308 Washington Street. Since then, the building has stood about four-fifths empty, with a large sign advertising its availability.

Finally, yester-day, I saw a crew in the site gutting things in what I take to be the first stage of a renovation.

The last time that someone was poking-around in 308 Washington Street, I asked Scott, who works at the UPS store, lives in the same complex as I, and frequents the same coffee house (Babycakes) if he knew who the party was, and he said that rumor held it to be PetCo, which we agreed would be cool. Last night, Art, who lives in the same complex and works part-time at the coffee house express hope that the new store would be, er, a Denny's Restaurant, and didn't like the idea of a pet supply store there, in spite of being a dog-owner. Art sees PetCo stores as essentially big boxes like Wal·Mart stores. Well, there's some truth to that. On the other hand, Denny's Restaurants are open all day, almost every day of the year, and can be associated with a lot of traffic. Our immediate neighborhood could become more congested and louder late at night with a Denny's Restaurant. But I don't think them a likely renter there.

[Up-Date (2009:03/26): Scott tells me that word remains that 308 is to be occupied by a PetCo store.]

Relatively speaking, it has been cold and raining a great deal in the San Diego area. Certainly it has been raining more than in most of the Decembers through which I've lived here, and possibly more than any other.

One good thing is that I get to wear my duster.

But my understanding is that Babycakes has been taking a hit from the weather, with fewer customers. I think that part of the issue is that, while the efforts of the owners to attract new customers have produced some positive results, the new customers whom they have attracted don't have a sense of attachment to the place; in the meantime, changes have weakened the sense of attachment held by the established customers.

For example, most of the indoor seating for customers is in a single, long room. The owners have tried to give things a cozier feeling be partitioning that room with curtains. But the rental computers are on one side of those curtains, and the tables used by those with note-book computers are on the other; practicalities divide friends, and thus the sense of the place as one where one is with friends is eroded.

I don't know how much actual business, over-all, is associated with the WLAN, but the quality of that network has been poor for weeks. The router was moved into a back-building to allow for renovation of the room in which the router was previously located. And that back-building seems to work largely as an insulating cage. In the front half of the main building and on the front patio, there is no longer any meaningful access to the WLAN. The signal is degraded even on the back patio, and it's only there that the WoW folk can get a sufficient signal for their purposes.

Anyway, in the absence of a stronger sense of attachment and in the context of the bad weather, people just don't come. (And the people who need a solid 'Net connection aren't typically going to set-up their computers where it is cold and wet.) I don't know where the balance is to be struck, but I think that the owners need to improvise quickly, to restore at least somewhat the relationship of their business to its established customers. I think that the baristi should be told to open or to close the partitioning curtains according to their judgment about what sort of customers are present, and I think that the wireless router needs to be moved out of the back building and into a more central location, perhaps in the second story of the main building.

In my opinion, San Diego is now seriously over-built. Condominia are going unsold all over town. But development continues none-the-less. Through-out the country, the real estate market has been driven by more than simple considerations of supply-and-demand. And San Diego is one of the places where the results have been notably grotesque.