Sam Juha has slung sandwiches and salads at his deli Cheese n’ Stuff on Durant Avenue for 34 years. But what’s mostly on his menu nowadays are heaping portions of disappointment and worry.
“I’ve never had a month like this; this is the worst I’ve seen,” says Juha. “The overhead is still the same – we have the same employees, rent, and PG&E bills – but we’re only doing 20 percent of our normal business. And it’s tough, really tough.”
The problem: After suffering through four months of pandemic-mandated closure, Juha reopened to find that a huge chunk of his customer base had vanished. That’s because UC Berkeley shut down most in-person learning this semester in favor of online instruction. With no need to physically attend classes, and with a housing cap in the dorms to enforce social distancing, students are sparse on campus. Roughly 8,500 students live in residential halls and university housing in a typical year; today, there’s only 2,200. Thousands of other students are living elsewhere and studying remotely.
In the past, Juha could supplement his deli income by catering university sports events. Those don’t exist anymore. So he’s dug into his personal savings to stay afloat. “I’m hoping school will come back soon, but it doesn’t look like it,” he says. “I cannot close and I cannot stay like this. I honestly don’t know what to do.”
It’s a refrain you’ll hear from small-business owners who depend on students for their livelihood – not just those from the university, but from the physically shuttered Berkeley City College, Berkeley High School, and Kaplan language school. Just how bad is their situation? Well, the city has yet to compile data on the economic impact of the student drought. But the Downtown Berkeley Association’s automated pedestrian counters on city sidewalks – yes, they exist and they’re called PYRO-Boxes – calculate a loss of about two-thirds of foot traffic with UC Berkeley in session online, compared to foot traffic before the pandemic
“Obviously, it’s been a really hard summer and it continues to be a hard fall,” says John Caner, the association’s CEO. “It’s just heartbreaking to see these people spending their life savings and hanging on by a thread, not knowing if they can keep their doors open and pay their employees.”
Nive Thilagaraj and her husband operate Bollywood Cafe on Euclid Avenue on the north side of campus, attracting students with an affordable selection of tasty curries and Indian street snacks. They serve so many students – about 90 percent of their clientele – that they joke about what they’re going to feed their “children” when menu-planning each morning.
Previously they’d have 100 or so customers a day. Now they’re lucky if they see a dozen. That’s caused Thilagaraj to fret about the cafe’s survival and the mental health of her husband, an immigrant who fled from genocide. “He recently lost his brother and I didn’t want this to happen to him,” she says. “He bought this restaurant with all his savings and it is super-important to us as well as this is a long-term passion for him.” (They have set up a GoFundMe campaign to raise additional funds.)
Restaurateurs aren’t the only ones feeling the pain. Games of Berkeley hosts a board-game night on Thursdays that was popular among students, who’d support the business by purchasing amusements like Coup and Codenames as well as sodas and snacks. But now “nobody’s playing games at the store,” says managing owner Erik Bigglestone, who’s cut shop hours and his own pay. “We’re struggling. We’re not at the point where we’re breaking even, but we have reduced the speed at which we were losing money.”
“I would say we definitely have seen a decrease in sales at the shop,” says Leia McQueen, a manager at the computer-repair store Fix That Mac on Oxford Street. “It’s almost like a ghost town over here. You don’t really see many people, except the ones doing construction over at Center Street.”
UC Berkeley could not say how many of its students are living off-campus around the city. Indications are it’s not a lot. “We usually have zero empty apartments at this time of year. And we have maybe 140. It’s huge,” says Sam Sorokin, managing partner and broker at Premium Properties, whose office is on Telegraph Avenue.
About 70 percent of the properties that Premium manages are student-oriented – a problem when there are few students in town. “Over the years we have transformed our apartments to have more private space versus common space,” Sorokin says. “Generally students want to have apartments that have smaller living rooms but bigger bedrooms so you can have roommates and things like that.”
That means these units don’t necessarily appeal to professional renters, who typically prefer smaller bedrooms and more open space for entertaining friends. “Some of the housing we have in some locations just simply doesn’t attract people who are not students,” he says. “As a professional, I wouldn’t want to live, say, on Durant one block from campus (though we would of course rent to any qualified tenant who would apply).”
The dismal market has forced property managers to get creative. Sorokin convinced one landlord in a new building downtown to slash rents from $4,000 to $2,000, expecting a flood of prospective tenants at the gates. That hasn’t exactly happened. “We’re literally getting two or three groups each week even at those prices,” he says. “It’s a bizarro world – there’s just literally a lack of any interest whatsoever in apartments right now.”
Natasha Kapoor-Acuña, president of the Berkeley management company Kasa Properties, rents to many students around campus – usually. Now, however, they have two dozen vacancies in Berkeley. She’s thinking of appealing to a new audience of traveling nurses and people going crazy under lockdown, like folks who need to escape because their roommate loves microwaving fish.
“We put up a couple of ads trying to see if somebody is bursting at their seams and has some money to spend on a rental,” she says. “Maybe we could lease short-term for a month or two months to somebody who’s struggling with space.”
The strategy hasn’t panned out so far and Kapoor-Acuña remains worried for the future. “We’re just hoping it’s a waiting game and maybe in the spring [students will come back] – but I’m not super-optimistic given our poor leadership, if I may say that.”
It’s uncertain if students will return to campus this spring under some kind of hybrid-learning model. A university spokeswoman says it “will depend on public-health conditions.” If they don’t return, however, it could have a ripple effect on the rental market that might be felt years ahead.
“Our concern all along has been if I don’t have a student population to rent to, but I have to have income, then my only other option is to consider people that aren’t students,” says Krista Gulbransen, executive director of the Berkeley Property Owners Association. “The problem with that is those people are more likely to stay in their unit for a longer period of time…. So whenever UC Berkeley gets back into session for in-person education, the housing’s not going to be there for students because it’s going to be taken up by the longer-term tenants.”
A number of local property owners are dealing with pandemic disruption. “They are seeing increased vacancies, leases being broken, and tenants not paying rent,” Gulbransen says. “It’s just devastating to them because they don’t have the ability to sustain (themselves) for a long period of time without this income.”
The pandemic undeniably has also been devastating for renters who have lost their jobs or seen their income drop drastically. The city of Berkeley has banned residential evictions until after the local state of emergency is lifted. The urgency ordinance allows tenants a year to pay back landlords and ordains that non-payment of rent from during the pandemic will never be grounds for eviction. However, tenants will still be obligated to pay their back rent.
Gulbransen is concerned about what the future holds.
“Our country needs to be stepping in with financial support to stop an avalanche of what we believe is going to be another scenario of potential foreclosures on distressed properties, especially with smaller owners in Berkeley.”