Rents force Chinatown locals to ponder long march to suburbia

November 1, 2013 7:55 pm

Rents force Chinatown locals to ponder long march to suburbia

By Amie Tsang in London, Anjli Raval in New York and April Dembosky in San Francisco

For Lawrence Cheng, the arrival of another betting shop in London’s Chinatown district is one more nail in the coffin of the immigrant business community whose colourful, lantern-laced streets have been part of the capital since the 1950s. “We need another betting shop like we need a hole in the head,” says Mr Cheng, a restaurant owner who serves as secretary-general at the London Chinatown Chinese Association. “Within 60 yards of where you’re sitting there are seven or eight bookies.”Historically, Chinatowns have been a distinctive feature of many city centres, seemingly impervious to gentrification and constantly rising property prices. But Mr Chen is voicing a fear, felt in Chinatowns from London to San Francisco, that the struggle to keep up with rising rents and other challenges will prompt these vibrant communities to disappear.

It is not just rising rents that are threatening their survival. In London’s Chinatown, businesses have become the target of frequent raids by a UK Border Agency that is clamping down on illegal workers.

A generation gap means children often have little interest in staying in the family business, while would-be immigrants often see brighter prospects at home.

The appreciating price of Chinese merchandise is pushing up costs as the value of the US dollar and pound has fallen against the renminbi, meaning the money that gets sent home no longer goes so far.

In New York’s Chinatown, where trendy coffee shops and boutique clothing stores are replacing noodle bars, the Asian population dropped 15 per cent in the last decade, according to census data, even as the wider New York Asian population grew 30 per cent. In areas around San Francisco’s Chinatown, the Asian population has fallen about 23 per cent in the same period.

The Chinatown in Philadelphia is particularly exposed to an influx of investors buying up surrounding luxury developments which is pushing up property prices and rents, according to a study by the Asian American Legal Defense and Education Fund. In fact, much of the hot money hails from mainland China.

Andrew Leong, one of the authors of the study, says as cities lose their Chinatowns, they also lose important services and businesses, such as English schools and job centres, that help new immigrants to integrate.

“New immigrants will use Chinatown during the first 10-15 years because of language and cultural barriers they face if left to live in the suburbs,” Mr Leong said. “If you have a Chinatown it reduces tension. It helps them acclimatise into American society.”

The bustle in Chinatowns worldwide has not stopped but behind the facades of Chinese shops and offices there is concern that the most recent problems affecting their communities may be insurmountable.

As the global population increasingly shifts to living in cities, competition for prime space, whether business or residential, is likely to keep on driving up rents and prices in prime locations. London property prices recently reached a record partly on the back of international investment.

Residents and businesses established in Chinatowns are aware of this and a barrage of other problems closing in on them.

“Even rent on the first and second floor is very high”, says Lawrence Lee, a Chinatown-based dentist in London, referring to the services provided to Chinese-speakers that are tucked away above street level. He has seen more than 10 businesses nearby, including two accountancy firms, move away in the past three years.

Based on prime rents and yields, the value of offices in the London Soho area have risen 65 per cent in the past five years, says CBRE, a property agent. Over the past 18 years, as far as the data goes back, they are up 234 per cent.

Restaurateurs in particular are feeling the pinch. “When I first ran this restaurant 23 years ago, the rent was about £87,000 per year,” says Shun Bun Lee, manager of Harbour City restaurant. “At the moment, it is four times [that].”

Shaftesbury, a property management company that rents out space for 65 restaurants and bars in London’s Chinatown, dismisses the argument that rent increases are having a detrimental effect on the neighbourhood, saying rents have gone up steadily as they would in any prosperous city.

“London is thriving and this of course brings business and prosperity to Chinatown,” says Tom Welton, a director at Shaftesbury. He also insists that “we work with our tenants to promote Chinatown”.

However, rent is not the only issue that London Chinatown businesses have to struggle with. Last month they went on strike for two hours in protest against a crackdown on illegal workers by the UK Border Agency. They say the number of raids has increased, counting 13 in the six weeks leading up to the protest, and worry that when UKBA officers lock down an establishment it puts off customers and tarnishes the community’s reputation.

Young families, new immigrants, they’ve all moved away to areas with cheaper residential rents

– Siu Lam

Then there is the trouble that they have finding employees, especially when their children’s generation do not want to continue in the same line of business. Mr Lee has kept his 80-year-old dim sum chef and says with exasperation: “It’s strange to have Europeans cooking Chinese food.”

Elsewhere, particularly in the US, the residential nature of Chinatowns means homes are at risk, as well as businesses. On Eldridge Street in Manhattan’s Chinatown, it is not only the looming luxury apartment blocks being built on the area’s edges that symbolise the change 42-year-old Siu Lam has seen since arriving from Hong Kong 10 years ago.

Halloween costumes now hang from racks in her store, alongside Chinese New Year decorations, as she tries to cater for a new influx of non-Asian residents. Ms Lam’s family has been split by the changes that have pushed up the cost of living and doing business there – she says rent for her store has risen 50 per cent in the six years she has been running it. “Young families, new immigrants, they’ve all moved away to areas with cheaper residential rents, like Queens. My friends and family have all left.”

Jason Chan, co-ordinator of the Chinatown tenants union at Caaav, a community group, believes the only solution to the encroachment is to build more affordable housing units for the poorer residents.

“Overcrowding has become a huge problem as residents bunk together to save costs, while the few reasonably-priced residences that do exist are often poorly maintained by unscrupulous landlords,” he says.

San Francisco, which has an even larger residential community than New York, is experiencing a similar fate. A boom in Silicon Valley jobs has fuelled San Francisco’s property market, pushing prices up a quarter in August.

Rents in San Francisco soared 9.8 per cent in the third quarter compared with the year before. If studios are going for $2,000 a month outside Chinatown, suddenly one going for $1,000 in the area looks very attractive, argues Cindy Wu, vice-president of San Francisco’s city planning commission.

Landlords are using the Ellis Act, which allows owners to evict tenants so long as they do not subsequently rent the flat, to get rid of unwanted occupants, to sell the property.

But the community is not giving up without a fight. In San Francisco, protesters and tenants demonstrated outside city hall against evictions and property speculation in and around the Chinatown neighbourhoods, and the problem is gaining traction in the local press.

“Ellis Act evictions are like tumours plaguing the housing market in the city,” says Wing Hoo Leung, a resident on the outskirts of Chinatown, who with the help of community groups helped beat eviction five years ago. “This will evolve into an untreatable cancer if we don’t do something. We need to control the real estate speculators.”