October 14, 2003

Just a few years ago, artists were facing evictions and dramatic rent increases. Many venues closed and people lost studios or live/work places. Now, San Francisco is experiencing a real estate space glut.

Rents have dropped to 1992 levels, vacancy is significant and increasing -- SOMA vacancy rates are over thirty percent. Citywide, there are 17 million square feet of vacant space. Now is the time for the arts to take advantage of this dramatic turn of events to preserve current spaces and create new ones.

Finding a Space
Do some comparison shopping. Increasingly, listings are targeting artists and "creatives" since there are very few other tenants in the market for many of these buildings. One referral and support resource is the ArtHouse listing service, a telephone hotline of current rental listings. Workspace Ltd. is a new nonprofit-managed project with 54,000 square feet available for artist, artisan and nonprofit uses (see www.workspacelimited.org/ for details). Craigslist.org also has real estate listings.

If you are seeking a space larger than 1,000 square feet, consider talking to a real estate agent. There's no cost to the tenant who works with an agent -- leasing commissions are paid by the landlord. Agents are able to access information about the buildings and know the current market for lease terms. ArtHouse has a network of real estate agents interested in working with artists.

Keeping a space
Once you've found a space, read your lease. Your rights as a tenant are detailed therein. Most arts spaces are commercial leases. Unlike residential leases, they are not subject to rent control, and have a wide range of leasing terms.

Be sure that you're in compliance with the lease. Many tenants lost spaces because of lease compliance issues that were overlooked prior to the hot dot-com real estate market. But, thanks to the current real estate glut, if you secured your space anytime since 1999, you may be in a position to negotiate for better terms and ask for formal changes in your lease.

Figure out the rent level per square foot, the obligations for utilities, building improvements and other expenses, and the uses that are allowed in your space.

Determine if you've been complying with the lease, and if you would like to change the terms. You can initiate a discussion about changing lease terms by approaching your landlord.

Avoid misunderstandings -- get it in writing. Many artists already have long-term informal relationships with landlords that have allowed their uses of the space to extend beyond the "letter" of their lease. This puts you at risk of significant rent increases, eviction or misunderstanding.

Especially in times of high commercial vacancies and low rents, like now, landlords often look the other way when artists live in their studios. But if live/work is not legal in the space, the artist does not receive residential-tenant protections. Remember, live/work conversions are arduous due to the repeal of the live/work code.

Tenants often tell us that their landlord has promised them a long-term lease, but the actual lease is month-to-month. Try to secure a term lease (one-year, three-year, five-year or even longer), including options to renew and other terms. If work is required in your building to meet code upgrades, you might offer to fund a portion of that work in exchange for a long-term lease with a known rent level. Or agree to pay a higher rent if the landlord improves the space and gives you a longer term.

As a tenant renegotiating a lease, you can secure the services of a real estate broker or real estate attorney. ArtHouse has a breadth of resources to help the arts community in this capacity, and maintains a referral network of brokers and attorneys as part of its services. California Lawyers for the Arts also has a lawyer referral program that can provide access to real estate attorneys -- (415) 775-7200; www.calawyersforthearts.org/.

If you are in a residential lease, you can seek advice through the San Francisco Tenants Union (www.sftu.org/).

Kathleen Diohep is the Program Director and Financial Analyst for ArtHouse real-state service for the arts community; (415) 885-1194; www.arthouseca.org/.