Data Reveals Which Berkeley Commercial Areas Are In Decline

An analysis of vibrancy in Berkeley using sales tax data.

Disclaimer: This opinion and every opinion on my Substack represent my opinion alone or that of a guest author. It does not represent the opinion of my employer, any affiliate universities, or any public bodies I serve on.

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In the 1960s, backlash to California handling of post-war population growth by building apartments in residential neighborhoods led to statewide down-zoning, limiting new housing. By 1980, the state began requiring cities to plan for population growth every 8 years by allowing for more homes via up-zoning. The city of Berkeley has historically identified declining commercial areas for mid- and high-rise housing development.

Recent state and federal laws mandate that cities add new housing in state-designated neighborhoods with high incomes, with the intent of making unaffordable neighborhoods more affordable. The Berkeley City Council committed to the housing authority that we would increase height limits on Solano Avenue and Shattuck Avenue in North Berkeley, and the Elmwood shopping area on College Avenue.

Opponents of this plan argue that Downtown has been ruined and hollowed out by housing development and that these three commercial areas without new housing are far more vibrant because local businesses are spared disruptive housing construction. Others disagree, saying that Downtown is overall vibrant, despite the presence of two stalled housing projects in the area. It has become clear that people do not share a common definition of what makes a place feel vibrant.

Inspired by MissionLocal’s reporting, calculating vibrancy through sales tax revenue is a wise empirical approach. Sales tax actually tracks where people are spending their money. I’ve compiled the sales tax data from a public records request. Values are reported in nominal dollars, so I inflation-adjusted them to measure consistent purchasing power in 2025 dollars.

A district-to-district comparison of revenue doesn’t work without accounting for differences in size. So the sales tax values are normalized to the year 2014 (sales tax revenue = 100 in 2014), so that vibrancy is measured by how much a district’s sales tax revenue has increased or decreased since then. You can see the geographic boundaries for these commercial districts in the city’s annual reports. The year 2014 was firmly out of the Great Recession’s influence, it was the start of Downtown’s building boom, and it was key to another major event to be discussed at the end.

There are limitations with sales tax data. Industry-heavy West Berkeley heavily depends on bulk purchases of materials, while South Berkeley car dealerships are a major contributor to sales tax. These things do not translate to vibrant street areas and high foot traffic. Moreover, every commercial district in Berkeley has seen a decline in inflation-adjusted total sales tax revenue due to the pandemic and the decline of retail.

But the city tracks sales tax data by business type: food and beverage, retail, personal services, and other. Food and beverage is the city’s fastest-growing commercial activity. It became the primary sector in every commercial district except West Berkeley in the mid-2010s as retail declined. This sector typically results in the highest foot traffic: cafes, restaurants, bars, etc. Both total sales tax and food-based sales tax will be examined.

Let’s start with commercial districts in the city’s most middle and lower-middle class areas: University Avenue (west of MLK Jr. Way/excluding Downtown), San Pablo Avenue, South and West Berkeley.

Total Sales Tax performance is on the left. Food and Beverage-only sales tax is on the right.

Before the pandemic, West Berkeley had already declined by 20% in activity as big-box retail died out or moved to Emeryville, and industrial employers closed. San Pablo Avenue’s performance was stable but flat, as automotive businesses declined due to the rise of EVs and better vehicles. Simultaneously, new cafes and restaurants opened around University Avenue and Dwight Way intersections. Only South Berkeley grew before the pandemic, by an impressive 21% between 2014-19. Since 2022, South Berkeley has slowly declined every year and is currently down 25% compared to its 2014 performance. San Pablo Avenue has not recovered from its pandemic lows, tumbling down 35% since 2014.

Examining just food and beverage sales tax revenue alone, San Pablo Avenue’s performance is erratic. It had a powerful but brief post-pandemic recovery, which has stumbled since 2022. Even as industrial employers and retailers vacated, West Berkeley’s food and beverage sector had stabilized before the pandemic. West Berkeley’s recovery since the pandemic has been L-shaped. Population densification along San Pablo Avenue and in West Berkeley has been rather dispersed and infrequent since it was zoned for 4-stories in 1993.

University Avenue (which had distortionary outlier values in 2017 and 2018) is in long-term decline. Before the 1990s, it was an automotive drive-in destination, but now, new eateries have opened like Jaffa Coffee and Good Eats, alongside a few new apartments utilizing the rarely-used 4-story upzoning of 1996. Commercial activity around McGee and California Streets has been revitalized recently. After years of decline, 2025 was the first time since the pandemic that University Ave. posted positive food-based sales tax growth.

— North Shattuck, Solano Avenue, and The Elmwood —

In addition to the major commercial districts in the planned upzoning, the sales tax data also includes the Neighborhood Commercial (C-N) areas. Tiny commercial districts are scattered around MLK Jr Way, Gilman Street (Westbrae area), Hopkins Street, and along Claremont Avenue (Uplands and Domingo Avenue). They’re all grouped into one. No rezoning of these areas is planned, but they are in the higher-income districts of the city.

Total Sales Tax performance is on the left. Food and Beverage-only sales tax is on the right. Neighborhood Commercial sales tax began reporting in 2017 so values are normalized to that year.

North Shattuck and Elmwood appear to be performing exceptionally well post-pandemic, which explains the high merchant sensitivity about their rezoning. Yet, North Shattuck had grown by 4% by 2019, while Elmwood shrank by 15%. The Elmwood’s decline in the late 2010s was noticed by newspapers, such as this Daily Californian excerpt on its high vacancy rate and issues competing with Rockridge in 2018.

Elmwood in the 1980s modeled itself on 1940s nostalgia and neighborhood-serving businesses, explicitly resisting transformation into a regional-oriented dining and shopping area. Nevertheless, Elmwood saw the closure of retailers, laundries, groceries, and old-fashioned businesses like Ozzie’s Soda Fountain for food-based businesses. The theater was bought by a nonprofit funded by a city loan. The city council recently deregulated limits on the number of restaurants in the corridor. Post-pandemic, Elmwood has glowed up rapidly with cafes and eateries. Elmwood now has double the share of food-based businesses than the city-wide commercial district average, putting its once high vacancy rate to the lowest in the city (1.35% by square foot).

In contrast to Solano and Elmwood, North Shattuck is no stranger to new housing. Once controversial housing developments in the 1990s were built around Rose Street, and denser buildings between Hearst and Francisco on Shattuck in the 2000s. Commercial developers have turned declining department stores and gas stations into food courts like Epicurious Garden and the Crepevine building. The corridor is currently in the midst of two high-density housing projects and a cafe boom on its southern section. Before the pandemic, North Shattuck grew by 4% in total sales tax since 2014, and has shot up by 18% since 2022.

Solano Avenue has changed the least of the three districts and hasn’t had two consecutive periods of positive total sales tax growth since 2014. Opposition to upzoning has been smallest on Solano, and my neighbors feel the district is struggling with demographics. Total sales tax revenue was down 10% by 2019, and since 2022 its down another 17%. While North Shattuck and Elmwood have transitioned to a food-based economy, Solano’s food sales tax is down by 7% since 2014, although it has been improving since the pandemic.

Solano’s movie theater closed in 2010, and it’s not as populated with cafes besides Peet’s Coffee. The Thousand Oaks-Northbrae area has added 0 net housing units since 1980, per the Census, and is entirely zoned for single-family residences for over a mile in radius. Solano’s demographics are among the most elderly in the region because families with children cannot afford to move there. Yet, Solano has the second-lowest commercial vacancy rate in all of Berkeley (2%), showcasing how low vacancy doesn’t always explain high vibrancy.

— High-Density Districts: Downtown Berkeley and Southside Telegraph (between Dwight and Bancroft, only) —

Total Sales Tax performance is on the left. Food and Beverage-only sales tax is on the right.

Overall sales tax performance reveals that Southside Telegraph is the best performing commercial district over the last decade in Berkeley — and it’s not close. Telegraph had the smallest total sales tax contraction since 2014 of just -8.9% with second place North Shattuck at -15%, and +18.6% growth in food and beverage sales since 2014.

Downtown Berkeley is one of only four districts showing long-term positive growth in food and beverage. In 2025, Downtown’s food-based sales tax is up 5.4% since 2014 as new eateries like boba shops, organic bites, pizza and mainland Chinese cuisine have sprung up around Downtown. In 2010, two-thirds of city voters upzoned Downtown for residential mid and high-rises with the Downtown Plan of 2009, ushering in a building boom several years later. Total sales tax revenue increased in Downtown 10.3% by 2019.

The state of Downtown is typically compared to Elmwood and North Shattuck by opponents of the latest zoning plan, and this graph best lays out their differences in taxable activity over the decade.

Downtown Berkeley actually performed quite well between 2014 and 2019, considering it was the focal point of the city’s old department store buildings, which had closed or wound down as retail declined. Downtown also handled the pandemic well and outperformed Elmwood, North Shattuck and most Bay Area downtowns during the worst parts of the pandemic in 2021. New population growth downtown was supporting local business.

But after 2023, Downtown suddenly slipped, and has steadily dropped by 10% in total sales tax between 2022 and 2025 while Telegraph, Elmwood and North Shattuck recovered and surpassed Downtown last year. The cause appears obvious. In 2022, the stores under Shattuck Hotel were supposed to briefly close during construction next door, but the out-of-state commercial landlord who owned Shattuck Hotel’s retail space neglected to refill the stalls. Then the Walgreens closed Downtown, as they did throughout Berkeley, but the downtown location was earmarked for an embattled high-rise housing project whose conditions of approval took years and were quite expensive. It has since re-applied under the state’s new density bonus laws.

The redevelopment of the Center Street businesses for 456 housing units and pedestrian-only ground floor retail was uncontroversial during its permitting process. But approval of the project took 3 years, and by then, interest rates had shot up, the merchants were all relocated and now it lays vacant. Although the Center Street project appears to be resuming, these closed businesses have dampened downtown’s vibrancy for some time.

Rents in former department stores (many of these buildings are landmarked and not planned for development) have been increasing by commercial landlords as property values increase — creating vacancies. In today’s food-oriented economy, which requires only small stalls, the bigger the floorplan the more expensive the lease. The departure of Half Price Books from its building is another distressing sign for Downtown. It lacks class A facilities big retailers prefer that Fourth Street and Bay Street have, while also lacking low rents due to UC campus proximity inflating property value.

Southside Telegraph was upzoned by city council first in 2017 for mid-rises and again in 2022 for high-rises, with support of UC student leadership, but in an environment where the state had passed laws erasing many of the issues and years of obstruction Downtown dealt with. Several of the downtown projects (like the one behind Shattuck Cinemas) were fought for years and began construction a decade after they were proposed. By the time Southside was upzoned again in 2022, anti-high rise attitudes had dwindled.

Moreover, the Southside Plan differed from Berkeley’s old approach of only upzoning commercial corridors by broadly upzoning commercial and residential areas. Developers are often building over old houses and small apartments around high-intensity commercial buildings rather than exclusively over Telegraph’s commercial areas. The 2009 Downtown Plan limited upzoning to only commercial areas and actually downzoned adjacent residential areas. By the late 2010s, a lot of the old parking lots and auto shops downtown had been developed or were entitled and only commercial buildings were left.

— Final Rankings —

Taking the simple difference between 2025 and 2014 isn’t holistic because the revenue is often erratic, the economy changes throughout this period, and any start or stop year could be easily cherry-picked to change outcomes. When looking at the health of a commercial district, there are two important factors: growth and stability.

Averages are the ideal metric for stability. Sales tax reporting years can be broken down into three sub-categories: pre-pandemic (2014-2019), pandemic (2020-2022), and post-pandemic performance (2023-2025). Because University Ave.’s 2017 and 2018 data points are outliers, I’m excluding it from the final rankings.

Commercial Areas With Consistent Stability: Average Total Sales Tax Performance Index from 2014 to 2025. Averages closest to 100 had the best consistency and least volatility since 2014.

1. South Berkeley — 98.0

2. Southside Telegraph — 93.3

3. North Shattuck — 91.5

4. Downtown Berkeley — 90.9

5. San Pablo Avenue — 86.7

6. Elmwood — 86.3

7. Neighborhood-Commercial — 86.2

8. Solano Avenue — 83.6

9. West Berkeley — 80.9

Best Post-Pandemic Recovery: Average Total Sales Tax Post-Pandemic (2023-2025) divided by Average Total Sales Tax Pre-Pandemic (2014-2019):

1. Southside Telegraph — 82.39%

2. North Shattuck — 76.72%

3. Downtown Berkeley —76.19%

4. Solano Avenue — 73.80%

5. Elmwood — 72.20%

6. South Berkeley — 72.13%

7. San Pablo Avenue— 70.33%

8. West Berkeley — 68.47%

9. Neighborhood-Commercial — 64.41%

Food Economy Growth: Post-pandemic average food-based sales tax (2023-2025) divided by pre-pandemic average food-based sales tax (2014-2019):

1. Elmwood — 96.52%

2. San Pablo Avenue — 94.45%

3. Southside Telegraph — 94.40%

4. Downtown Berkeley — 94.03%

5. North Shattuck — 93.80%

6. Solano Avenue — 84.71%

7. South Berkeley — 73.57%

8. West Berkeley — 72.06%

9. University Avenue — 68.05%

10. Neighborhood-Commercial — 49.31%

There are two clear best-performing commercial districts in Berkeley, and it’s Southside Telegraph and North Shattuck. Downtown Berkeley also consistently places third or fourth among the top growing districts and only began faltering after 2022. Elmwood is the inverse in that it spent most of the decade declining and since the pandemic has found a strong growth spurt.

Telegraph, North Shattuck, Downtown and Elmwood — the city’s best performing districts — all have something in common. All are within walking distance of each other and within a 1-mile radius of UC campus. Elmwood is just four blocks away from the Southside-Telegraph district, and most people would be hard-pressed to find the demarcation between North Shattuck and Downtown Berkeley, especially since apartments with vibrant ground-floor commercial replaced the parking lots between them in the 2000s.

A theory is that population growth in Downtown and Southside, along with increased UC enrollment, increased demand and vibrancy on North Shattuck and Elmwood. Thousands of new residents in Downtown and Southside can and do obviously walk or take a very short bus ride to North Shattuck and Elmwood. It would explain why Solano Avenue and the neighborhood mini-districts, which are not as close to growth areas and have demographics similar to North Shattuck and Elmwood are struggling.

There are districts in Berkeley whose performance could be classified as in decline, and the worst appears to be West Berkeley. In 2014, voters in Berkeley were given the choice to upzone sections of West Berkeley for 7-story dwellings. This would’ve expanded the housing projects around Fourth Street and University Avenue to several parking lots and commercial areas. The arguments for and against Measure T sound very similar to our zoning battles today. The rallying cry was “SAVE WEST BERKELEY”, a coalition of anti-development activists and prominent merchants. Councilmembers and early urbanists argued that West Berkeley needed population growth to survive de-industrialization, while opponents charged that West Berkeley’s historic commercial sector and industry would be destroyed by developers.

The upzoning lost by 500 votes. Eleven years later, West Berkeley is the worst-performing commercial district in the city. Manufacturing has vacated, retailers went to Emeryville (which now has a fiscal capacity 2.4 times the size of Berkeley’s per-capita), and small businesses specializing in food and beverage are down by 35% in taxable activity compared to 2014. It’s doubtful the modest re-zoning would’ve saved West Berkeley, but it is our largest commercial district contributing the highest sum of sales tax to our annual budget, and its future requires more radical attention than we’re giving it.

I’ll talk about what conclusions can be drawn from all this in Part 2. But it’s important that as these debates about commercial vibrancy repeat every few years that we have some measurement for vibrancy and not just vibes. Today it’s Corridor Upzoning and Downtown, tomorrow it’ll be the Hopkins bike lanes battle, soon car-free Telegraph, and in 2032 the next area rezoning.

Lastly, as someone from West Berkeley, just because a district’s activity is down does not mean its merchants and residents are disposable. This data should start conversations, not end them.