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It's not clear that there's a failure. The overall retail vacancy rate in the US is around 11% [0]. The article didn't give an overall statistic, but it's not c
by tlb 10y ago
It's not clear that there's a failure. The overall retail vacancy rate in the US is around 11% [0]. The article didn't give an overall statistic, but it's not clear the average NYC high-end vacancy rate is any higher.
A 0% vacancy rate is impossible: nobody could move. To have liquidity and stabilize economic cycles, you want to average somewhere around 10% vacancy. So the system is working fine.
[0] http://www.statista.com/statistics/194102/us-retail-vacancy-rate-forecasts-from-2010/ http://www.statista.com/statistics/194102/us-retail-vacancy-...
- tacostakohashi 10y agoOr, to the extent there is a market failure (indeed, this is unclear) it's just because the landlords don't pay the cost of the externalities - reduced neighborhood amenity, low competition / higher prices. These fall on the residents, and if they felt strongly enough about it they could stop it from being an externality by instituting a vacancy tax, buying the properties and renting then to artist at a loss, whatever.