13 ms·

How Manhattan Became a Rich Ghost Town

139 points by ninkendo 8y ago

sarabande 8y ago
It seems to me like in big cities, as this article describes what eventually will happen is the rich will buy up the property because nobody else can afford it, service workers won't be able to actually live within a reasonable distance in order to work there, and the city will exist mainly for 1) wealthy professionals, 2) people who use real estate to park their money, and 3) tourists. Regular working-class folk disappear. When one visits the city in the daytime, it seems like it has activity because of the tourists, but it has no real indigenous activity. Perhaps that's the steady state, because there are enough tourists to keep the city going economically.
- buf 8y ago
  Completely agree.
- wgerard 8y ago
  Anecdotally, that doesn't really seem to be the problem with New York and definitely not the problem the article is talking about. Ground-level stores don't seem to be suffering from staffing issues, largely because in New York it's not uncommon to work in Manhattan but live in Staten Island or Jersey. Instead, ground-level stores seem to be disappearing because commercial lease agreements are just insanely expensive and onerous. Landlords refuse to reduce rents (for several purported reasons) in an increasingly buyer-friendly real estate market.
  - Nav_Panel 8y ago
    Yep. Walk down Bleecker St where my parents used to hang out in the 80s and it's a ghost town. Apparently the historic neighborhood designation means it takes over 10 months for any lease application to close, as it needs to be approved by the historic neighborhood board. Once approved, it often requires a significant amount of capital to build the proposed establishment in a compliant way. Businesses don't even bother trying.
  - Wowfunhappy 8y ago
    And, this feels like an issue that will naturally fix itself over time, as landlords realize what they're asking for isn't reasonable.
    - neuromantik8086 8y ago
      > And, this feels like an issue that will naturally fix itself over time, as landlords realize what they're asking for isn't reasonable. Except it won't, exactly because landlords are rational actors. Let's say the upkeep for a space is $400/mo, and the rental for that same space is 3000/mo. A storefront could be vacant for 2 years and a landlord would still turn a hefty profit if they were able to get someone to sign a one-year lease after the 2 years of vacancy. NYC is a big place- for every 30000 people that think that the rent is unreasonable, there's 1 person who thinks that it is, and landlords only need that 1 person. Renters have no leverage here.
      - naravara 8y ago
        This is why property and land taxes are good. Land is, as they say, the only thing they're not making any more of. If you're owning it and not putting it towards any productive use you ought to pay back into the commons for the lost utility.
        kenmicklas 8y ago
        In this case property tax (the non-land component of it) only exacerbates the problem though.
      - notatcomputer68 8y ago
        But what about the landlords mortgage?
      - charlesdm 8y ago
        "Hefty profit"? I don't see how that is good investing -- properties sell based on yield. If someone buys a prime property and it generates 3 or 4% per year.. then they're not going to let it sit empty for two years. Renters do have leverage here. You're not going to get it for $1000, but you might for $2500 or $2200.
- adrianN 8y ago
  Those have to be really big cities, because in cities with reasonable public transport you can hop on a train or a bus from basically anywhere within city limits and reach the expensive center in less than half an hour.
  - naravara 8y ago
    >cities with reasonable public transport Does NYC qualify? I think you can still hit theoretical under-half hour times if you manage to get the subway right as your train comes in and don't have to walk too far from the stations to the doors. But if you live in New York the psychological barrier of dealing with that crap is big enough that people tend not to do it outside of commuting. It's a chore to get someone in Brooklyn to come into the city to hang out unless it's right after work. And vice versa.
    - ascagnel_ 8y ago
      NYC has some of the best, if not the best, public transport in the US. > It's a chore to get someone in Brooklyn to come into the city to hang out unless it's right after work. And vice versa. The issue, I think, is that young professionals have largely been priced out of Manhattan, and the East River acts as a psychological boundary. Even if it's just a short trip, you're still leaving/entering "the city". As a side anecdote, the club Maxwell's in Hoboken closed a few years ago; the reason given was that most of the bands that played there were willing to cross one river to play a gig, but only a small fraction were willing to cross both, even though the trip wasn't substantially longer.
      - naravara 8y ago
        >NYC has some of the best, if not the best, public transport in the US. This seems like damning with faint praise to anyone whose been to a developed city in East Asia or Western Europe.
- aylmao 8y ago
  A look at the financial district in NYC reveals this. During the day the place is very active, but during the night the whole thing dies out.
  - johnmyleswhite 8y ago
    But the Financial District was much emptier at night historically than it is now, so I'm not sure this is closely linked to the article's claims.
  - vivism 8y ago
    It is still recovering from 9/11.
- samstave 8y ago
  See my comment ITT regarding Lake Tahoe - this has already happened there.
- lumberjack 8y ago
  This is exactly what happens to the historic centres of some European cities. But the life of the city just moves to the outskirts for the most part.
- asauce 8y ago
  This is exactly what is happening in Vancouver. The rich have parked their money in downtown real estate, so the working class is being pushed further and further out of the downtown district.
roenxi 8y ago
Is there some legal issue at play here that the article isn't drawing attention to? Why is it a better idea to leave a property vacant than to have a short-term tenant?
- JansjoFromIkea 8y ago
  Probably something to do with contract lengths? I can't imagine many businesses wanting to rent a place for less than 2 years (to the point that there may be legal requirements for longer contracts?) and landlords might turn down offers for leases that long that are below what they perceive the value of the place being.
- jannotti 8y ago
  I thought the problem was almost the opposite of what the article discussed. I thought that commercial real estate almost always used long term leases and that owners are reluctant to sign them in a fast rising market. If your building is vacant, there is the possibility of selling to a developer with plans for a big development in the short term. That would argue for being pretty happy about short-term leases, since they maintain that flexibility. But I don't really know much about this, I'd like to understand it better.
  - wgerard 8y ago
    > in a fast rising market Everything I've read about New York real estate has suggested that it's slowing down considerably and pretty buyer-friendly right now. Granted that's mostly about residential real estate, but I wouldn't be surprised if it's the same with commercial as well, and would certainly explain the reluctance to sign short-term leases.
  - JamesBarney 8y ago
    It's hard to do short term commerical leases. One the build out costs lots of money and if the owner doesn't renew you've lost $60,000. Two if you end up with a successful coffee shop/bar/etc the owner can squeeze you out of every dime of profit because it's disastrous to most of these establishments to move. It means that there's just not a lot of demand for short term commerical leases. Exceptions are seasonal stores like a Halloween or Christmas store who are happy to sign a short term lease, usually at a discount.
village-idiot 8y ago
I actually think that we no longer live in a capitalistic system. A lot of firms continue to behave in ways that capitalism should punish, but doesn’t. My current running theory is that our economy is more based around rent extraction, largely from land and companies that wield effective monopolies or oligopolies, rather than competition. This explains why we keep seeing things that make no sense from a capitalist point of view.
- pavlov 8y ago
  Sounds like you're discovering Marx independently?
  - village-idiot 8y ago
    Probably. I’ve only read parts of Capital, it’s too dense for me to make good headway on. I’m also heavily informed by the Anarchist Sociologist David Graeber’s book of “Bullshit Jobs, a Theory”. He points out that a significant percentage of jobs—he estimated 40%—don’t even serve an economic purpose, let alone a moral or social one. This is something that capitalism in theory should not allow, which is why I think we’re trending to somewhere else.
    - olivermarks 8y ago
      Recommend reading Bakunin if you are interested in 'anarchist socialism' https://en.wikipedia.org/wiki/Mikhail_Bakunin https://en.wikipedia.org/wiki/Mikhail_Bakunin Marx was a pied piper to nowhere IMO and in league with the oligarchs and bankers of his era
  - Agathos 8y ago
    Sounds more like Luigi Zingales, who is about as far from Marx as you can get.
- apineda 8y ago
  Debt based capitalism. Print money and everything flips upside down.
namdnay 8y ago
Here's my opinion on what will happen on a longer time scale: Eventually the tourists will stop coming, because there are other parts of town with more atmosphere. Businesses will start moving out to other parts of town because of the cost of rent and lack of customers (due to no residents or tourists), and eventually the "city center" will defacto move. The only people who will lose out are the people who used it to park their money!
- chasing 8y ago
  I think this is sort of happening in NYC: The center of gravity is sort of moving to Brooklyn since it's cheaper, there's more space, it's more interesting, etc. And depending where you are, Manhattan is still very accessible. Obviously the key NYC tourist targets aren't moving, but anecdotally I am seeing an uptick of tourists in my 'hood. For what it's worth.
  - Takizawa 8y ago
    Interesting that you mention the shift of the center of gravity. I would add that there are multiple competing shifts. Flushing, for example, has now become a viable, small city within New York City.
    - mtanski 8y ago
      There's tons of towns within towns in NYC. I will not name them here. Everyone please go visit Manhattan.
  - swarnie_ 8y ago
    I haven't been in Brooklyn for getting on 10 years. Can you elaborate on what popular tourist friendly areas are now about? (I'm in NYC in March '19)
    - wgerard 8y ago
      Williamsburg, Dumbo, Park Slope, downtown Brooklyn, just to name a few. I'll spare Brooklyn residents the pain of ratting out their less well-known haunts.
ardit33 8y ago
I live in manhattan and I feel this story is a bit exaggerated, or at least I don't see the author's reality. (Him quoting a Real Estate firm, which is interested in activity, doesn't give credence to the data). The turnaround of restaurants and bars here is amazingly fast. When one fails, another one springs up. The same street will have very different storefronts each year. I once asked a restaurant owner, on how is this possible. He told me: Rent is expensive, and if you open a restaurant that is not doing well (attracting the clientele to afford staying afloat), is it much better to shut it down otherwise it becomes a huge money pit. What often happens is this: One person signs a long term lease for some kind of business (retail, food, whatever). The business is not doing well, he decided to shut it down and sub-lease the space. (this is easier when the market rates have risen). The second guy does give a try to his dream bar/restaurant/retail. If it doesn't work, he is forced to shut it down as well, rinse and repeat until you have a business that has the right winning formula and sticks around. This is 'creative destruction' on steroids. What I have seen in manhattan since I moved here in 2013: More hipster style coffee shops. More pizza places. Less "cheap" retail, and more luxury good stores. So, he is right, that cheap retail is generally pushed out because of the amazon effect, but in the other hand things like "thrift / second hand clothes" stores, are doing well. What is replacing those 'cheap' stores is generally things in the food business: Cupcake stores, Ice Scream Parlors, Yogurt bars, and yes nail saloons as well. But my success story (at least for my part), are coffee places. Birch Coffee, Tobby's Estate, Greggory's Coffee, etc.... all started in NYC, and they are striving and opening in countless locations.
- njn 8y ago
  Right, cause coffee is so hard to make yourself. I guess I'll never understand the point of hipster coffee shops. I'm all for cozy cafes, but all the hipster style coffee places, like 9th st. espresso, are the opposite of that: more catering to the trendy, minimalist, i3-gaps ikea aesthetics of the mainstream of /r/unixporn.
  - sergius 8y ago
    They provide a place to sit and use free WiFi...
qubax 8y ago
It became a ghost town because of the elites and their supporters like theatlantic. Manhattan now is just a place where people from the outer boroughs, nj, connecticut, etc come to work and then go home. For a city that pretends to "never sleep", it is just a dead city at night. Queens, brooklyn, etc is more lively and other cities around the world like prague, barcelona, seoul, tokyo, osaka, etc are far more vibrant. Manhattan is just a hellhole now for the world's wealthy and annoying tourists who are too stupid to realize that sbarro's isn't real ny pizza and all the worthless trinkets they buy are trash. But at least there is a bank every other corner. The sad part is manhattan is a blueprint other cities love to copy so in 10 or 20 years, most cities around the world will be boring tourist traps like manhattan.
- olivermarks 8y ago
  We are seeing the same pressures and bland out in San Francisco
  - qubax 8y ago
    I hear LA ( downtown ) is turning into manhattan as well. The earth is turning into a world of boring stale cookie cutter cities full of starbucks and mcdonalds.
    - djrogers 8y ago
      LA’s downtown barely existed at all 20 years ago, and now it’s bustling and vibrant.
  - seppin 8y ago
    lol SF never had 1/10 the vibrancy NY had, or has.
    - olivermarks 8y ago
      True. Very different culture and not a late night city...
- 8y ago
ilamont 8y ago
In Boston, there was a debate recently about 50 empty ground-level retail spaces on Newbury Street, an old street in the center of town long considered a place for luxury boutiques/salons/etc. But others questioned the data: https://www.universalhub.com/2018/lot-empty-storefronts-newbury-street https://www.universalhub.com/2018/lot-empty-storefronts-newb...
- achileas 8y ago
  I live in that neighborhood, and as the article says it looked like it was mostly a ton of turnover. There's a lot of it on Newbury, which is a problem in its own right, and the places that remain are largely regional and national chains. The costs are also driving people to move to other neighborhood and towns, with Eastie, Somerville, and Southie growing much more than the traditionally desirable neighborhoods in Boston. Anecdotally, the company my wife works for has a presence on Newbury, they're a large national chain, and the store (a flagship) has one of the lower sales volumes in the entire region, despite being one of the most expensive rents the company holds. The problem is manifold here - rising business rents pushing businesses out, rising residential rents pushing people that aren't tourists out, and likely more that I'm less familiar with.
March_f6 8y ago
I lived in NYC from 2009 to 2017 and can affirm the author's feeling. Over the span of those years, and mostly as of late, I saw many of my favorite brick and mortars (Rare books, sporting goods shops, record stores, etc.) all be replaced by coffee shops or juice places. Granted each of the above mentioned places have challenges with their respective industry but the feeling still stands. Having been born in North Texas, I can also affirm the changing topography of America due to traditional brick and mortars being ousted. My hometown was once called the "Little Austin". It's now overrun with mini-mall strips that hold duplicates of things set up on the other side of town. (How many mattress stores and Sonics does a town of 100,000 need?) The recent bankruptcy of Sears is another example where we will likely see large buildings across the country left empty and whose re-purposing will be contingent on state/city zoning laws (Texas doesn't have any) and rent. That is, why should I pay to reuse Sears's old building when the state/city will let me build a brand new building right down the highway?
- altoidaltoid 8y ago
  "How many mattress stores and Sonics does a town of 100,000 need?" http://freakonomics.com/podcast/mattress-store-bubble/ http://freakonomics.com/podcast/mattress-store-bubble/
  - abakker 8y ago
    https://www.wsj.com/articles/mattress-firm-files-for-chapter-11-bankruptcy-1538745006 https://www.wsj.com/articles/mattress-firm-files-for-chapter... Short answer: fewer.
- AnimalMuppet 8y ago
  I'm pretty sure that, just as you pay to reuse Sears' old building, you also pay to build a new one. If the Sears building is cheap enough to be worth the remodel (plus the awkwardness of using a building that isn't custom-built for what you have in mind), well, then you reuse the Sears one.
- swedishfish 8y ago
  Well now I'm curious. Which town in North Texas used to be called "Little Austin"? Denton??
sbussard 8y ago
Gentrification of the wealthy?
empath75 8y ago
I think it’s more of a result of absentee landlords building a real estate portfolio that they don’t really give a fuck about as building managers. They’re flipping these buildings just like houses were being flipped before the financial crisis. Having renters in there just complicates things. There’s a metro stop out here in northern Virginia that has a beautiful office building on top of it designed by a top architect and it’s _empty_. For at least a year now. And they’re building two more office buildings in the same location. They’re probably just all going to end up being managed by WeWork. The whole thing reeks of a bubble to me.
tyu1000 8y ago
I had read a bunch of these stories before going to NYC as a tourist a few weeks ago. I didn't see a single block that was full of empty storefronts and the whole city was packed and vibrant as usual. Bought some clothes at temporary popups as well.
davidf18 8y ago
I live in Manhattan and the cost of rents and housing has been increasing primarily through rent-seeking behavior which limits housing density creating an artificial scarcity in land leading to a high cost of living. Simply fixing the zoning density restrictions would reduce the rent-seeking or "market failure" and would lower the cost of living in NYC. See Harvard Economist Edward Glaeser's work for more details. Build Big, Bill http://www.nydailynews.com/opinion/build-big-bill-article-1.1913739 http://www.nydailynews.com/opinion/build-big-bill-article-1.... There is a NY State mandated minimum wage law that has been hurting many stores and has increased the cost of food in grocery stores, for instance. It was mandated to $11 / hr to $13 (today, I think) to $15. Thus, the real issue is the market failures in housing caused by politicians who limit the zoning density. The State, addressing the high cost of housing not by fixing the rent-seeking instead decided to increase minimum wage to a level that many independent establishments can no longer afford to stay in business.
samstave 8y ago
If you want to see a ghost town - Tahoe City Ca is decimated by AirBnB+Money. I grew up there, and I was there last weekend for my Dad's memorial service.... I hadnt been back to Tahoe City for some time - and man, its freaking depressingly bad. The "mall" -- the Boat Works, has basically 4 shops any longer, the retail spaces near Tahoe City Golf is boarded up and has weeds - many retail spaces are empty, the freaking BANK had to close, restaurants arent doing well according to several people I know who have worked in them for ~35 years (at SunnySide, for example).... and all my Dad's freinds/contemporaries blame SV Money + AirBnB -- in that there are no places for anyone to live. Houses arent being rented to people who would want to live there - both seasonally or long-term. All the cheaper houses were bought up over the last decades and rebuilt with $1MM++ homes in their place (This happened to one area which was the "ghetto" in the 80s when I was a kid - where all the houses were replaced with >$1MM homes and became one of the most expensive zipcodes in the country - whereas it was where all the "poor" kids lived in the 80s)
- naravara 8y ago
  I think a lot of economic models severely underrate the extent to which overheated real-estate markets eat economic vitality alive. It's because most of the costs they impose (initially) aren't that easy to quantify, but you're basically grinding your seed corn by making it impossible for working people to be able to afford to live and making it impossible for small businesses that aren't bars or restaurants to have a viable business model. Where's your next generation of innovation going to come from when you've done that? What happens to the community that lives in a place when the people with all the land and political power have no stake in the community itself?
- dba7dba 8y ago
  It's sad to see long term residents getting priced out of a community, and the city/neighborhood turning into playground/home of mostly rich. Same thing is happening near Silicon Beach in southern California, that is coastal cities near where Youtube/Google/snapchat have HQ or satellite offices. Santa Monica housing price has long ago gone Manhattan, NY like. Just use google map and realty websites, and check house price history in cities adjacent to Santa Monica. It's gone up 100% or more in last 5 years or so. It is not uncommon to see a 50+ year old house with little land get sold for nearly a million dollars, and be razed/remodeled into an easily 2 million or more house. Some retiree who sold the old small house certainly made bank. But who has 2 - 3 million dollars or the ability to take on a debt of that magnitude?
megaman8 8y ago
It's not just Amazon. The next generation is far less materialistic than generations of the past. No one can blame them for not wanting to spend 500$ on a Gucci gucci bag or 400$ on overpriced jeans, especially when they've got all that student debt. Workplace clothes are changing as well. Less people are opting for the fancy suits. Retail needs to keep up with the changes and start offering something people actually want, like: coffee bars, museums, libraries, book exchanges, 2nd hand stores, places that offer experiences (like sculpting classes, etc). Or here's a crazy idea: let's actually start using some of the 2nd floor+ space for housing/residential and maybe the place won't be such a ghost town when more people can afford to live there.
- wgerard 8y ago
  > The next generation is far less materialistic than generations of the past. Ehhhh, I dunno that I'd go that far. It's just different shit. I think we all know plenty of people lined up the second a new iPhone or Pixel is announced.
  - naravara 8y ago
    Materialism probably isn't the word, but conspicuous consumption of consumer goods (say that 5 times fast) is definitely less of a thing among the urban set than it used to be in the 80s and 90s. I wouldn't categorize smartphones as conspicuous consumption per se, because even when blinged out in gold they still tend to be pretty understated in comparison the the dinner-plate sized Breitlings that finance bros used to wear. The culture at one point used to be REALLY insistent on showing off that you drink only the finest wines, eat the fanciest steaks, and so on. Trump is basically like, a distilled down and exaggerated throwback to this sort of tendency to buy stuff more to announce "I'M RICH BITCH!" than to actually enjoy the thing itself. Insofar as millennials are still materialistic, I'd categorize it more as conspicuous consumption of "experiences." So rather than buying fancy things to announce how rich you are, you just post instagram pics of yourself in fancy places. If not for the carbon emissions from jet fuel, it would probably be a way more environmentally friendly way of being a status-whore all things considered.
jotjotzzz 8y ago
I've lived and grew up in NYC for almost 30 years and I agree with the author. Manhattan has become an unaffordable ghost town. Walk down West Village, Union Sq, Flatiron, etc.., you see rows of closed stores that have gone vacant for a very long time now. In contrast, I was in London recently and that city was thriving compared to Manhattan, it was lively and beautiful. In addition, NYC Subway and transportation is a disgrace. It is on its way to becoming a third-world country equivalent. This was due to mismanagement and corruption. You won't notice how Manhattan has deteriorated until you leave the U.S. and visit other cities in Europe and especially Asia. Even Thailand's subway system is a hell of a lot better than the NYC subway.
- lozaning 8y ago
  I travel frequently through all sorts of parts of Asia for work and am always so jealous of the subways over there. I speak all of 4 words of mandarin, but have never gotten lost or had difficulty navigating. I wish I could say the same for Bart, which I'm embarrassed to admit still frequently gets the better of me.
- jganetsk 8y ago
  I find London to have the same problems in terms of being full of chain stores and losing the kinds of character that the author describes.
- ascagnel_ 8y ago
  The thing I find craziest about Union Square is the number of drugstores. Just along the south end of the square, you've got Walgreen's (a national brand) and Duane Reade (which used to be independent, but is now a local brand for Walgreen's) 600ft. or so apart from each other. How in any way is that sustainable?
  - dbattaglia 8y ago
    Across the street from my apartment on 14th and 1st there is a Duane Reade and CVS literally attached to each other. It’s pretty crazy. The CVS is old and grungy, Duane Reade newer and larger (3 floors). I suspect those differences, plus possibly prople’s dependence on a certain pharmacy brand (thanks to their health insurance) is what allows them both to stay open.
pontifier 8y ago
Paying rent is for suckers.
- effingwewt 8y ago
  Or, you know, for people who can't afford to buy.
  - pontifier 8y ago
    If you can't afford to buy, then you doubly can't afford to rent. Money spent on rent is essentially burned. Do everything you can to avoid it.
    - deleted 8y ago
      [deleted]
whack 8y ago
Let's recap the author's main points: - Retail revenues are not rising as fast as rent - Hence, shopping/merchandise stores are being replaced by bars/restaurants/coffee-shops etc Ie, businesses that sell stuff are being replaced by businesses that sell experiences. Great! Consumerism and materialism is a black hole for your soul. What I really care about are vibrant experiences. Interesting bars/restaurants where my friends and I can hang out. Great live theater where I can watch the arts. And yes, even stimulating coffee shops where I can spend the day reading and writing. Want to go shopping for goods? Go online where you can shop to your heart's content. I'm glad the city's valuable real estate is being taken over by businesses that are more focused on human interactions. For the record, I've lived in Manhattan for many years in recent times, and it has never once felt like a ghost town. I've heard many complaints about the city, but I've literally never heard anyone else complain about it feeling like a ghost town, or anything even similar. Living in suburbia though...
- malvosenior 8y ago
  Paying for experiences like this is still consumerism.
  - whack 8y ago
    On a technical level: depends on how you're defining consumerism. See: https://www.merriam-webster.com/dictionary/consumerism https://www.merriam-webster.com/dictionary/consumerism https://www.investopedia.com/terms/c/consumer-goods.asp https://www.investopedia.com/terms/c/consumer-goods.asp At a deeper level: research has shown that spending money on experiences enriches your life far more than spending money on "things". That's what I'm referring to. https://www.bloomberg.com/news/features/2017-02-28/why-you-should-buy-experiences-not-things https://www.bloomberg.com/news/features/2017-02-28/why-you-s...
    - kbob 8y ago
      "Consume" literally means "eat". So eating out is definitely consumerism.

139 points by ninkendo 8y ago

It seems to me like in big cities, as this article describes what eventually will happen is the rich will buy up the property because nobody else can afford it, service workers won't be able to actually live within a reasonable distance in order to work there, and the city will exist mainly for 1) wealthy professionals, 2) people who use real estate to park their money, and 3) tourists. Regular working-class folk disappear. When one visits the city in the daytime, it seems like it has activity because of the tourists, but it has no real indigenous activity. Perhaps that's the steady state, because there are enough tourists to keep the city going economically.

buf 8y ago
Completely agree.
wgerard 8y ago
Anecdotally, that doesn't really seem to be the problem with New York and definitely not the problem the article is talking about. Ground-level stores don't seem to be suffering from staffing issues, largely because in New York it's not uncommon to work in Manhattan but live in Staten Island or Jersey. Instead, ground-level stores seem to be disappearing because commercial lease agreements are just insanely expensive and onerous. Landlords refuse to reduce rents (for several purported reasons) in an increasingly buyer-friendly real estate market.
- Nav_Panel 8y ago
  Yep. Walk down Bleecker St where my parents used to hang out in the 80s and it's a ghost town. Apparently the historic neighborhood designation means it takes over 10 months for any lease application to close, as it needs to be approved by the historic neighborhood board. Once approved, it often requires a significant amount of capital to build the proposed establishment in a compliant way. Businesses don't even bother trying.
- Wowfunhappy 8y ago
  And, this feels like an issue that will naturally fix itself over time, as landlords realize what they're asking for isn't reasonable.
  - neuromantik8086 8y ago
    > And, this feels like an issue that will naturally fix itself over time, as landlords realize what they're asking for isn't reasonable. Except it won't, exactly because landlords are rational actors. Let's say the upkeep for a space is $400/mo, and the rental for that same space is 3000/mo. A storefront could be vacant for 2 years and a landlord would still turn a hefty profit if they were able to get someone to sign a one-year lease after the 2 years of vacancy. NYC is a big place- for every 30000 people that think that the rent is unreasonable, there's 1 person who thinks that it is, and landlords only need that 1 person. Renters have no leverage here.
    - naravara 8y ago
      This is why property and land taxes are good. Land is, as they say, the only thing they're not making any more of. If you're owning it and not putting it towards any productive use you ought to pay back into the commons for the lost utility.
      - kenmicklas 8y ago
        In this case property tax (the non-land component of it) only exacerbates the problem though.
    - notatcomputer68 8y ago
      But what about the landlords mortgage?
    - charlesdm 8y ago
      "Hefty profit"? I don't see how that is good investing -- properties sell based on yield. If someone buys a prime property and it generates 3 or 4% per year.. then they're not going to let it sit empty for two years. Renters do have leverage here. You're not going to get it for $1000, but you might for $2500 or $2200.
adrianN 8y ago
Those have to be really big cities, because in cities with reasonable public transport you can hop on a train or a bus from basically anywhere within city limits and reach the expensive center in less than half an hour.
- naravara 8y ago
  >cities with reasonable public transport Does NYC qualify? I think you can still hit theoretical under-half hour times if you manage to get the subway right as your train comes in and don't have to walk too far from the stations to the doors. But if you live in New York the psychological barrier of dealing with that crap is big enough that people tend not to do it outside of commuting. It's a chore to get someone in Brooklyn to come into the city to hang out unless it's right after work. And vice versa.
  - ascagnel_ 8y ago
    NYC has some of the best, if not the best, public transport in the US. > It's a chore to get someone in Brooklyn to come into the city to hang out unless it's right after work. And vice versa. The issue, I think, is that young professionals have largely been priced out of Manhattan, and the East River acts as a psychological boundary. Even if it's just a short trip, you're still leaving/entering "the city". As a side anecdote, the club Maxwell's in Hoboken closed a few years ago; the reason given was that most of the bands that played there were willing to cross one river to play a gig, but only a small fraction were willing to cross both, even though the trip wasn't substantially longer.
    - naravara 8y ago
      >NYC has some of the best, if not the best, public transport in the US. This seems like damning with faint praise to anyone whose been to a developed city in East Asia or Western Europe.
aylmao 8y ago
A look at the financial district in NYC reveals this. During the day the place is very active, but during the night the whole thing dies out.
- johnmyleswhite 8y ago
  But the Financial District was much emptier at night historically than it is now, so I'm not sure this is closely linked to the article's claims.
- vivism 8y ago
  It is still recovering from 9/11.
samstave 8y ago
See my comment ITT regarding Lake Tahoe - this has already happened there.
lumberjack 8y ago
This is exactly what happens to the historic centres of some European cities. But the life of the city just moves to the outskirts for the most part.
asauce 8y ago
This is exactly what is happening in Vancouver. The rich have parked their money in downtown real estate, so the working class is being pushed further and further out of the downtown district.

roenxi 8y ago

Is there some legal issue at play here that the article isn't drawing attention to? Why is it a better idea to leave a property vacant than to have a short-term tenant?

JansjoFromIkea 8y ago
Probably something to do with contract lengths? I can't imagine many businesses wanting to rent a place for less than 2 years (to the point that there may be legal requirements for longer contracts?) and landlords might turn down offers for leases that long that are below what they perceive the value of the place being.
jannotti 8y ago
I thought the problem was almost the opposite of what the article discussed. I thought that commercial real estate almost always used long term leases and that owners are reluctant to sign them in a fast rising market. If your building is vacant, there is the possibility of selling to a developer with plans for a big development in the short term. That would argue for being pretty happy about short-term leases, since they maintain that flexibility. But I don't really know much about this, I'd like to understand it better.
- wgerard 8y ago
  > in a fast rising market Everything I've read about New York real estate has suggested that it's slowing down considerably and pretty buyer-friendly right now. Granted that's mostly about residential real estate, but I wouldn't be surprised if it's the same with commercial as well, and would certainly explain the reluctance to sign short-term leases.
- JamesBarney 8y ago
  It's hard to do short term commerical leases. One the build out costs lots of money and if the owner doesn't renew you've lost $60,000. Two if you end up with a successful coffee shop/bar/etc the owner can squeeze you out of every dime of profit because it's disastrous to most of these establishments to move. It means that there's just not a lot of demand for short term commerical leases. Exceptions are seasonal stores like a Halloween or Christmas store who are happy to sign a short term lease, usually at a discount.

village-idiot 8y ago

I actually think that we no longer live in a capitalistic system. A lot of firms continue to behave in ways that capitalism should punish, but doesn’t. My current running theory is that our economy is more based around rent extraction, largely from land and companies that wield effective monopolies or oligopolies, rather than competition. This explains why we keep seeing things that make no sense from a capitalist point of view.

pavlov 8y ago
Sounds like you're discovering Marx independently?
- village-idiot 8y ago
  Probably. I’ve only read parts of Capital, it’s too dense for me to make good headway on. I’m also heavily informed by the Anarchist Sociologist David Graeber’s book of “Bullshit Jobs, a Theory”. He points out that a significant percentage of jobs—he estimated 40%—don’t even serve an economic purpose, let alone a moral or social one. This is something that capitalism in theory should not allow, which is why I think we’re trending to somewhere else.
  - olivermarks 8y ago
    Recommend reading Bakunin if you are interested in 'anarchist socialism' https://en.wikipedia.org/wiki/Mikhail_Bakunin https://en.wikipedia.org/wiki/Mikhail_Bakunin Marx was a pied piper to nowhere IMO and in league with the oligarchs and bankers of his era
- Agathos 8y ago
  Sounds more like Luigi Zingales, who is about as far from Marx as you can get.
apineda 8y ago
Debt based capitalism. Print money and everything flips upside down.

namdnay 8y ago

Here's my opinion on what will happen on a longer time scale: Eventually the tourists will stop coming, because there are other parts of town with more atmosphere. Businesses will start moving out to other parts of town because of the cost of rent and lack of customers (due to no residents or tourists), and eventually the "city center" will defacto move. The only people who will lose out are the people who used it to park their money!

chasing 8y ago
I think this is sort of happening in NYC: The center of gravity is sort of moving to Brooklyn since it's cheaper, there's more space, it's more interesting, etc. And depending where you are, Manhattan is still very accessible. Obviously the key NYC tourist targets aren't moving, but anecdotally I am seeing an uptick of tourists in my 'hood. For what it's worth.
- Takizawa 8y ago
  Interesting that you mention the shift of the center of gravity. I would add that there are multiple competing shifts. Flushing, for example, has now become a viable, small city within New York City.
  - mtanski 8y ago
    There's tons of towns within towns in NYC. I will not name them here. Everyone please go visit Manhattan.
- swarnie_ 8y ago
  I haven't been in Brooklyn for getting on 10 years. Can you elaborate on what popular tourist friendly areas are now about? (I'm in NYC in March '19)
  - wgerard 8y ago
    Williamsburg, Dumbo, Park Slope, downtown Brooklyn, just to name a few. I'll spare Brooklyn residents the pain of ratting out their less well-known haunts.

ardit33 8y ago

I live in manhattan and I feel this story is a bit exaggerated, or at least I don't see the author's reality. (Him quoting a Real Estate firm, which is interested in activity, doesn't give credence to the data). The turnaround of restaurants and bars here is amazingly fast. When one fails, another one springs up. The same street will have very different storefronts each year. I once asked a restaurant owner, on how is this possible. He told me: Rent is expensive, and if you open a restaurant that is not doing well (attracting the clientele to afford staying afloat), is it much better to shut it down otherwise it becomes a huge money pit. What often happens is this: One person signs a long term lease for some kind of business (retail, food, whatever). The business is not doing well, he decided to shut it down and sub-lease the space. (this is easier when the market rates have risen). The second guy does give a try to his dream bar/restaurant/retail. If it doesn't work, he is forced to shut it down as well, rinse and repeat until you have a business that has the right winning formula and sticks around. This is 'creative destruction' on steroids. What I have seen in manhattan since I moved here in 2013: More hipster style coffee shops. More pizza places. Less "cheap" retail, and more luxury good stores. So, he is right, that cheap retail is generally pushed out because of the amazon effect, but in the other hand things like "thrift / second hand clothes" stores, are doing well. What is replacing those 'cheap' stores is generally things in the food business: Cupcake stores, Ice Scream Parlors, Yogurt bars, and yes nail saloons as well. But my success story (at least for my part), are coffee places. Birch Coffee, Tobby's Estate, Greggory's Coffee, etc.... all started in NYC, and they are striving and opening in countless locations.

njn 8y ago
Right, cause coffee is so hard to make yourself. I guess I'll never understand the point of hipster coffee shops. I'm all for cozy cafes, but all the hipster style coffee places, like 9th st. espresso, are the opposite of that: more catering to the trendy, minimalist, i3-gaps ikea aesthetics of the mainstream of /r/unixporn.
- sergius 8y ago
  They provide a place to sit and use free WiFi...

qubax 8y ago

It became a ghost town because of the elites and their supporters like theatlantic. Manhattan now is just a place where people from the outer boroughs, nj, connecticut, etc come to work and then go home. For a city that pretends to "never sleep", it is just a dead city at night. Queens, brooklyn, etc is more lively and other cities around the world like prague, barcelona, seoul, tokyo, osaka, etc are far more vibrant. Manhattan is just a hellhole now for the world's wealthy and annoying tourists who are too stupid to realize that sbarro's isn't real ny pizza and all the worthless trinkets they buy are trash. But at least there is a bank every other corner. The sad part is manhattan is a blueprint other cities love to copy so in 10 or 20 years, most cities around the world will be boring tourist traps like manhattan.

olivermarks 8y ago
We are seeing the same pressures and bland out in San Francisco
- qubax 8y ago
  I hear LA ( downtown ) is turning into manhattan as well. The earth is turning into a world of boring stale cookie cutter cities full of starbucks and mcdonalds.
  - djrogers 8y ago
    LA’s downtown barely existed at all 20 years ago, and now it’s bustling and vibrant.
- seppin 8y ago
  lol SF never had 1/10 the vibrancy NY had, or has.
  - olivermarks 8y ago
    True. Very different culture and not a late night city...
8y ago

ilamont 8y ago

In Boston, there was a debate recently about 50 empty ground-level retail spaces on Newbury Street, an old street in the center of town long considered a place for luxury boutiques/salons/etc. But others questioned the data: https://www.universalhub.com/2018/lot-empty-storefronts-newbury-street https://www.universalhub.com/2018/lot-empty-storefronts-newb...

achileas 8y ago
I live in that neighborhood, and as the article says it looked like it was mostly a ton of turnover. There's a lot of it on Newbury, which is a problem in its own right, and the places that remain are largely regional and national chains. The costs are also driving people to move to other neighborhood and towns, with Eastie, Somerville, and Southie growing much more than the traditionally desirable neighborhoods in Boston. Anecdotally, the company my wife works for has a presence on Newbury, they're a large national chain, and the store (a flagship) has one of the lower sales volumes in the entire region, despite being one of the most expensive rents the company holds. The problem is manifold here - rising business rents pushing businesses out, rising residential rents pushing people that aren't tourists out, and likely more that I'm less familiar with.

March_f6 8y ago

I lived in NYC from 2009 to 2017 and can affirm the author's feeling. Over the span of those years, and mostly as of late, I saw many of my favorite brick and mortars (Rare books, sporting goods shops, record stores, etc.) all be replaced by coffee shops or juice places. Granted each of the above mentioned places have challenges with their respective industry but the feeling still stands. Having been born in North Texas, I can also affirm the changing topography of America due to traditional brick and mortars being ousted. My hometown was once called the "Little Austin". It's now overrun with mini-mall strips that hold duplicates of things set up on the other side of town. (How many mattress stores and Sonics does a town of 100,000 need?) The recent bankruptcy of Sears is another example where we will likely see large buildings across the country left empty and whose re-purposing will be contingent on state/city zoning laws (Texas doesn't have any) and rent. That is, why should I pay to reuse Sears's old building when the state/city will let me build a brand new building right down the highway?

altoidaltoid 8y ago
"How many mattress stores and Sonics does a town of 100,000 need?" http://freakonomics.com/podcast/mattress-store-bubble/ http://freakonomics.com/podcast/mattress-store-bubble/
- abakker 8y ago
  https://www.wsj.com/articles/mattress-firm-files-for-chapter-11-bankruptcy-1538745006 https://www.wsj.com/articles/mattress-firm-files-for-chapter... Short answer: fewer.
AnimalMuppet 8y ago
I'm pretty sure that, just as you pay to reuse Sears' old building, you also pay to build a new one. If the Sears building is cheap enough to be worth the remodel (plus the awkwardness of using a building that isn't custom-built for what you have in mind), well, then you reuse the Sears one.
swedishfish 8y ago
Well now I'm curious. Which town in North Texas used to be called "Little Austin"? Denton??

sbussard 8y ago

Gentrification of the wealthy?

empath75 8y ago

I think it’s more of a result of absentee landlords building a real estate portfolio that they don’t really give a fuck about as building managers. They’re flipping these buildings just like houses were being flipped before the financial crisis. Having renters in there just complicates things. There’s a metro stop out here in northern Virginia that has a beautiful office building on top of it designed by a top architect and it’s _empty_. For at least a year now. And they’re building two more office buildings in the same location. They’re probably just all going to end up being managed by WeWork. The whole thing reeks of a bubble to me.

tyu1000 8y ago

I had read a bunch of these stories before going to NYC as a tourist a few weeks ago. I didn't see a single block that was full of empty storefronts and the whole city was packed and vibrant as usual. Bought some clothes at temporary popups as well.

davidf18 8y ago

I live in Manhattan and the cost of rents and housing has been increasing primarily through rent-seeking behavior which limits housing density creating an artificial scarcity in land leading to a high cost of living. Simply fixing the zoning density restrictions would reduce the rent-seeking or "market failure" and would lower the cost of living in NYC. See Harvard Economist Edward Glaeser's work for more details. Build Big, Bill http://www.nydailynews.com/opinion/build-big-bill-article-1.1913739 http://www.nydailynews.com/opinion/build-big-bill-article-1.... There is a NY State mandated minimum wage law that has been hurting many stores and has increased the cost of food in grocery stores, for instance. It was mandated to $11 / hr to $13 (today, I think) to $15. Thus, the real issue is the market failures in housing caused by politicians who limit the zoning density. The State, addressing the high cost of housing not by fixing the rent-seeking instead decided to increase minimum wage to a level that many independent establishments can no longer afford to stay in business.

samstave 8y ago

If you want to see a ghost town - Tahoe City Ca is decimated by AirBnB+Money. I grew up there, and I was there last weekend for my Dad's memorial service.... I hadnt been back to Tahoe City for some time - and man, its freaking depressingly bad. The "mall" -- the Boat Works, has basically 4 shops any longer, the retail spaces near Tahoe City Golf is boarded up and has weeds - many retail spaces are empty, the freaking BANK had to close, restaurants arent doing well according to several people I know who have worked in them for ~35 years (at SunnySide, for example).... and all my Dad's freinds/contemporaries blame SV Money + AirBnB -- in that there are no places for anyone to live. Houses arent being rented to people who would want to live there - both seasonally or long-term. All the cheaper houses were bought up over the last decades and rebuilt with $1MM++ homes in their place (This happened to one area which was the "ghetto" in the 80s when I was a kid - where all the houses were replaced with >$1MM homes and became one of the most expensive zipcodes in the country - whereas it was where all the "poor" kids lived in the 80s)

naravara 8y ago
I think a lot of economic models severely underrate the extent to which overheated real-estate markets eat economic vitality alive. It's because most of the costs they impose (initially) aren't that easy to quantify, but you're basically grinding your seed corn by making it impossible for working people to be able to afford to live and making it impossible for small businesses that aren't bars or restaurants to have a viable business model. Where's your next generation of innovation going to come from when you've done that? What happens to the community that lives in a place when the people with all the land and political power have no stake in the community itself?
dba7dba 8y ago
It's sad to see long term residents getting priced out of a community, and the city/neighborhood turning into playground/home of mostly rich. Same thing is happening near Silicon Beach in southern California, that is coastal cities near where Youtube/Google/snapchat have HQ or satellite offices. Santa Monica housing price has long ago gone Manhattan, NY like. Just use google map and realty websites, and check house price history in cities adjacent to Santa Monica. It's gone up 100% or more in last 5 years or so. It is not uncommon to see a 50+ year old house with little land get sold for nearly a million dollars, and be razed/remodeled into an easily 2 million or more house. Some retiree who sold the old small house certainly made bank. But who has 2 - 3 million dollars or the ability to take on a debt of that magnitude?

megaman8 8y ago

It's not just Amazon. The next generation is far less materialistic than generations of the past. No one can blame them for not wanting to spend 500$ on a Gucci gucci bag or 400$ on overpriced jeans, especially when they've got all that student debt. Workplace clothes are changing as well. Less people are opting for the fancy suits. Retail needs to keep up with the changes and start offering something people actually want, like: coffee bars, museums, libraries, book exchanges, 2nd hand stores, places that offer experiences (like sculpting classes, etc). Or here's a crazy idea: let's actually start using some of the 2nd floor+ space for housing/residential and maybe the place won't be such a ghost town when more people can afford to live there.

wgerard 8y ago
> The next generation is far less materialistic than generations of the past. Ehhhh, I dunno that I'd go that far. It's just different shit. I think we all know plenty of people lined up the second a new iPhone or Pixel is announced.
- naravara 8y ago
  Materialism probably isn't the word, but conspicuous consumption of consumer goods (say that 5 times fast) is definitely less of a thing among the urban set than it used to be in the 80s and 90s. I wouldn't categorize smartphones as conspicuous consumption per se, because even when blinged out in gold they still tend to be pretty understated in comparison the the dinner-plate sized Breitlings that finance bros used to wear. The culture at one point used to be REALLY insistent on showing off that you drink only the finest wines, eat the fanciest steaks, and so on. Trump is basically like, a distilled down and exaggerated throwback to this sort of tendency to buy stuff more to announce "I'M RICH BITCH!" than to actually enjoy the thing itself. Insofar as millennials are still materialistic, I'd categorize it more as conspicuous consumption of "experiences." So rather than buying fancy things to announce how rich you are, you just post instagram pics of yourself in fancy places. If not for the carbon emissions from jet fuel, it would probably be a way more environmentally friendly way of being a status-whore all things considered.

jotjotzzz 8y ago

I've lived and grew up in NYC for almost 30 years and I agree with the author. Manhattan has become an unaffordable ghost town. Walk down West Village, Union Sq, Flatiron, etc.., you see rows of closed stores that have gone vacant for a very long time now. In contrast, I was in London recently and that city was thriving compared to Manhattan, it was lively and beautiful. In addition, NYC Subway and transportation is a disgrace. It is on its way to becoming a third-world country equivalent. This was due to mismanagement and corruption. You won't notice how Manhattan has deteriorated until you leave the U.S. and visit other cities in Europe and especially Asia. Even Thailand's subway system is a hell of a lot better than the NYC subway.

lozaning 8y ago
I travel frequently through all sorts of parts of Asia for work and am always so jealous of the subways over there. I speak all of 4 words of mandarin, but have never gotten lost or had difficulty navigating. I wish I could say the same for Bart, which I'm embarrassed to admit still frequently gets the better of me.
jganetsk 8y ago
I find London to have the same problems in terms of being full of chain stores and losing the kinds of character that the author describes.
ascagnel_ 8y ago
The thing I find craziest about Union Square is the number of drugstores. Just along the south end of the square, you've got Walgreen's (a national brand) and Duane Reade (which used to be independent, but is now a local brand for Walgreen's) 600ft. or so apart from each other. How in any way is that sustainable?
- dbattaglia 8y ago
  Across the street from my apartment on 14th and 1st there is a Duane Reade and CVS literally attached to each other. It’s pretty crazy. The CVS is old and grungy, Duane Reade newer and larger (3 floors). I suspect those differences, plus possibly prople’s dependence on a certain pharmacy brand (thanks to their health insurance) is what allows them both to stay open.

pontifier 8y ago

Paying rent is for suckers.

effingwewt 8y ago
Or, you know, for people who can't afford to buy.
- pontifier 8y ago
  If you can't afford to buy, then you doubly can't afford to rent. Money spent on rent is essentially burned. Do everything you can to avoid it.
  - deleted 8y ago
    [deleted]

whack 8y ago

Let's recap the author's main points: - Retail revenues are not rising as fast as rent - Hence, shopping/merchandise stores are being replaced by bars/restaurants/coffee-shops etc Ie, businesses that sell stuff are being replaced by businesses that sell experiences. Great! Consumerism and materialism is a black hole for your soul. What I really care about are vibrant experiences. Interesting bars/restaurants where my friends and I can hang out. Great live theater where I can watch the arts. And yes, even stimulating coffee shops where I can spend the day reading and writing. Want to go shopping for goods? Go online where you can shop to your heart's content. I'm glad the city's valuable real estate is being taken over by businesses that are more focused on human interactions. For the record, I've lived in Manhattan for many years in recent times, and it has never once felt like a ghost town. I've heard many complaints about the city, but I've literally never heard anyone else complain about it feeling like a ghost town, or anything even similar. Living in suburbia though...

malvosenior 8y ago
Paying for experiences like this is still consumerism.
- whack 8y ago
  On a technical level: depends on how you're defining consumerism. See: https://www.merriam-webster.com/dictionary/consumerism https://www.merriam-webster.com/dictionary/consumerism https://www.investopedia.com/terms/c/consumer-goods.asp https://www.investopedia.com/terms/c/consumer-goods.asp At a deeper level: research has shown that spending money on experiences enriches your life far more than spending money on "things". That's what I'm referring to. https://www.bloomberg.com/news/features/2017-02-28/why-you-should-buy-experiences-not-things https://www.bloomberg.com/news/features/2017-02-28/why-you-s...
  - kbob 8y ago
    "Consume" literally means "eat". So eating out is definitely consumerism.