4 ms·

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 se

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.
    - neuromantik8086 8y ago
      I don't have a super great understanding of real estate, so my example might be over simplistic and flat-out wrong. This article has better explanations for why vacant spaces remain vacant in NYC (although it applies more to commercial than residential): https://www.brickunderground.com/rent/why-landlords-leave-apartments-empty https://www.brickunderground.com/rent/why-landlords-leave-ap... Trust me, as a resident, this phenomenon is real. There are a number of stores in my neighborhood that have been vacant for literally the entire time I've lived in the area (~ 2 years). As a general rule of thumb, renters (both commercial and residential) really don't have much leverage in NYC, except under extremely rare circumstances. It's hard to understand unless you actually live here, but the rule governing real estate elsewhere in the USA don't really apply here.
- awakeasleep 8y ago
  This idea presupposes that owners are looking to be landlords. There is so much cash floating around the high end of the economy, thanks to QE and tax dodging and everything you've heard about, that RE is purchased simply as a way to diversify holdings beyond stocks & bonds. It never has to be used.

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.
  - neuromantik8086 8y ago
    I don't have a super great understanding of real estate, so my example might be over simplistic and flat-out wrong. This article has better explanations for why vacant spaces remain vacant in NYC (although it applies more to commercial than residential): https://www.brickunderground.com/rent/why-landlords-leave-apartments-empty https://www.brickunderground.com/rent/why-landlords-leave-ap... Trust me, as a resident, this phenomenon is real. There are a number of stores in my neighborhood that have been vacant for literally the entire time I've lived in the area (~ 2 years). As a general rule of thumb, renters (both commercial and residential) really don't have much leverage in NYC, except under extremely rare circumstances. It's hard to understand unless you actually live here, but the rule governing real estate elsewhere in the USA don't really apply here.
awakeasleep 8y ago
This idea presupposes that owners are looking to be landlords. There is so much cash floating around the high end of the economy, thanks to QE and tax dodging and everything you've heard about, that RE is purchased simply as a way to diversify holdings beyond stocks & bonds. It never has to be used.