5 ms·

The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work. However, that

by bombcar 5mo ago

The thing I've noticed is that even dying downtowns want insane amounts of rent; I think you have to be able to buy the building to make it work. However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.

expedition32 5mo ago
For the companies that own all that real estate it's better to let them sit empty for years than lower the rent. But eventually the hammer always falls.
vasco 5mo ago
If the only way to be successful is to start by buying multiple downtown locations outright I think we know why the downtown is empty. Nobody is going to do that to open a shop. Not even the mega chains are usually buying anything.
- colechristensen 5mo ago
  The path to the return of main street is bullying your city council to attach ridiculous property tax penalties for any vacancies for whatever the central business district commercial zone is and not allow land zoned in that fashion to change. Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.
  - gizajob 5mo ago
    You’re right but it seems like the exact opposite scenario is usually in effect. Particularly in the UK, landlords seem stuck in some kind of bizarre logic of “oh, nobody can rent my building, it just has to sit here being worth nothing” and “oh, you want my worthless building, then naturally I’ll need ALL your profit and more.”
    - colechristensen 5mo ago
      There are accounting practices in place where a property value is set based on rents and that value isn't reset when a unit is vacant, but it IS reset when a new lower rent is in place through various mechanisms of valuations.
  - gosub100 5mo ago
    You don't think that corporate weasels have a way to avoid the tax? In Nevada, if you have a gaming license you must "use it or lose it", and for this reason, sometimes 24-hour "casinos" pop up in vacant buildings, just to operate the minimum number of hours to keep the license. Like one day a year. If you tried to implement a vacant property tax they would set up the most pathetic minimum-compliant "business" you could imagine. "Golfball cleaning, $3.00 per ball, open 1-4pm tues-friday".
    - colechristensen 5mo ago
      Eh, just model the law on what shopping malls have in their leases, a "Continuous Operations Clause". Put into the zoning ordinance business hours where doors have to be open, business has to be staffed and stocked. Property tax penalties apply for daily violations when you don't operate more than the minimum of, say, 250 days per year. Cities could also take inspiration from France in which zoning details and approves the EXACT kind of business, and you could have rules accordingly. LLM generated lease clause just as an example of the shape of things: >"Tenant shall continuously conduct its permitted business in the Leased Premises on all regular business days, opening for business no later than 9:00 AM and remaining open until at least 9:00 PM, or during such other hours as are customary for similar businesses in the Shopping Center. Tenant shall continuously maintain a full stock of merchandise and adequate staff to properly serve the public. Should Tenant cease operations without the Landlord's prior written consent, Landlord shall have the right to declare Tenant in default, seek injunctive relief to compel reopening, and recover damages or impose an alternative 'go-dark' rent penalty."
  - nothercastle 5mo ago
    Force taxes on average use. Force empty stores to subsidize existing ones.
ofrzeta 5mo ago
It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.
- armenarmen 5mo ago
  AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half. Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense
  - marcus_holmes 5mo ago
    We had this experience with a local town centre where the high street basically died. Retailers priced out by high rents, which was fine when the economy was good and people were spending, but as soon as it took a dip there was nowhere to go and they had to shut up shop. And this mechanism was why; almost all the real estate was owned by funds and leveraged. Property values based on a multiplier of rent. They could weather a long spell of zero rental income because that effectively cost them nothing, but if the rent went down then the value went down and they had to come up with the difference.
    - salynchnew 5mo ago
      That seems like a rather inefficient use of resources. How long will a fund typically keep that on the books before they have to offload the asset or declare bankruptcy? At a certain point, that smells like a scam with a real estate business attached to it.
      - mschuster91 5mo ago
andrepd 5mo ago
A Georgist LVT would fix that is short order. Start making owners pay compensation for keeping a valuable space empty and crumbling, and you'll see them step to it pretty quickly or sell it to someone who does.
- ghaff 5mo ago
  If it's empty and crumbling, I doubt it's all that valuable to be repurposed for housing or anything else. I did note the other day in the very small downtown of a nearby minor city that the the ancient travel agent is now a party supply store. But, really, there's not a lot in that downtown.
  - IAmBroom 5mo ago
    This is essentially saying "There's no hope; no one will ever return to downtown, no matter what!"... in a thread trying to find ways to prove that wrong.
  - ishouldstayaway 5mo ago
    The point of LVT is right there in the name: it is the land that has value. "Location, location, location" is an old cliche for a reason. If you let your property go empty and crumble, the Land Value Tax is there to provide the incentive for you to either fix up the property and actually use it, or sell it to someone who will.
    - SoftTalker 5mo ago
      What if nobody wants to buy it and you can't pay the tax?
      - datadrivenangel 5mo ago
        The state takes it, and then can either sell it off or use it. This makes it easier to do things than trying to find who owns a probably abandoned property.
QuantumNoodle 5mo ago
High commercial rent affects not only diverse businesses (good ideas that take risks) but also the quality and accessibility of goods of necessary businesses. Near me, simple mens' haircuts have soared to $35+... Except those shops that have been around for ages and own their buildings. They still charge sub $20. Another gripe is the amount of "luxury" apartments popping up. Inviting & modern interiors but all faux cheap materials. And, like, under a highway. Nothing says luxury like being surrounded by concrete and can't even go outside and walk. Commercial real estate is really out of touch :/
- SoftTalker 5mo ago
  A good haircut takes about 30 minutes. So if the barber is getting $20/cut that's $40/hr gross max assuming he's booked solid every day (most are not). From that they have to cover the rent (or property tax, insurance, and upkeep if they own the shop), utilities, scissors/clippers and other instruments, consumables, their own self-employment tax, health insurance, and retirement. That doesn't sound like it would leave much.
  - lbreakjai 5mo ago
    30 minutes? There's a ton of men with a simple hairstyle just going for a quick trim, a competent barber should be able to handle three or four of those per hour easily.
    - hdgvhicv 5mo ago
      And you need to run them back to back all day, every fay. Not just at lunch time or before after work, with no down time, no quiet days because it’s nice weather and people are out enjoying it.

by bombcar 5mo ago

expedition32 5mo ago

For the companies that own all that real estate it's better to let them sit empty for years than lower the rent. But eventually the hammer always falls.

vasco 5mo ago

If the only way to be successful is to start by buying multiple downtown locations outright I think we know why the downtown is empty. Nobody is going to do that to open a shop. Not even the mega chains are usually buying anything.

colechristensen 5mo ago
The path to the return of main street is bullying your city council to attach ridiculous property tax penalties for any vacancies for whatever the central business district commercial zone is and not allow land zoned in that fashion to change. Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.
- gizajob 5mo ago
  You’re right but it seems like the exact opposite scenario is usually in effect. Particularly in the UK, landlords seem stuck in some kind of bizarre logic of “oh, nobody can rent my building, it just has to sit here being worth nothing” and “oh, you want my worthless building, then naturally I’ll need ALL your profit and more.”
  - colechristensen 5mo ago
    There are accounting practices in place where a property value is set based on rents and that value isn't reset when a unit is vacant, but it IS reset when a new lower rent is in place through various mechanisms of valuations.
- gosub100 5mo ago
  You don't think that corporate weasels have a way to avoid the tax? In Nevada, if you have a gaming license you must "use it or lose it", and for this reason, sometimes 24-hour "casinos" pop up in vacant buildings, just to operate the minimum number of hours to keep the license. Like one day a year. If you tried to implement a vacant property tax they would set up the most pathetic minimum-compliant "business" you could imagine. "Golfball cleaning, $3.00 per ball, open 1-4pm tues-friday".
  - colechristensen 5mo ago
    Eh, just model the law on what shopping malls have in their leases, a "Continuous Operations Clause". Put into the zoning ordinance business hours where doors have to be open, business has to be staffed and stocked. Property tax penalties apply for daily violations when you don't operate more than the minimum of, say, 250 days per year. Cities could also take inspiration from France in which zoning details and approves the EXACT kind of business, and you could have rules accordingly. LLM generated lease clause just as an example of the shape of things: >"Tenant shall continuously conduct its permitted business in the Leased Premises on all regular business days, opening for business no later than 9:00 AM and remaining open until at least 9:00 PM, or during such other hours as are customary for similar businesses in the Shopping Center. Tenant shall continuously maintain a full stock of merchandise and adequate staff to properly serve the public. Should Tenant cease operations without the Landlord's prior written consent, Landlord shall have the right to declare Tenant in default, seek injunctive relief to compel reopening, and recover damages or impose an alternative 'go-dark' rent penalty."
- nothercastle 5mo ago
  Force taxes on average use. Force empty stores to subsidize existing ones.

ofrzeta 5mo ago

It's really baffling that even in the shittiest areas rents or property prices are insane. It seems the capital owners just don't care or don't lose enough money to care. They should be expropriated. Of course that won't happen.

armenarmen 5mo ago
AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half. Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense
- marcus_holmes 5mo ago
  We had this experience with a local town centre where the high street basically died. Retailers priced out by high rents, which was fine when the economy was good and people were spending, but as soon as it took a dip there was nowhere to go and they had to shut up shop. And this mechanism was why; almost all the real estate was owned by funds and leveraged. Property values based on a multiplier of rent. They could weather a long spell of zero rental income because that effectively cost them nothing, but if the rent went down then the value went down and they had to come up with the difference.
  - salynchnew 5mo ago
    That seems like a rather inefficient use of resources. How long will a fund typically keep that on the books before they have to offload the asset or declare bankruptcy? At a certain point, that smells like a scam with a real estate business attached to it.
    - mschuster91 5mo ago

andrepd 5mo ago

A Georgist LVT would fix that is short order. Start making owners pay compensation for keeping a valuable space empty and crumbling, and you'll see them step to it pretty quickly or sell it to someone who does.

ghaff 5mo ago
If it's empty and crumbling, I doubt it's all that valuable to be repurposed for housing or anything else. I did note the other day in the very small downtown of a nearby minor city that the the ancient travel agent is now a party supply store. But, really, there's not a lot in that downtown.
- IAmBroom 5mo ago
  This is essentially saying "There's no hope; no one will ever return to downtown, no matter what!"... in a thread trying to find ways to prove that wrong.
- ishouldstayaway 5mo ago
  The point of LVT is right there in the name: it is the land that has value. "Location, location, location" is an old cliche for a reason. If you let your property go empty and crumble, the Land Value Tax is there to provide the incentive for you to either fix up the property and actually use it, or sell it to someone who will.
  - SoftTalker 5mo ago
    What if nobody wants to buy it and you can't pay the tax?
    - datadrivenangel 5mo ago
      The state takes it, and then can either sell it off or use it. This makes it easier to do things than trying to find who owns a probably abandoned property.

QuantumNoodle 5mo ago

High commercial rent affects not only diverse businesses (good ideas that take risks) but also the quality and accessibility of goods of necessary businesses. Near me, simple mens' haircuts have soared to $35+... Except those shops that have been around for ages and own their buildings. They still charge sub $20. Another gripe is the amount of "luxury" apartments popping up. Inviting & modern interiors but all faux cheap materials. And, like, under a highway. Nothing says luxury like being surrounded by concrete and can't even go outside and walk. Commercial real estate is really out of touch :/

SoftTalker 5mo ago
A good haircut takes about 30 minutes. So if the barber is getting $20/cut that's $40/hr gross max assuming he's booked solid every day (most are not). From that they have to cover the rent (or property tax, insurance, and upkeep if they own the shop), utilities, scissors/clippers and other instruments, consumables, their own self-employment tax, health insurance, and retirement. That doesn't sound like it would leave much.
- lbreakjai 5mo ago
  30 minutes? There's a ton of men with a simple hairstyle just going for a quick trim, a competent barber should be able to handle three or four of those per hour easily.
  - hdgvhicv 5mo ago
    And you need to run them back to back all day, every fay. Not just at lunch time or before after work, with no down time, no quiet days because it’s nice weather and people are out enjoying it.