[URBAN NOTE] On West Village urban blight and the implications for the urbanism of Jane Jacobs

[rfmcdonald]

In The New Yorker, Tim Wu "Why Are There So Many Shuttered Storefronts in the West Village?" looks at how high rents in Manhattan's West Village neighbourhood are driving out local businesses. Even though the neighbourhood is desirable, people just can't afford to operate businesses there. What can be doen to avert this plausible market failure? Has Jane Jacobs' urbanism met its limits?

There are potentially some tax benefits for the owners of empty storefronts. But the more likely explanation is that landlords are willing to lose a tenant and leave a storefront empty as a form of speculation. They’ll trade a short-term loss for the chance eventually to land a much richer tenant, like a bank branch or national retail chain, which might pay a different magnitude of rent. If you’re a landlord, why would you keep renting to a local café or restaurant at five thousand or ten thousand dollars a month when you might get twenty thousand or even forty thousand dollars a month from Chase? In addition, if a landlord owns multiple properties, dropping the price on one may bring down the price for others. That suggests waiting for Marc Jacobs instead of renting to Jane Jacobs.

As for Jane Jacobs, she famously argued that cities were explosive drivers of economic growth, based on a theory of intra-city trade. She highlighted, among other things, the ease with which local businesses trade goods and services with each other, and eventually make the city into a net exporter of desirable goods and services. But high commercial rents can threaten that basic dynamic. If national businesses, not local ones, come to fill a neighborhood, the area may become merely an importer of goods and services supplied by CVS or Dunkin’ Donuts. Local wealth isn’t created, and the economy of the area begins to match the less-inspiring examples of suburbia. In addition, high rents, like high taxes, can damage business generally, whether local or not. Consider that even Starbucks, despite fourteen billion dollars in revenue, has begun to shutter some of its New York locations because the rent is just too high.

In the longer term, high commercial rents also damage what made neighborhoods like the West Village attractive and appealing to buyers and renters in the first place. One usually pays for distinction, and there is nothing distinct about a neighborhood where new businesses are national chains or safe, high-margin operations. The preservationist Jeremiah Moss, the author of the Vanishing New York blog, points out that Greenwich Village has been a bohemian center since the eighteen-fifties, but, since the rise in rents, it “no longer drives the culture,” and instead is becoming what James Howard Kunstler termed “a geography of nowhere.” It is possible that entire classes of stores may disappear from some neighborhoods, like mid-range restaurants, antique stores, curiosity shops, bookstores, and anything too experimental. Brooklyn has emerged as a cultural center in the past two decades in part because it has lower rents and thus more interesting businesses. But, as Brooklyn’s property values rise, it might expect some of the same problems that parts of Manhattan have.

If high-rent blight hurts New York’s municipal economy, what, if anything, might be done? Because the problem is tied almost inextricably to the value of New York real estate generally, there are no simple fixes. The #SaveNYC movement and the Small Business Congress NYC advocate the regulation of lease renewal. They support a bill written by the small-business advocate Steve Null that tries to limit rent spikes by making commercial-lease-renewal disputes subject to mandatory mediation and arbitration, like some baseball salaries. Gale Brewer, the Manhattan borough president, supports a different regulation of lease renewals, coupled with zoning rules, that encourages landlords to quit waiting for the jackpot and to start renting. Some, like Moss, want to fine landlords who leave storefronts abandoned, in the hope that they’ll then rent to smaller, quirkier companies instead of Chipotle. There may also be other original solutions to the specific problem of high-rent blight, such as, perhaps, finding ways to let pop-up stores use abandoned spaces on a seasonal basis.