Thursday, January 15, 2009

Recessive economy, high unemployment, falling housing market: What year is this...?

I'm currently reading a rather academic book titled "From Urban Village to East Village: The Battle for New York's Lower East Side." It was first published in 1994. The chief author is Janet L. Abu-Lughod, at the time of the book's release a professor of sociology at the Graduate Faculty of the New School for Social Research.

Her section on the the beginning of 1992 is particularly interesting...perhaps you can draw a few parallels to another time in the city. Like now...

The economy of the city also appeared to be going to seed. Recently released data on jobs and unemployment revealed that in 1991 the city had lost jobs at an even faster rate than in the 1975 recession. And these were jobs not only in manufacturing, which had long been deserting Manhattan, but in the services as well. Service job losses, while they began at the high end of the scale when the stock market first tumbled in 1987, were now being translated, through a multiplier effect, into losses within demand sectors that "yuppies" had formerly supported.

Vacancy rates in hotels were rising. It was easier to get a cab, even in bad weather. Reservations were no longer needed at many good restaurants and tickets to concerts and the theater were once again more available. Employees of commercial firms, both high on the ladder and now, in back offices as well, were being let go, and in the interests of reducing municipal and state costs -- and New York City and the State struggled with mounting budget defecits -- the number of public employees was also being reduced. The 1991 Christmas buying season was one of the most disappointing on record.

The bottom was also falling out of the housing market. Real estate agents, never ones to suggest at any time that housing might be a poor investment, were estimating that sale prices on luxury flats in the city had dropped a fourth to a fifth from their peak values in the late 1980s and that there were "real bargains" to be had in rental units, co-ops and condominia. But sellers, even those offering "bargains," reported months without a single buyer nibble. Advertisements in the Sunday real estate section of The New York Times for auctioned residential and commercial units expanded from half a page to several pages, and the lower auction prices established a ceiling beyond which other prospective buyers refused to bid.

The commercial firms in Lower Manhattan, whose job holders were the "white-collar workers" that a walk-to-work gentrifying zone of the East Village was intended to attract, were especially hard hit. Vacancy rates in privately owned buildings soared from under 3 percent in 1981 to over 20 percent in 1991.

In the East Village, although properties were too downscale to warrant private auctions and many residents were already so marginal to the economy that its collapse left them relatively unaffected, the wind was definitely out of the gentrifiers' sails.

The book includes the map of the East Village's included in a section that discusses 1987. (Click to enlarge.)


Anonymous said...

That "new type of low-income housing" from 4th to 6th along Avenue C sure didn't turn out well. It also goes all the way down sixth, on the south side of the street.

Horribly designed. A waste of space. (Not saying the people are a waste of space; I'm saying the buildings could have been designed to incorporate more people, and give them more a sense of community by having STREET-LEVEL retail along C.) Instead, those entire blocks along C are dead.

Also: Odd to see my neighborhood dubbed the "area of devastation."

I've done lots of building searches to see which buildings were abandoned, and to try to trace the history of buildings on my block (7th between C and D). Apparently, my building was never abandoned, but the one next door was.

Sure wish I had a Google Street Map for the year, say, 1986.

DJ Xerox said...

Is real estate in the East Village and NYC really falling? You would think with all the trust fund babies loosing their 30k a year media jobs, Wall Streeters loosing their overpaid gigs and the strengthening of the dollar to lock out the Eurotrash that something would become affordable, but I just see landlords and real estate agents pushing the threshold higher and higher.
The Kims and Two Boots empires collapsings (well, the cool part of those empires) and all the other bits of comfort that keep closing and I'm wondering where this all goes. I'm not a there goes the neighborhood kind of person, but I'm flumoxed by how many Dunkin Donuts and Yogurt shops can open up, while the unique joints shut down.
And I'm still seeing lots of vacant storefronts, especially on 14th Street and down Broadway. I think the city could do something constuctive by having a vacancy tax on storefronts to force them to lower rents if they can't get their insane idea of rent. Every empty storefront means at least a handful of jobs that don't exist.

Anonymous said...

Suburban hopping malls fine stores that close during the established "mall hours." The city of New York could fine stores that remain closed for more than 90 days (enough time for renovations). This would be a useful source of revenue, but it would do nothing to stop stores with deeper pockets from moving in. neighborhoods change. Furthermore, many cool stores are run by individuals whose business acumen leaves much to be desired.

Now, if you could hire recently laid off MBAs to run cool stores, then you just might have a solution. Of course, it is these individuals everyone loves to hate.

Pity the poor MBA. Every where we go gentrification follows. Everyone hates us. We just want to work, eat good food, grab a drink or seven, and live our lives. Yes, we may support upscale shops and restaurants, but do not blame us for chain stores (McDonalds, Dunkin Donuts,...). We never shop at them.

Anonymous said...

I hope you're being sarcastic, MBAer.