From 2019 to 2021, there was a 35% increase in storefront vacancies in the neighborhood.
That's just one finding in a new report titled "Crisis and Adaptation: Storefront Trends in the East Village, 2019 – 2021."
The report, released by the Cooper Square Committee, Village Preservation and East Village Community Coalition, provides a deep dive into the neighborhood's commercial landscape that builds off of the 2019 "East Village Commercial District Needs Assessment" to give a 2021 snapshot of the EV commercial district.
The report identifies changes in the commercial district since 2019 and current challenges facing the small businesses in the neighborhood, especially in light of the COVID-19 pandemic. The report's authors say it depicts a picture of survival amidst ongoing challenges that have led to the closure of numerous local businesses.
The findings are based on an on-the-ground survey conducted in the fall of 2021 that recorded business information or vacancy status for all first and second-floor storefronts in the East Village. In addition, the report draws on merchant experiences shared through a recent survey and interviews with small business owners.
Among the findings:
- Of the vacant storefronts observed in 2021, 171 are new vacancies and 149 were also vacant in 2019.
- Medium and large landlords (6-60 buildings) own buildings with a majority of storefront spaces overall and own properties with disproportionately high rates of new vacancies, business closures since 2019, and persistent vacancies.
- From 2019-2021, 336 businesses in the East Village closed while 261 new ones opened their doors.
- Accommodation and Food Services businesses declined over twice as much as Retail Trade and all Other Categories, which remained relatively stable. Accommodation and Food Service establishments declined by 6%; Retail Trade businesses by 2%.
- 13 businesses expanded in the neighborhood, and 17 relocated to new locations within the neighborhood boundaries.
The report concludes, in part:
Set against the backdrop of the COVID-19 pandemic, the years from 2019 to 2021 saw a variety of changes to the East Village commercial district. The number of vacant storefronts in the neighborhood grew as many merchants struggled to keep their businesses afloat and some were forced to shutter their doors.While some business categories grew, others faced decline or remained stable. Growing businesses andThese changes within the commercial district reflect the many challenges that merchants face during ordinary times as well as new challenges posed by the COVID-19 pandemic.Respondents to the Merchant Survey reported that the top three challenges they face relate to their commercial rent/lease, finding skilled workers, and marketing/advertising costs. Other notable challenges that merchants face are gaining access to loans/credit/ financing and labor costs.To overcome these challenges, it is essential that merchants in the East Village continue to receive small-business support and resources in order to ensure their businesses can prosper and grow.
There's a lot to unpack in the 20-page report, which you can read here. We plan to look at some other findings in the days ahead.
Kudos to Grieve et al for providing explanations of this report.
ReplyDeleteSad. This is one of the reasons I’m moving out though. REBNY has done a wonderful job helping end store front businesses and making the city ugly. Enjoy your short term cash bump!
ReplyDelete"Other notable challenges that merchants face are gaining access to loans/credit/ financing and labor costs."
ReplyDeleteWell that's as it should be. If you have no resources and a shitty credit rating you should not be able to get easy money to open your trendy art gallery or niche vegan restaurant. That's exactly what caused the 2008 housing crisis and financial meltdown. If you're Caio Twombly and your grandfather's estate is worth $100 million than fine open your Bowery art gallery. Everybody else, work for ten years, make your bones, and save your money if you want to do your own thing.
The survey is of merchants who have businesses here now, not random people considering starting one. Click on the link to the report and you can read about the methodology.
DeleteFrom the lay perspective the situation defies logic. In any market for goods or services, prices come down to meet lowered demand. Basic. Why does it seem like so many commercial landlords are refusing to lower prices to meet lowered demand. How does that make any sense. Nobody likes selling at lowered prices. But lowered prices are still preferable to zero. Or so I thought. Guess I just don't understand NYC real estate.
ReplyDeleteOne less-than-intuitive cause for rents not falling on empty spaces is that many of these buildings are bought through large bank loans. These loans come with stipulations about how valuable (on paper) the building has to remain. Lowering rents on commercial (and residential) spaces means a demonstratable lower real estate value. This becomes a problem for the banks who bundle these large real estate loans as investment opportunities (much like during the 2008 housing crisis) who will then charge higher rates for the loans. That means that for the landlords (generally large real estate conglomerates to begin with) it becomes more expensive for them to lower the rents, and potentially ruins their initial investment goal of flipping the property for more money.
ReplyDeleteBasic economic ideas like supply-and-demand don't apply to large financialized markets like we live under. This is one of the reasons people have such a hard time adjusting their thinking to the actual circumstances we face.
"Medium and large landlords (6-60 buildings) own buildings with a majority of storefront spaces overall and own properties with disproportionately high rates of new vacancies, business closures since 2019, and persistent vacancies."
ReplyDeleteThose landlords should be subject to fines for keeping spaces vacant hoping for high rent tenants and taking the tax deductions because in the best case we get more banks and starbucks, and worst case it contributes to blight and doesn't allow small independent businesses from flourishing.
What Ian said. It's a dynamic in the market that you'd never infer from street level.
ReplyDeleteCompletely agree with Ian. is another reason that an empty storefront allows landlords to tax deduct illusionary loss of rent from their profits from apartments? They higher the assumed rent is, the more they can deduct? If that is true there could be an easy fix by not allowing those tax deductions.
ReplyDeleteThanks, Ian, for the clear explanation!
ReplyDeleteRe Geb " is another reason that an empty storefront allows landlords to tax deduct illusionary loss of rent from their profits from apartments"
ReplyDeleteThat's a myth, you can't deduct 'loss of rent' from your taxes.
The report doesn't mention ridiculously high rents and the fact that the renters pay the ridiculously high real estate taxes for the landlords. Just how many lattes do you need to sell to be able to pay rent, real estate tax, employee salary and make a living wage?
ReplyDeleteOne main cause of this is there are no parking spaces for visitors to the EV. Bike lanes, bus lanes, hotels, and....the worst offender, Outdoor Dining sheds, have removed thousands of parking spaces. Traffic is choked by these unnecessary structures. Yes, they were necessary when there were mask mandates, but now restaurants are 100% open for indoor dining. Outdoor sheds need to go. I visitors ride around endlessly for an hour or more looking for non-existant parking space we lose all around...they leave without spending money and the air pollution from idling vehicles is killing us.
ReplyDeletelol, seriously, you had to work in the parking again. End the free parking and you'll have no problem finding a spot.
ReplyDeleteIt's going to get much worse
ReplyDeleteNo one drives to the East Village to come drink, there’s plenty of transit/taxis/car services to get here. Cry more about parking.
ReplyDeleteTo all the people who hate cars & parking: WOW! My many family members who live about 2-hours away used to routinely DRIVE into Manhattan to visit me. But because of Covid, they haven't done that in a long time.
ReplyDeleteBut *now* - b/c of the free-for-all crime scene in NYC (thank you, Eric Adams, for being a world-class loser) - I've told my family not to risk driving into Manhattan, nor should they take the bus or train. Why? Because it's genuinely not safe for them to walk the streets of NYC, nor to take the subways.
BTW, a co-worker & her husband were taking a walk *on* Park Avenue near 49th Street around 8 pm last week when a deranged man walked past them, and once he was behind them, he doubled-back at a run and pushed the husband forcefully to the ground. So even Park Avenue is not safe.
I used to enjoy going for a walk in the evening after dinner, but there's no way I'd do that now unless I had a bodyguard at my side.
And the irrational hatred of cars & parking is keeping a lot of people out of this city. Some of those are my family members; now if I want to see them, *I* travel to them. That means they're NOT spending any money on theater, museums, rock concerts, baseball games or dining out in NYC, and I don't think they ever will again. Instead, I spend a lot of my discretionary income visiting them where THEY live, instead of in NYC.
So go ahead: hate on cars all you want and be sure to keep the irrational hatred flowing; it's a lose-lose position you're taking.
You sure they didn’t stop visiting on account of your maudlin self-pity and rampant anxieties?
DeleteGood piece at Bloomberg about the perception of NYC crime.
ReplyDeletePerhaps nowhere has the perception of rampant crime overpowered the reality more than in New York City, where the murder rate has certainly increased in recent years but is nowhere near where it was in the 1980s and 1990s.
Fears of violence have now surpassed Covid concerns when it comes to why workers say they won’t return to their Manhattan offices or ride on public transit in the financial capital of the world. Besides the impact on the residents of New York, there are far-reaching implications for the tourists, investors and other people who bring business and capital to the city’s economy.
Part of the outsized perception can be traced to the city’s new mayor, Eric Adams, whose focus on crime helped propel the 22-year veteran of the New York City Police Department into the job.
Once in office, he staked his administration on the idea that he’s uniquely suited to provide a quick fix to the complex problem of eradicating violence in the city. Crisscrossing the city to show up at crime scenes big and small, he became well-known for delivering sermon-like admonitions in apocalyptic terms. “We’re in a real scary place,” Adams said in a May police briefing where he likened the NYPD’s work to war deployment.
Media coverage has followed Adams’s lead. There were nearly 800 stories per month across all digital and print media about crime in New York City following Adams’s inauguration, according to an analysis of data compiled by Media Cloud. That compares to an average 132 stories per month during the eight-year tenure of the previous mayor, Bill de Blasio.
Even as shootings and homicides have decreased slightly, the perception of New York City as a dangerous place has persisted. And it’s already taken a toll on the mayor’s popularity: Only 29% of New Yorkers rated Adams favorably in June, down from two-thirds when he was elected, according to a Spectrum News NY1/Siena College poll.
The sixties and seventies illustrated what we have in store. Buildings will be abandoned; many will burn, and wealth will flee. I arrived here late 70's and settled early 80's, empty lots were plentiful looking much like London after The Blitz.
ReplyDeleteWhen outside interests control destiny, there is no mercy. As the last of small landlords sold-out, so did the community. Never trust others to see to your fate, Reagan sold greed is good, but for whom?
Ten years from now something new may immerge, hopefully imaginative and with more substantive groundedness.
It's not perception of crime driving me to fantasize nonstop about leaving New York City for good, but livability and having to fight for every scrap of what would make life actually *gasp* pleasant here. Why live in a city that feels more and more like it doesn't want actual living people to live there? Parks are either neglected and sad, or worse, totally destroyed for single-purpose resiliency projects with no end in sight and no real mitigations in the meantime for people who have to live with the increased dust and construction crap. Community gardens have to beg for tiny concessions such as access to water. Garbage pickup and sanitation services are apparently now luxuries (don't even mention composting, plus the community groups that stepped up to provide composting have now been driven out of Manhattan). Small businesses get absolutely nothing from the city, no help at all. Libraries have to fundraise constantly. Swimming pools are half staffed and run like prison camps (I once had a guard at Hamilton Fish actually *feel* my flip flops to make sure they weren't made of the forbidden leather...) Everything is a fight and when the things that made NYC at least "worth it," such as local arts organizations, music, have also been driven out as well, well, enjoy the empty shitty city you have created and all your empty shiny skyscrapers, greedy real estate interests!
ReplyDeleteThe rats are going to make short work of your car. It's a creative congestion approach. https://www.nytimes.com/2022/08/03/nyregion/new-york-rats-cars.html
ReplyDeleteA spectre is haunting good old USA. K.
ReplyDeleteM. 2022
The point made by Cooper Square about the vacant storefronts owned by NYCHA continue to perplex me. In the the 70s and 80s stores were leased to neighborhood people at below market rates. There was a tailor, a florist, a coffee shop, a stationary shop, a children's clothing shop and others that were frequented by the community. The stationary store and restaurant actually moved be because they got a better deal on the next block, a private landlord. What exactly is going on with that??
ReplyDelete@7:22AM: Well, community groups and small businesses don't have the $$$$ to "lobby" the politicians, so of course they get short shrift! This city is now built on money, greed, and more money & more greed.
ReplyDeleteHere's how a politician sees it: Community groups, which are comprised of people who give of themselves freely for the good of others: Ha, those are for suckers ... what a bunch of saps they are to NOT get PAID to do things. Get 'em out of here; we don't need them. We have plenty of lobbyists' money.