In recent years there has been a dramatic increase in the number of vacant stores along the prime shopping strips in Manhattan. This has been do to a decline in rent rates, which have led many building owners to wait for the market to turn back up instead off slashing down their prices. Now areas like Soho And the Upper West Side have deserted store fronts where there were always high-end shops.
Last week, while speaking on WNYC with Brian Lehrer, Mayor Bill de Blasio said that he would like something done about all the vacancies by either the city or the state.
The mayor said, “I am very interested in fighting for a vacancy fee or a vacancy tax that would penalize landlords who leave their storefronts vacant for long periods of time in neighborhoods because they are looking for some top-dollar rent but they blight neighborhoods by doing it. That is something we could get done through Albany.”
According to a report by the City Council released at the end of 2017, between 2012 and 2017 the vacancy rates in Manhattan hade doubled from 2.1 percent to 4.2 percent.
The report concluded, “Many landlords prefer to wait for area rents to increase before committing their real estate to long-term leases with relatively fixed terms. If these landlords have deep pockets and large property portfolios, it may make more financial sense to claim a tax loss on vacant property than to rent at a non-optimal value.”
The Real Deal reports, “The newly elected speaker of the city council, Corey Johnson, has previously supported commercial rent control measures that could effectively bring many rents in the city and, for landlords, eliminate the option of waiting on a market rebound before leasing again. In October, The Real Deal reported that retail sat vacant in nearly $1 billion worth of newly-bought Soho real estate.”
By Charles Bernstein