An article in ‘The Atlantic’ written by Derek Thompson highlights how a highly developed and extremely popular city such as Manhattan is becoming into a ghost town that only residents and the remaining workforce can see.
Manhattan is the most popular and most urban city in the United States, and is the capital of business, commerce, and culture. But in reality many stores are facing tough competition, most putting up for-lease signs and popular shopping spots such as Bleecker Street in the West Village and Fifth Avenue in the East 40s—are filled with vacant storefronts. The author compares their state to the Yogi Berra joke: Nobody shops there anymore—it’s too desirable.
The reason Manhattan’s current state is being talked about is deep rooted and possibly a sign that the rest of United States might suffer a similar crisis. Combining the data assimilated by Douglas Elliman and Morgan Stanley determined that at least 20 percent of Manhattan’s street retail is vacant or about to become vacant. More than 10,000 retail workers have lost their jobs during a period of strong and steady economic growth, the Great Depression reported far less loss of jobs.
The author identified three reasons for this situation, firstly and most simple reason being rent. The rent is too high and places like West Village and Times Square have experienced commercial rent soaring by 89 percent between 2010 to 2014, according to CBRE Group, a large real-estate and investment firm.
Some of the city’s richest zip codes have become victims of their own affluence and commercial rents have ascended to an altitude where small businesses cannot breathe.
The second reason being the rise of online shopping. While traditional retailers and popular brands have extended to make digital spaces to sell their products online, their retail stores are experiencing less footfall, hence many retail chains such as Walmart, Best Buy and Sears are closing their stores and have reported major losses for the past three years. In contrast online retailers such as Amazon, eBay and Alibaba are selling with high profit margins as they spend minimum amount on renting a warehouse, maintain low cost of operation and can spend on advertising rather than paying for maintaining a storefront, its all about the little brown box not the big brown bag. Online shopping has digitized a particular kind of business—mostly durable, nonperishable, and trade-able goods—that one used to seek out in department stores or similar establishments. Their disappearance has opened up huge swaths of real estate.
Many people have also shifted out of the city to live amidst cleaner, greener and less noisy spaces. The city might skyline with the tallest skyscrapers but its endearing sounds of honking cars and hollering investment bankers has driven residents to live in spaces that offer wide array of activities, diversity in living spaces, and waltz into quirky bars, new eateries and the curious antique shops. To get a view means spending awful lot of money and in a city that never sleeps, many residents work too late and don’t see the point in spilling their money to own a bedroom in the heart of the city.
The author E. B. White called New York an assembly of “tiny neighborhood units.” The author also states that in “2018 landlord waiting game is denuding New York of its particularity and turning the city into a high-density simulacrum of the American suburb. The West Village landlords hoping to lease their spaces to national chains are turning one of America’s most famous neighborhoods into a labyrinthine strip mall. Their strategy bodes the disappearance of those quirky restaurants, curious antique shops, and any coffee shops that aren’t publicly traded on the NYSE.”
In Jane Jacobs’s famous vision of New York, the city was known to nurse new firms and ideas and its strange culture was blessed and adorned by the rest of the world. Today’s New York is the opposite: Landlords are so desperate that they are finding every chance they get to satiate in what’s left and are struggling by bringing in national chains to pay exorbitant leases, rather than find new innovative stores – they are leasing into those who can pay for a long term lease than those who are new, upcoming but can only afford to start off on short term leases.
The desperate situation where tenants are moving out hasn’t led property owners to lower the rent and make way for new generation of unique shops. In this vision, today’s vacancies are a necessary torment, the grassland fire whose ashes will nourish new native species and bring forth a better ecosystem.
“America has only three cities,” Tennessee Williams purportedly said. “New York, San Francisco, and New Orleans. Everywhere else is Cleveland.” That may have been true once.
He concludes by stating the New York needs to evolve better, because the pace and the direction with which “New York’s is evolving the future of cities is an experiment in mass commodification—the Clevelandification of urban America, where the city becomes the very uniform species that Williams abhorred. Paying seven figures to buy a place in Manhattan or San Francisco might have always been dubious. But what’s the point of paying New York prices to live in a neighborhood that’s just biding its time to become “everywhere else”? “