Earlier this summer, the New York City Council passed a package of bills designed to address widespread vacancies in the city’s retail spaces. Three of the bills will require building owners, including co-op and condo boards, to provide the Department of Finance with annual data, such as the size of their commercial space, the duration of vacancies, the annual rent charged to every commercial tenant, rent escalations, and concessions. After gathering the data, the bill’s sponsors hope to advance legislation to help owners of small businesses. One critic dubbed the data gathering “a fishing expedition.”
Now, after studying commercial corridors in 24 neighborhoods across the five boroughs, the Department of City Planning has concluded that while shuttered storefronts plague some of the city's richest and poorest areas, the phenomenon is far from a pandemic, Crain’s reports. The retail sky is not falling, after all.
"There is no single dominant trend in retail in New York City," the survey asserts. "Data did not indicate a pervasive vacancy problem across the city, but did identify a number of high-vacancy corridors."
Defining a "healthy vacancy rate" as 5 to 10 percent, the study suggests that a "rent bubble" on upscale avenues in Manhattan and gentrified Brooklyn may have led some landlords to hold space off the market to an unhealthy degree. But new construction has also brought some 40 million square feet of storefront space onto the market since 2010, which the study suggests has somewhat deflated prices.
The agency designated streets in Coney Island and Brownsville in Brooklyn, Port Richmond in Staten Island and Longwood in the Bronx as "underperforming." All these areas suffer from chronic poverty and poor transit, which likely contributes to instability for local business and the prevalence of retail cavities. The city report found that middle- and lower-middle-class areas such as Manhattan's Inwood, Queens' Astoria and Jackson Heights, Staten Island's New Dorp and the Bronx's Kingsbridge and Morris Park enjoy thriving thoroughfares, thanks to "robust and relatively stable local customer bases."
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