> And how do you get lower business rents? There's a thing called supply-and-demand that might be helpful here.
It's part of it for sure, but there are lots of commercial vacancies that sit empty for years because landlords often keep storefronts vacant on purpose. It's a confluence of reasons and it depends on the locale -- sometimes there's a tax break if it's vacant, sometimes there's a tax increase if rent hits a certain threshold and the landlord wants even more to make up for the new tax, sometimes the mortgage is guaranteed by the rent price in some way and lowering the rent would cause the holder to pay back the difference immediately, etc.
There are tons of empty storefronts in NYC at the moment, for example, so more supply isn't really the issue here, often it's a web of really bad policy.
And I'm sure this is the place where people start saying Land Value Tax.
Yeah, that all sounds like really horrible policy. Landowners in in-demand locations should be taxed heavily if the land isn't being used productively. They sure as hell shouldn't get a tax break for having a vacant lot or storefront.
Building cheaper commercial real estate will help with that issue, too, as it will cause the CRE landlord holdouts to realize the downward price pressure will only continue.
It's part of it for sure, but there are lots of commercial vacancies that sit empty for years because landlords often keep storefronts vacant on purpose. It's a confluence of reasons and it depends on the locale -- sometimes there's a tax break if it's vacant, sometimes there's a tax increase if rent hits a certain threshold and the landlord wants even more to make up for the new tax, sometimes the mortgage is guaranteed by the rent price in some way and lowering the rent would cause the holder to pay back the difference immediately, etc.
There are tons of empty storefronts in NYC at the moment, for example, so more supply isn't really the issue here, often it's a web of really bad policy.
And I'm sure this is the place where people start saying Land Value Tax.