The Business Rent Is Too Damn High

Returning to what is an irregular series, we note that in Chelsea, NYC, the business rents are too damn high (boldface mine):

Here we can see how an ideology of convenience is reshaping the economy. Ordering things like tape or bolts online is rarely cheaper or faster than popping down to the local hardware store — not to mention the wasteful packaging — but many of us do it anyhow. Clicking on a product from the comfort of your couch seems more convenient — and that impression of ease can have more influence on our behavior than better service, quicker acquisition and lower prices.

Even more damaging than the competition from Amazon, according to Mr. Feygin, was a huge rent increase. He says he faced a near-doubling of rent, from about $6,000 to $10,800 per month, for his 600 square feet. Property taxes, which are tied to property values, also rose sharply. It was too much.

Competition from Amazon and a rent increase might seem like distinct phenomena, but they are two sides of the same coin. Both reflect the transformative consolidation and centralization of the American economy since the 1990s, which have made the economy less open to individual entrepreneurship. Amazon represents the increasing monopolization of retail; the high rents are a symptom of the enormous concentration of wealth in a handful of coastal cities like New York, San Francisco and Washington.

Both phenomena contribute to the same regrettable outcome: In today’s economy, returns on investment have shifted away from the individuals like Mr. Feygin who take personal risks. Instead, wealth is being routed to large middlemen, national monopolies, property owners and shareholders.

So Chelsea Convenience is scheduled to shut down on Nov. 30, not because of a recession or poor business decisions, but because of what amounts to a fundamental change in American capitalism.

Feygin’s costs would increase over $57,000 annually. That moves you from an upper-middle or middle class income to…well, not that. Not only do we have urban housing crises (note the plural), but we also have a small business crisis–the businesses that make neighborhoods liveable simply can’t survive without significant help. What’s worse is that business tenants often are forced out and then the property sits vacant. If nothing else, cities should, if a tenant is forced out without due cause, require that the landlord find a new tenant within six months, or else the landlord is required to pay a fine equal to the previous rent every month.

We need to help these small businesses.

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1 Response to The Business Rent Is Too Damn High

  1. If only there was a party that claimed it was dedicated to helping small business job-creators in our country…

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