I know I hit this theme a lot, but an underemphasized problem many booming cities are facing is skyrocketing business rents. If residents want affordable prices, along with more interesting options–and those interesting options often not the businesses that make money hand over fist–then business rents need to decrease. Today’s edition–bike shops (boldface mine):
Local officials and developers seek to encourage bicycle use in D.C. with new bike lanes and larger storage facilities, but many retail bike shops have been forced to shut their doors as the market becomes more challenging for independent businesses….
“It’s a very difficult and changed market for bike shops right now,” The Bike Rack owner Chuck Harney tells Bisnow. “People aren’t buying as many bikes as they used to, and if they are, they’re buying them online. The days of an urban shop with a large floor and a lot of inventory are gone. That’s done.”
Harney opened The Bike Rack’s second location at Brookland’s Monroe Street Market development in 2015. Within one year, he had already begun receiving rent abatements from the landlord because the shop was not meeting sales targets, a problem he partially attributed to underwhelming foot traffic due to the lack of an anchor grocery store at the development…
WABA Communications Director Colin Browne said he was disappointed to see the recent closings because it could make it harder for some residents to access bike shops. He thinks the issue is more attributable to retail rents in D.C. and doesn’t see an overall decrease in bike ownership.
“My sense is that the problem, at its core, is a real estate problem,” Browne said. “Bike shops are a hard small business to run, and real estate in the region is just getting more and more expensive. People like the idea of having a bike shop in the neighborhood, but the reality of how much it costs to maintain a space and a staff is a lot.”
Many businesses are being pushed to brink by rents. It’s all the more galling because, in many neighborhoods (not just lower-income ones), storefronts are left vacant because businesses don’t want to pay the rent–walk through Adams-Morgan sometime. I know of many businesses that were doing fine, but the landlord–often one not based in D.C.–got greedy, jacked up the rent, and the current tenant had no choice but to move. And then the same storefront sits empty.
If a landlord proposed a significant rent hike, causing a business to move, and the property then sits vacant for more than six months, the owner should be fined an amount equal to the proposed rent hike every month thereafter, until a tenant is found (at any rental price). We need to stop ‘land banking’ and start keeping the businesses that make cities interesting.