Commercial Rent, E-Commerce, Labour Costs, and Post-Pandemic Foot Traffic Changes Are All Factors; No Single Villain
Bohiney Magazine | The London Prat
NYC Small Business Closures: The Complicated Story Behind the Shuttered Storefronts
NEW YORK, NY — New York City’s commercial vacancy rate — the proportion of ground-floor commercial spaces sitting empty — has been elevated since the pandemic and has not returned to pre-pandemic levels in most commercial corridors outside of the most trafficked Manhattan shopping districts. The visible result is the shuttered storefronts that Mayor Adams made into a signature issue and that Mayor Mamdani has inherited as a signature challenge: the empty storefronts on the secondary commercial streets of Brooklyn and Queens and the Bronx that once housed restaurants, dry cleaners, nail salons, bodegas, and the specific small retail that constituted the neighbourhood’s commercial character.
The causes are multiple and interacting in ways that resist the single-villain narrative that political commentary prefers. Commercial rent: landlords on commercial streets set rents expecting the pre-pandemic foot traffic that has not fully returned and that in some corridors has not returned because the workers who generated it are now working from home two or three days per week. E-commerce: the goods that neighbourhood retail once sold are available for next-day delivery, which has reduced the foot traffic that neighbourhood retail requires to survive. Labour costs: the minimum wage increases that have been good for workers have also increased the operating costs of labour-intensive small businesses. Post-pandemic behaviour change: which restaurants and retail types the returning consumer wants has shifted from what survived 2020.
The Policy Response
The policy response — commercial rent stabilisation, small business assistance programmes, vacancy tax proposals, zoning reforms — addresses different parts of the multi-cause problem and cannot address all of them simultaneously. The market allocates commercial space to its highest-value use, which is currently often residential conversion or high-end retail that the neighbourhood’s existing consumer base cannot support; managing commercial neighbourhood character through policy requires more tools than any single administration has deployed. The storefronts are empty. The causes are multiple. The solutions are partial. The neighbourhood continues.