Nearly 20 years ago I proposed that the U.S. Census Bureau conduct a Census of Non-Residential Real Estate by adding a couple of questions to the economic censuses, which are taken every five years. The way it conducts a Census of Housing by adding a few questions to its Census of Population and related surveys. The proposal got as far as a test survey, but was ultimately turned down for budgetary and “respondent burden” reasons. Bothering businesses in the deregulatory era was considered a crime, and subsequent requests five and ten years later also failed. While I was spending twenty years getting paid to accomplish nothing in the public sector, meanwhile, some folks founded a business to survey commercial and apartment real estate themselves, the company where I now work, and sell the results to investors and underwriters. It can’t afford to be as comprehensive as I had proposed, and surveys landlords rather than all the tenants for “institutional grade” real estate only, which for retail means shopping centers and not storefronts owned by and leased to moms and pops.
So props (whatever that means) to Congressman Anthony Weiner for his survey of 5,991 storefronts in the outer boroughs. It is useful information, but requires a little background to be understood. According to Weiner “the recession is forcing small businesses to close shop at an alarming rate.” No doubt it has had an effect. But this being New York there has been an immediate call for all kinds of special subsidies, deals and breaks, for retail stores, retail landlords, or both. Before we start dooming our future by borrowing more money, raising taxes on the less favored, or gutting public services even sooner and more completely than is likely in any event, let’s ask why most businesses close and why stores are vacant. For example, perhaps the stores are vacant because the landlords are demanding rents that are too high.