Daydream I - The SEC and bank regulators start requiring banks (& such) to disclose how badly their portfolios are impaired by $Pretend/month "rents" that nobody is paying.
Daydream II - When local zoning authorities require ground-floor retail in new developments, but the local vacancy rate for such space is over (say) 5%, then the developer receives a "lease put option" - allowing him to rent that retail space to the zoning municipality at (say) 80% of the then-current local rental rates for similar spaces. If the municipality fails to pay up, it loses its zoning authority.
> When local zoning authorities require ground-floor retail in new developments, but the local vacancy rate for such space is over (say) 5%, then the developer receives a "lease put option" - allowing him to rent that retail space to the zoning municipality at (say) 80% of the then-current local rental rates for similar spaces. If the municipality fails to pay up, it loses its zoning authority.
I see what you’re getting at but for all of americas zoning woes, I don’t think the answer is to make a patchwork of laws that say “if current zoning causes a bad outcome, cover their losses or lose your zoning authority”
Trying to understand what you are going for here. In my experience in 2 separate cities, lack of ground floor retail leads to barren neighborhoods of luxury condos that aren’t in walking distance of anything meaningful. And frequently, the ground floor retail that is put in is priced unreasonably so as to stay vacant. But you think that we should encourage everyone to overprice so as to increase the put option value? And you like the idea of vacant space?
they're building these ground floor retail everywhere here.
the only useful one is a grocer that sources labor from volunteers for discounts on food.
the rest appear empty or have bars /(also empty) or some other useless high expense niche purpose.
it's definitely a situation that zoning alone won't fix. I'm definitely in a food desert and the closest grocer is a coop that probably doesn't support low cost food options.
there's no capitalism or market based fixes here. you need to actually get your hands dirty if you want to improve quality of life
zoning and business laws prevent market based solutions, so we don't know that there aren't market fixes. The retail space prices are so absurd because there was only a limited part of the city where you can do retail. Go to 'third world countries' and there are plenty of groceries in neighborhoods as well as street vendors that are illegal in the US.
You’re right, if we have this authority we could just radically relax zoning laws in the first place. Most of the things people are using zoning for, like not living near noise or pollution are already directly regulated, and directly regulating the bad thing works better anyways.
As a landlord, I could rent to a tenant for $2k/mo with all the risks and wear/tear from that lease - or I could hijack the rent to $20k/mo, let the property sit empty for the predetermined time, and then force-feed the lease to the city.
>80% of the then-current local rental rates for similar spaces.
That is to say, you benchmark it. If someone across the street is renting their place for $1000, and the city says you cant rent yours, they would have to pay you $800 to keep it empty.
Benchmarking sounds complicated, but is extremely common. My city reassesses my property value using benchmarks every year to determine property taxes. Of course, they use totally unrealistic numbers, and I have to call them out on it, and then they back down because they are indefensible.
I think your first proposal addresses the root cause.
But the second proposal - forcing municipalities to write options with unlimited potential losses - is silly. The whole point of the zoning authority is to say "it'll be best for the neighborhood in the long run for there to be some retail shops here", and it makes sense whether you're talking about a lot or the first floor of a building. If the development isn't profitable with the ground-floor retail requirement, then just don't build it.
Some sort of option might work, but it would have to be something like: the municipality can choose to rent the space for a fixed price if it's vacant for long enough. This encourages the landlord to rent it for some higher price.
If a property is vacant for 6 or more months out of a year, the (government regulating this) can forcefully change the 'offered' terms to be as good as the best for any active lease's term item among all leases within 10 miles, and also go beyond with up to 50% discounts on any monetary restrictions imposed in those terms. This includes deposit and lease rate.
The former part is to break unusually onerous terms that might exist which I'm not aware of. The latter is the club to encourage flexibility and settling on not long term national retail clients.
> Daydream II - When local zoning authorities require ground-floor retail in new developments, but the local vacancy rate for such space is over (say) 5%, then the developer receives a "lease put option" - allowing him to rent that retail space to the zoning municipality at (say) 80% of the then-current local rental rates for similar spaces. If the municipality fails to pay up, it loses its zoning authority.
The ground-floor retail thing in residential developments seems to be a dud. There's a huge amount of such retail being built in Silicon Valley, but not much interesting moves in. I've been looking at Google Earth. Nail salons, phone stores, ice cream, and rental offices that stretch half a block to fill up the space. No place to park, and the buildings themselves won't generate enough traffic for their ground floor retail.
Even in areas with much foot traffic, such as downtown Redwood City, about a third of the retail space is vacant.
Part of the problem is that the new retail spaces are very large. They get built out to the size of a chain pharmacy or bank, because chain tenants are like the golden ticket of stability, yet very few businesses can profitably, reliably fill spaces that large.
If you look at thriving ground floor retail in traditional cities, often the storefronts are as small as 25 feet wide.
Parking availability can increase retail patronage but the parking actually has to turn over.
Free street parking that is occupied all day by the same car results in at most one net new customer, which isn’t good, and most street parking in the US is either free or priced low enough that people park too long.
These retail places have no parking at all usually. Some have parking in the garage of the building where they are located but this usually involves driving around the block, taking one specific entrance and then driving inside the garage to a designated spot following cryptic signs, it's not unheard of having to take a ticket to be validated by a shop later. These arrangements are not much better than just plain absence of parking, IMHO.
Almost as bad is street parking: even if it's turning over it does not matter since you have a very limited number of spots and no place to wait for a spot so most people will just move on if they don't find a spot (and won't go to such a place intentionally as the chance of catching a free spot is miniscule).
at least part of the idea is that the area should become dense enough that foot traffic either from the home or transit should become the lion's share. At the end of the day parking lots are worth less and generate less tax than developments.
with most of America though, it's hard work because actually getting to that level of density is chicken and egg; and then of course in California the ghost of Prop 13 rears its head and discourages residential densification in particular.
I can only talk about the observable reality, where a retail shop without parking is a very low revenue enterprise even in an expensive area. E.g. West Los Angeles has plenty of dinky shops with no customer in sight next to busiest places in the city. It's pretty hard to raise money for a business on the hope that Santa Monica will turn into Manhattan, I imagine.
Parking costs a lot of surface area. Especially parking lots.
If you just removed the parking and replaced it with nothing, that wouldn't increase patronage.
But if you used that area to increase density instead, that could increase patronage. Especially if you go dense enough for the area to become a destination in itself and to make public transport a sensible option.
But there are no parking lots to remove in these first-floor retail spaces so you cannot increase density. The outdoor shopping malls, on the other hand, with enormous parking lots and no housing nearby somehow manage to get a lot of custom. It could be that the idea that a retail without parking is set to thrive is just wrong?
Malls in the US are suffering from a retail apocalypse as well.
Really the root issue is that there is too much retail square footage in the US. Retail sq ft per person is 23 sq ft, compared to 2-5 in Europe and Japan. In that context building new retail is a fool’s errand. https://www.statista.com/statistics/1058852/retail-space-per...
Those spaces are wacky. There isn’t enough density to support wages of a person working there and not enough parking to pull in outside customers. They would make good personal studios for the locals but the landlords want too much or too onerous of a lease agreement.
Not sure about even studios - if this had been viable somebody could have made profit by taking over a commercial lease and sub-leasing the space to individuals under more suitable terms (a lot of of rental apartments seems to be ran this way already, the entity that leases them is often not the actual owner of the building).
My theory is that they build the first floor facing the street as "retail" because they don't think an apartment in such a location will be profitable (much less so a condo) as it's going to be a very hard sell for the prospective tenants/owners. It's much cheaper than residential space and if somebody leases it - you get some profit but if not, you are not losing much.
Seems like women have been indoctrinated to think that nails are important. Sorry, they are not. No man ever considers nails when regarding a woman. Only women look at nails when looking at other women.
The supposed attraction of long nails is like the pale-skinned attraction in all agricultural communities: pale skin means you are a rich lady-of-leisure, living inside the big house, not a farmer or laborer working under the sun in the fields.
This prejudice used to be true in western societies before the Industrial Revolution. But now it is reversed, with pale complexion meaning you are poor and work in a factory, but sun-tanned complexion meaning you are rich enough to holiday in Spain or Thailand to get sun in the winter, or now even get UV radiated on a sun-bed.
(As long-haul flights have come down in price, sunbeds are even cheaper, and warnings about skin cancer hit home, the inverse prejudice may be reverting back to the original pale-skin preference).
However, the farm-based prejudice is very much alive in East Asia (Japan, China, Korea, Thailand, etc.). Women from these countries carry parasols whenever there is a hint of sun, even if they have paid a lot of money to go to the sun on holiday, in say, Thailand or Bali.
[So there is the bizarre contradiction of western women paying for UV sunbeds, even as eastern women carry parasols on a hazy day.]
Nails are like that: you cannot have long nails if you are a farm worker, or craftsperson, or work in a laundry or a kitchen. Long nails mean you are lady of leisure, hence enviously regarded by other ladies.
Long decorated nails are not an indication of attractiveness to men, they are always and everywhere a signal of class, from one lady to another.
You know that nail salons ain't about making your nails longer? (At least the vast majority of what they do is not about installing nail extensions are anything like that.)
> Only women look at nails when looking at other women.
That's the same as men going to the gym and working hard on their biceps and triceps. (Many women do appreciate some muscles, but when you talk to them you will learn that the butt is the are you should focus on, if you want to maximize attraction for most of them. Leg day, every day.)
But there's nothing wrong with doing anything just for a kind of beauty that opposite gender by and large doesn't care about. As long as you care about it, that's fine.
> However, the farm-based prejudice is very much alive in East Asia (Japan, China, Korea, Thailand, etc.). Women from these countries carry parasols whenever there is a hint of sun, even if they have paid a lot of money to go to the sun on holiday, in say, Thailand or Bali.
I live in Singapore. You are right that many people here don't like to get too much sun. Me included. (But that's far from everyone here. Some people don't care too much.) I don't think there's much of an overlap between people going to sun themselves in Bali and the kind of people who carry a parasol.
Back to the nails: I just clip mine myself, and they honestly look fairly terrible. I could go for the same length but have them done nicely. Not even with decoration or nail polish, just nice and with clear lines and perhaps some polishing. (And whatever else they can do.)
If I worked in a customer-centric job, that would be absolutely vital. Or if my hands showed up on video a lot etc.
None of this has anything to do with long nails or attraction by the preferred sex.
Fun fact: the preponderance of nail salons can be credited to an American actress having her manicurist teach Vietnamese refugees how to do French manicures so that they could find gainful employment. https://www.bbc.com/news/magazine-32544343
In Seattle it’s a lot of dentist offices and new 150-seat restaurants, or at least a revolving door because no restaurant fills that size and they inevitably go under.
The solution is actually an "occupancy tax". If you aren't renting out a space within some number of months, you start owing tax on what your financial agreement says is your "rent". The longer you go unoccupied, the higher that tax should get since your unoccupied front winds up contributing to "blight".
That’s precisely what our current inflationary monetary policy does.
You can argue whether that’s good or bad but we have governmental policies that encourage productive use of assets so it’s not out of bounds to suggest other policies for land assets.
I readily admit I have no idea if this would be feasible in practice, but what's to stop landlord ABC, Inc from skirting the law by setting up shell company XYZ, LLC, and then leasing the vacant space to that company? In this scenario, XYZ would essentially just pay themselves rent causing ABC to avoid the vacancy tax.
Is that not fine? You are collecting tax on rental income so there is still a strong incentive to put someone else in there.
And, if you have a financing agreement, you will have to shuffle around (and pay tax on) the rent that you officially declare in the financing agreement. You can't just put a nominal rent on it or that violates the financing agreement.
The overall point is simply to make reducing the rent to attract a tenant more attractive than leaving the place empty for multiple years.
Then you would violate your financing agreement as the rent would be below the capitalization threshold and you would have to cough up money to the bank.
I don't think you understand the issue.
The issue here is that many of these financing agreements specify a minimum rent and if you fall below that you are in violation of the capitalization requirements and you owe the bank money. By contrast, missing rent is considered a temporary condition and can be tacked onto the back end of the financing agreement.
So, zero rent does not cause capitialization issues, but lower rent does. Thus, landlords have a perverse incentive to leave a place unrented rather than lower the rent.
An occupacy tax breaks that perverse incentive.
The goal isn't to grind up landlords. The goal is to cause rents to come down when they should. Right now, the back end financing agreements are keeping rents artificially inflated.
Hmmm... how many of these financing agreements specify a minimum rent? I've never seen this or heard of this (but this is way outside my wheelhouse, so I'm 0% confident I would've). My initial searching doesn't give me the impression it's common.
There are plenty of other reasons too, and I can’t find any evidence of minimum rents being common in financing agreements, so without that this reasoning looks really flawed.
> SEC and bank regulators start requiring banks (& such) to disclose how badly their portfolios are impaired by $Pretend/month "rents" that nobody is paying
You are looking for non-performing loan reporting. The FDIC collects these in detail to the degree that, should you want to override GAAP, you have sufficient model inputs to calculate in the aggregate.
Why not just force land lords to lease out the space at whatever the market will bear even if that amount is near zero. That way we can have local art space or makers or pottery spots or just cowork spaces? Most of those land lords are asking more than market rates hence the vacancy
Daydream II - When local zoning authorities require ground-floor retail in new developments, but the local vacancy rate for such space is over (say) 5%, then the developer receives a "lease put option" - allowing him to rent that retail space to the zoning municipality at (say) 80% of the then-current local rental rates for similar spaces. If the municipality fails to pay up, it loses its zoning authority.