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Vacant storefront problem may not be a citywide issue: study

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A new city study explored vacancy rates in 24 neighborhoods

Three empty storefronts on a street in Chelsea, Manhattan.
A string of vacant storefronts in Chelsea, Manhattan.
Richard Levine/Getty Images

It’s undeniable that vacant storefronts have transformed New York City’s streetscape.

Stroll down some of the city’s most popular retail corridors and the staggering emptiness can’t be ignored: on a stretch of Madison Avenue and Herald Square-West 34th Street, respectively, around 30 percent of all shops are available for rent, according to a recent report by Cushman & Wakefield. And in gentrifying neighborhoods, mom-and-pop shops say they have struggled with soaring rents and keeping pace with e-commerce giants.

The perceived commercial crisis has unusually unfolded amid a boom of development and as the city teems with tourism. But just how pervasive is the problem? A new study by the city’s Department of City Planning (DCP) says it may not be as bad as you think.

DCP staff analyzed 10,000 storefronts spanning 24 study areas across the five boroughs using data from Live XYZ, a technology company that has mapped every ground floor use in New York City. That data was then cross-referenced with field visits and interviews.

City staffers looked at trends from late 2017 through fall 2018, and while the study identified neighborhoods challenged by high vacancy rates, it was not a universal phenomena, the study asserts. “No single dominant trend” was flagged as the cause for corridors grappling with high vacancy rates—a “healthy” vacancy rate is defined as 5-10 percent—instead the study points to a mix of shifting consumer habits, rising property taxes and rents, and zoning challenges as the culprit.

A map of New York City with numbered circles highlighting the neighborhoods studied by the city.
A map of the neighborhoods targeted by the DCP study.
Department of City Planning

In Manhattan and gentrifying Brooklyn, a “rent bubble” may have led some landlords to keep space off the market while seeking higher rents. But a boom of new construction has brought some 40 million square feet of storefront space to the market since 2010, suggesting that bubble may have burst as prices deflate.

Areas in the Bronx and central Brooklyn suffered for entirely different reasons: longterm disinvestment where “storefronts may be difficult to tenant due to poor conditions or negative perceptions of the neighborhood.” A lack of anchor tenants made it harder to attract spending in these sections of the city, including on Perkin Avenue in Brownsville and along Westchester Avenue and Southern Boulevard in Longwood.

But there are bright spots. Middle- and lower-middle-class neighborhoods such as Manhattan’s Inwood, Queens’ Astoria and Jackson Heights, Staten Island’s New Dorp, and the Bronx’s Kingsbridge and Morris Park boast bustling thoroughfares because of “robust and relatively stable local customer bases,” the city found.

Across the board, the average vacancy rate rose from 7.6 to 9 percent between 2008 and 2018. (Yet over that same period, vacancy rates actually declined in Astoria, New Dorp, and Hamilton Heights.) The only corridors where vacancies rose by more than 3 percent during that time was the Upper West Side inside of the Enhanced Commercial District—a special district mapped in 2012 that places limitations on street frontages of ground-floor commercial uses—and the Upper East Side, with respective increases of 3.6 and 4.3 percent.

Canal Street suffered the biggest hit with a whopping 25.9 percent vacancy rate—which the city blames on a cluster of vacancies on Lispenard Street—while Jackson Heights was the most prosperous among the study areas with only a 5.1 percent vacancy rate along Roosevelt Avenue, 37th Avenue, and Junction Boulevard.

As more New Yorkers purchase clothes, books, furniture, and other dry goods online, city storefronts have countervailed this trend with a swell of eateries and service providers, such as salons, dry cleaners, or banks.

All told, the study points to “no clear geographic pattern for vacancy rates” and “many factors” that influence the rise and fall of vacancies. To truly under the problems that plague specific neighborhoods, more data is needed, the study stresses.

A new bill passed by the City Council in July aims to do just that with a database that will track retail vacancies. Under the law, landlords are required to register their vacant storefronts with the city and provide a laundry list of information that will better help the de Blasio administration and lawmakers understand the challenges of the retails sector.