However, that's not as unrealistic as it may seem, because the city itself often owns a decent amount of downtown, and can make a deal.
Another gripe is the amount of "luxury" apartments popping up. Inviting & modern interiors but all faux cheap materials. And, like, under a highway. Nothing says luxury like being surrounded by concrete and can't even go outside and walk. Commercial real estate is really out of touch :/
Anyway, we're an N=1 confirmation of that theory.
now, bookstores here are a whole other mess. two words, Tattered Cover. there are ample used bookstores, though, i found a copy of Alinsky’s Rules for Radicals for $6.50 on Colfax that should probably be handled with BSL-3 precaution which is as it should be
"The unifying claim is this: chains follow legibility. A city becomes legible to a site-selection algorithm when it has been organised into walkable, transit-connected high streets with predictable pedestrian volumes. That legibility is what good urbanism produces and simultaneously what makes a city capturable."
Any tips/warnings that might not be immediately obvious to a hopeful bookstore owner? Do you think there is a sweet spot in terms of square footage of retail space? Margins are low so do you supplement with sidelines/events/memberships?
One of my next steps is to join the ABA as a provisional member to get access to their new bookseller guides.
And then you have the academics. Tenured profs are relatively well paid. Adjuncts/assistants not so much, but they still like nice things.
The UK's public school towns (Marlborough, Harrow, Winchester...) often have a prosperous independent store economy on a smaller scale, for the same reasons.
Clusters work well in these towns.
If you try them elsewhere, like one of the UK's many run-down towns, they're more likely to fail because the prosperity just isn't there.
Better yet if it has attractions for both my wife and me, then we are both more likely to go.
Even better - if it has attractions open at different times of day - morning - errands like hardware shop, foods basics | afternoon - cafe, prepared food, more retail shop | evening - sit down dining, bars, checkout a book store.
It's always weird how some downtowns only cover a slice of this and as a result are dead after 6pm.. or don't come alive until 5pm.
My biggest complaint though is that the bargain bin no longer contains books they are cycling out but instead seems to be books and other items specifically meant to be sold in the bargain bin.
This was Borders and B&N, in their prime. A one stop shop. They had a childrens area with books and toys. They had a coffee bar. And of course books.
Barnes and noble is opening in my city after a decade ago books a million closed and our local indie closed during Covid.
Hotelling's Law (also known as the Principle of Minimum Differentiation or Hotelling’s Spatial Competition).
Let us know if you do it.
... yet some people still do.
Get 2-3-4 highly attractive shops that people go to (in Europe, Zara is an example) surrounded by shops that would otherwise die without the proximity/clustering.
[deleted]
The most common in the US is the strip mall. This is a largely American, soulless construct of commercial space with parking out front, typically on a major road. There are lots of reasons why this flourished in the US. It's a symptom of society being so car-dependent, which is by design. Rents here are typically lower than other options so some businesses can survive in strip malls that can't elsewhere.
The next step up (density-wise) are actual malls, or shopping centers for the non-Americans. There are different versions of this. You have the entirely indoor mall. You also have other anchor stores that pop up nearby (eg Home Depot) that are popular but can't justify the mall rent costs. Often a bunch of other businesses will sprout around these stores, which is why they're called anchor stores. Anchor stores are also things you generally need in a mall to bring in enough traffic to make the whole thing economical eg supermarkets, department stores. Malls in general have been dying in droves. Basically too many got built in the 1970s through 1990s and online shopping is killing them. There are photography and video channels dedicated to exploring dead malls.
The third rarest option is the walkable district. This is generally the downtown of cities that existed before cars. People generally love these but public transit is an issue. Americans always want to drive even when there are viable options otherwise. That means having to build parking garages and the whole thing kinda falls apart. Or at least it losses some of its charm. The hellish end of this spectrum is Houston.
Some cities have managed to rejuvenate such areas by diverting traffic and generally investing in the area. But what tends to always happen is that businesses will rejuvenate an area and then the landlords will kill it by charging exorbitant rents. I've seen 40+ year old restaurants close because of rent hikes in areas that only really existed for that restaurant.
This is part of the problem with housing being so expensive. It makes everything expensive. That local shops? Well it costs as much to build as a house and a house is easier to sell. But a cafe or a bakery or a bookstore or some other eclectic shop can survive when the rent is $20,000/year. You don't need to pay staff as much when houses cost $100k not $1M. Expensive housing just strangles everything. But when that rent goes to $200,000 over a decade well then suddenly only chain stores and big box retail can survive there so what was once a charming downtown turns into Chili's, a CVS and a Chase bank.
So this can go wrong even in dense places like NYC. There's a real issue right now with so-called "zombie leases". Basically, companies like CVS, Duane Reade and Walgreens signed high-rent long-term leases but then decided to close the store. The store remains empty because the owner has no incentive to rent it for a now-lower market rent while the billion dollar company is still on the hook for it. Enough of these and a street can look abandoned.
I really think that when cities choose to rejuvenate an area they should acquire all of it first. Eminent domain, baby.
I saw a Tiktok awhile ago where someone posited that things we once took for granted get taken away from us and sold back to us. The specific example was walkable cities. That used to be the norm. Now it's a luxury. We can't have that. If people walk everywhere and take a train or bus well then they might not buy a car. Then they'r enot buying insurance and gas and maintaining it. Unacceptable.
Society really is getting dystopian.
I think you probably mean "mall".
[dead]
[dead]
People would rather shop there than go online. Why? Because they are a part of the community.
At every farmer’s market or community event they have a booth giving out free glitter tattoos to children, and they employ several teenagers part time to wrap gifts (of course this is free too), apply tattoos, and help out in the store.
This isn’t a unique concept. Going the extra mile and doing seemingly unreasonably nice things wins you customers and loyalty.
I assumed many or most were gone because of Amazon. But after having kids and getting gifts for birthday parties, I've learned there are a lot of them and they are doing healthy business. Almost always a line on weekends.
Many or most in line take advantage of free gift wrap because they're on their way to a party.
In many ways it is more convenient than Amazon because you're going out anyway, why not get it at the last second with careful gift wrapping.
But even a recent trip to the suburbs surprised me. The Lego store in the mall had a velvet rope and long line of kids waiting to get in. I had never seen anything like this and apparently it is usually this busy.
Somehow giving $200 of Amazon credit doesn't feel the same :(
We did check it out, and he was pretty disappointed. Even though it was advertised as a STEM-oriented store, half of it was stress balls and jigsaw puzzles.
High rents for "prime" locations that, given the trend over the last 25 years, are no longer very prime, coupled with high business rates set by central government make it incredibly hard to make any money. And that's even before thinking about staff, where cover is no doubt needed at a higher concentration per square foot than warehouse based businesses.
Couple that with increases in minimum wage[0] and employer NI, and taking into account inflation and cost of living in recent years, and a lot of formerly workable retail businesses have simply been rendered non-viable.
[0] Which, by the way, I have no quarrel with.
On my first day, the very first thing I noticed was how a select few companies / online stores accounted for something like 80% of ALL the shipment that came through the facility: Clothes (with Zalando probably making up half of the shipments, just an endless stream of Zalando shipments...), make-up, and baby / kids toy stores. The last one kind of took me off guard, but then again, local toy stores have been dying for years.
Now all are gone, and I do wonder how kids of today will be able (for e.g.) to experience building a glider (balsa, cutting out with a razor, tissue covering with paste) and launching the final product into the sky. We have lost something.
BTW, if any of you or your children want to get into things aeronautical I can strongly recommend https://www.amazon.co.uk/Penguin-Book-Kites-. Some string, a little bamboo or dowel, and a binbag and you are ready to go.
https://www.playtoysandbooks.com
I live in the Andersonville neighborhood in Chicago, and it’s a small bit of joy to have a thriving boutique toy store to walk by as I go to the gym.
If you want to open a store you wait for a vacancy and apply. Citizens may vote for the applicants, the closer you live the more weight the vote has.
Count the store visitors and set some reasonable minimum. They don't have to buy anything. To much traffic would give priority for a larger building.
The first n square meters is free (smallest building). Low rent for anything above.
People want a tea room but you can't survive doing that unless you price the hot water absurdity. You can have lots of small shops selling eye candy. They don't have to sell a lot of wooden dragons, as long as it attracts visitors it's good to have.
It will be a town or city in the least boring percentage.
They are wonderful and a perfect example of a local toy store - a wide variety, personal service and free gift wrapping on all purchases (a life saver for anyone with kids and a birthday party to go to seemingly every other weekend).
A map of the network is here.
I asked her if she wanted the big or small version, she liked the small. Showing kids toys on a tablet is never going to replace the experience.
> DreamLand: another toy store chain with venerable Belgian roots owned by Colruyt group that briefly had a fancy underground store near a new parking lot not even five years ago. Of course it had to go. […] The bigger store about 30 km away from us recently also closed down. The store chain is still alive as is their webshop, but for how long… There’s still a DreamLand nearby but no longer in the centre.
DreamLand actually grew significantly in terms of physical stores due to their merger with ToyChamp, and is present in both the Netherlands and Belgium now. Of course, these huge (for European standards) stores tend to be located in malls and such; not in the historic city centres where toy stores used to be.
The local cash and carry also used to have a toy section - it was great because they had a deli where they also made coffee, a grocery section, bulk food section, and warehouse section that included toys. So we'd send the kids to the toy section, get a coffee, grocery shop. The building was a bit rundown, but that was part of the charm too. They upgraded it, it looks fancier but the toys are gone, the deli is gone, we only go for things like bulk flour now. I wonder if businesses like that have real trouble understanding loss leading sections like that.
It is too bad, they were real good and carried items that could not be found elsewhere. Now seems all stores are the same.
Edit: Looked it up, the store stopped selling toys all together last year. But they are still in business selling other items that were in a different part of the store.
Its just a matter of time before other stores follow, except for the Lego flagship stores , or the ocassional anime store in a bigger city.
Its sad.
Terra Toys is 50 years old, its space shows it. Hand-written recommendations and prices. The employees demonstrate and play with the toys, welcome you genuinely as you enter. The toys seem curated for actual fun not schtick. I went in last week and it was popping. It’s an experience.
Does Main Street need to focus on experience to survive? If so, how does it monetize experience if selling items isn’t the first focus now?
My stepfather was a salesman/distributor, selling the most diverse things (mostly electronics and mobile-related, but not only) to shops in the entire Lazio region in Italy.
95% of the shops closed, even among those that didn't he often wonders why they keep buying from him rather than on Alibaba or Amazon where he often cannot compete on price. And same for those client's customers.
It's hard to beat the convenience of online ordering for them, let alone the pricing.
But this has major implications for the local economies, especially of smaller places. As shops start to disappear so do the services or restaurants/bars connected to them.
Capitalism is brutal in its efficiency and there isn't much if anything that can be done to stop it, if people can get the same products at lower prices, they will.
[dead]
I never really liked those small shops. Open Monday-Friday from 9 to 17 so a working person cannot really buy anything there. Prices usually 20% higher than online, minimal choice. It's not like they were selling something unique, they'd sell exactly same shit you'd see online, but at higher prices. The concept of "small shop being a part of the community" is completely foreign to me because what else you'd be doing in a shop other than walk in, buy, get out.
Supermarkets on the other hand, that's a different story. I live in the Netherlands and here we have strict laws pretty much about anything, including supermarkets. The goal is to prevent megastores from coming to existence which usually suck up all economic activity from the area. I have to say that the model is relatively successful - there are lots of mid-size supermarkets, so wherever you live, you're likely close to one.
But I have to say that it's another thing I miss from Poland. I fucking LOVED megastores. I could easily spend an hour walking through the cheese aisle and looking at all the products. For some inexplicable reason, despite the existence of megastores, the chain of small convenience stores Żabka is going through a renaissance - they're almost at every corner which means that if you're walking down the street and you're suddenly thirsty you're almost for sure close to Żabka. Another reason to go there is that they often offer products unavailable elsewhere - once I found sugar-free orange-vanillia coca-cola. I knew that god smiled to me that day. Oh, and typically they're open until 23:00.
Last time we went there, owners assaulted my child and knocked it onto the floor!
Just an accounting issue for someone who owns it out right, but devastating for someone with a loan. I think this is why you’re seeing landlords offering multiple free months of rent nowadays. It allows them to adjust to actual market pricing annualized, while being able to call the “free” months an expense
And this mechanism was why; almost all the real estate was owned by funds and leveraged. Property values based on a multiplier of rent. They could weather a long spell of zero rental income because that effectively cost them nothing, but if the rent went down then the value went down and they had to come up with the difference.
and so landlords who own a whole bunch of properties would much rather a unit sit empty for a year than lower the rent to fill it, becauase it costs them basically nothing and lowering the rent on one unit might have a cascading effect that lowers the rents on all their other properties.
Consolidation, as always, is eating the society like cancer.
But eventually the hammer always falls.
If you let your property go empty and crumble, the Land Value Tax is there to provide the incentive for you to either fix up the property and actually use it, or sell it to someone who will.
The owner, the bank, and the city all wish to maintain the illusion that a $10M building from 2010 is still worth at least $10M today, even vacant. No party wishes to realize the loss in value. Occasionally, the city may try to punish vacancy with a tax, which is still about additional revenue and not about realizing diminished value.
Force the rents and property values down until a competitive market rate is arrived at naturally. Punish the greed that attempts to store or preserve value by leaving things vacant for years.
Particularly in the UK, landlords seem stuck in some kind of bizarre logic of “oh, nobody can rent my building, it just has to sit here being worth nothing” and “oh, you want my worthless building, then naturally I’ll need ALL your profit and more.”
Ideas for a local bookstore: seasonal and local items for sale, think gift giving timeframes - mothers day, fathers day, end of year holidays. Items like unique greeting cards, calendars, custom gift wrapping, having a kids section with higher margin items kids like - toys, trading cards, etc. Also you could throw some checkout friendly things like book lights, book marks, candies, etc.
If you find local craftspeople, offer some shelf/floor space for free if you can agree on a split of the margin. Hand-crafted things would pair well during holiday seasons and advertised properly might get repeat visits and word of mouth spreading.
Oh, yeah, the Toys 'R Us in the complex is long gone too.
I agree it's not exactly the random indie bookstore though as it's probably listed in every Paris guidebook.
But that was a chain, maybe other locations forced closured everywhere, and that Borders could have survived. I doubt it, however.
[dead]
"Moll": a mobster's girlfriend.
Your paragraph becomes quite amusing if one assumes you didn't make a typo.
Thanks for sharing!
Maybe the wave of AI layoffs can actually make that happen. We would need a visionary planner like maybe Christopher Alexander and then an administration to deeply care and support such a development.
I suspect if I were forced to make such a move, I'd be initially very upset, but long term, I'd probably welcome the change.
We also have the Lego store with the velvet ropes and always queued in our neighborhood mall.
Now the only observation I can say is this really only seems to work in affluent suburbs only. My neighborhood mall just so happens to be the top shopping mall in my huge city. It’s a destination for most of the suburbs and exurbs. The boutique toy story birthday present runs is usually around $50 per kid and we go to usually around 2 birthday parties a week during school year (on average). I don’t think most parents are allocating that type of budget for other people’s kids. I have 1 kid, many of my peers are doing the same for 2-3 kids and we all are varying levels of affluent by regional standards (expensive homes/cars, nannies, private schools, etc).
Target did the same and now has more Lego than TRU ever had, for example, though their prices are often over MSRP.
The key would be to market above both and aim for "different things" while making it a possible destination on its own.
That's honestly impressive, some 70 birthday parties a year, plus presumably some extra in the summer.
Oddly enough, there are practically none in summer. If you have a summer birthday you either don't have a big party or you have a half birthday or something similar where the party occurs during the school year. Too many people travel throughout the summer and kids are doing different camps and things so it would not get well attended. Our group of parents kind of have unspoken rule to not do anything that feels required when school is out. That goes for fall/summer/spring breaks and holidays too.
The logistics part probably sounds crazy but probably only ~10% of these parties are at someone's house. We've never hosted a party at our house, well when he was 1-2 for family only, but not these huge parties with so many kids, parents, siblings, etc. Most people rent out a venue. Arcades, trampoline/slide parks, skating rinks are popular with the girls, sports themed places are popular with boys, chuck-e-cheese was popular for a bit, those kinds of things. It's too much work for a 2 hour party to have that many people in your home.
Compared to when I was a kid, there's no shortage of toy stores: There's always something at the mall, Target has toys, bookstores have toys that didn't have toys when I was a kid. (My daughter asked me to take her to a bookstore in town last weekend that was about 1/3rd toystore.)
So, it's really hard to "blame" someone for a "demise" that, to me, looks like traditional retail turnover. Even if we didn't have Amazon, I'm sure older retail stores would turn over, and newer retail stores would eat them.
I’d guess one reason is that there has been no iPad/App Store/YouTube invented for dogs…
I have a gut feeling there will be negative consequences for how much time developing minds spend consuming but in the absence of clear cut evidence it seems to be the default.
I do. Shops, cafes, pubs are closing left right and centre because the median person can’t afford labour intensive unskilled jobs. The majority of the public are earning little more than minimum wage (1.6 times). 25 years ago it was 2 times.
Wages compression means shops, cafes, pubs closing, as exemplified today with Morrisons closing 100 local shops, putting people out of work, denying people easy access to local shops.
The things you said are definitely making things much worse and I suspect that even back in the day when everyone bought things from the local shop, most retailers were not making massive profits so anything cutting away at that will make it worse.
Sad really.
[deleted]
It is hard to hate the charity shop as they are Mother Theresa and Bob Geldof in retail form, feeding the starving of Africa (name me one) and bringing us one step nearer to curing cancer (as if).
But, after a while, the charity tends to perpetuate the problems that it seeks to solve. So you have what amounts to a business that has volunteers rather than paid staff (forget about minimum wage), the electricity bill is at a special rate and even the products come for free, from house clearances and people just getting rid of their 'empty gifts of capitalism' (plastic trash).
The real hustle is with rent and business rates. Rent and rates gets paid but at a fraction of the cost. If the landlord kept the place empty then he would have to foot the rates bill, but get that charity shop in and the problem goes away. The landlord can then count on the value of his property going up because they don't make land any more and all capital ends up hoisting up property values, even if the crumbling 'property' was paid for aeons ago and is best demolished.
What you have with a toy shop is specialist retail, where customers have expectations of service. The staff should know the availability of every product, stock levels and much else. It is not 'pile it high' as per the Toys R Us model.
I worked in specialist retail and for a boss that despised charity shops. We were in a back alley, with a fraction of the footfall. Anyone visiting the town would see the usual row of useless charity shops but not our shop. We had bills to pay and they didn't. It was unfair.
Nowadays the High Street doesn't just have the charity shop scams going on. There is the joy of money laundering. Imagine you have a fine cannabis operation going on and you are bringing in tens of thousands a week. What do you do with that money? How do you convert it to property?
This is where the nail bar comes in to play. Or the 'barbers'. Or the 'vape shop'. Hire your immigrant labour to sell nothing all day, and you can put through all the money you want.
Then we have the Wetherspoons pub, where they don't really make money from beer, the idea is to build a property portfolio. Another hustle.
Then there are the naive hopefuls. Personally I would love to own a little shop that sold all my favourite toys that I was denied as a kid, so that would mean train sets. Or maybe I would love to own a little cafe that sells the healthiest food in town. With some lottery winnings or an inheritance, I could dive in, hire my best friends and have the grand opening.
Narcissism would mean that all the warning signs would be ignored. Pride would mean that I would be in it until the house was mortgaged three times over, with half the suppliers demanding payment up front. Every day would be praying for rain, as in sales. I would be complaining and blaming the usual suspects such as the jungle store.
There are many, many other hustles and it sometimes helps to explore a town with someone from 'the other side of the tracks'. Poor people get preyed on in ways you would not believe.
For instance, cigarettes. If you went into one of those convenience stores and wanted a packet of cigarettes, it would cost you a vast fortune, I don't know how much, but probably around £20 nowadays, at a guess. However, for our special friends, they get the counterfeit ones at a ridiculously low price.
If you were to ask for them then the owner would tell you where to go. However, if a special friend were to introduce you to the store owner, then you would be able to buy the £3 or £5 counterfeit items too. You can even pay by card, so long as you are in the club.
A certain poverty mindset keeps people from 'my special world' going back to these convenience stores to buy food and drink items that have no nutritional value apart from calories. It is very sad but you would be amazed at how much money can be made from the seedier side of the High Street.
The problem isn't with this strange underworld, it is with the people in charge. They don't have the 'speakeasy' code words needed to appreciate how it works and they haven't tried to give specialist retail a go. They are probably at a different level of criminality, with the rentier class that are the true parasites of Western society.
I mean a Lego set is a Lego set, whether you see the pictures on the box or online.
It really is a great book if you have any interest in flying things.
Retail in the UK is very much dead, unless you need barber and vape shops.
Town centre is lots of barbers, vape shops and betting shops. Few new independent bars and restaurants seem to be breaking through thankfully.
But beware, this game is designed to suck your wallet dry! ;)
People are choosing in large numbers to buy subscription services, order food online, stay at home, and avoid socializing with other people; and the market is supplying demand. This isn't something that some external power is forcing on an unwilling populace. Indeed, if you think that people are systematically making consumer choices that are easy and convenient in the short term but bad for the fabric of society in the long term (a common-enough complaint about human society), then the "they" who wants to force people to change their habits en masse is you.
I would argue a lot of this could be changed by better zoning laws and better city planning. Big box stores should be relegated to the outskirts of city limits... let local and small businesses have downtown areas. Otherwise, everything is becoming one homogenous experience across the entire country.
You know it's bad when stores don't even "have" parking lots, but are "in" them.
Seems there's ALWAYS some from each column...
Inefficient for society? Yes. But for the capital providers aka investment (and let's be clear: retirement) funds and banks? Definitely not.
The fundamental problem at the root of all of it is how the US does pensions. In contrast to most European countries that operate in a redistribution system, aka the current workers pay the pensions of the current pensioners in exchange for "IOU tokens", the US has everyone responsible for themselves... which leads to a constant influx of cash into all kinds of asset markets, no matter the market conditions.
And that is bad, for multiple reasons.
- it ties general economic downturns to people's pensions. That in turn factually prevents politics from doing what is right (e.g. restrict climate gas emissions), because a lot of companies make a lot of money by abusing the environment and cracking down on that would lead to them losing value.
- it creates a lot of perverse incentives. When you got almost 50 trillion dollars in total retirement funds [1] with hundreds of billions of dollars in new savings each year... that money has to go somewhere where it is backed by a physical asset or a consumption in the end. A lot of that money ends up in government bonds, which "allows" the US to cut taxes for the ultra-rich without limitations and balloon the national debt without consequences because guess what, the US can "always" borrow money. It's just as bad as Japan, only less openly exposed. What does not end up in bonds ends up primarily on the real estate market, driving the nonsense we're discussing here, and what remains goes into crap like Yo [2].
- it disincentivizes the forces of the free market from holding bad actors accountable. Under "normal" conditions, the AI bubble or Tesla would simply have run out of cash years ago because no one would give them more money, but when the scam is so large it ends up in the S&P 500, cash will flow in automatically from all the dumb money that is going into ETFs and other pension investment vehicles. Once you are in, you stay in.
- To make it worse, people are increasingly going from "moderate" managed funds to the extremes: either purely tracking funds that have virtually no fees deducting profits (and, in exchange, do not exercise voting rights) or into high-yield "activist investor" funds that love to do exploitative shit like forcing companies to redistribute their liquidity reserves as dividends (robbing the company of resilience against economic downturns) or engage in LBOs, buy-and-break-apart schemes and the likes. These almost always offload the consequences of making money for investors onto society at large... like, for example, malls falling apart because anchor stores fell victim to the vultures. Toys'R'Us is one particularly nasty example.
> At a certain point, that smells like a scam with a real estate business attached to it.
The entire pension based economy in the US is the true scam - in the end, it's all IOUs just like our "pension points" in Europe. If there is no economy around due to demographic collapse or whatever, the IOUs become just as worthless.
Normally I wouldn't even care, but unfortunately, the US pension market is so large that a lot of dollars flow out elsewhere, including our healthcare system, and I'm sick and tired of American vultures buying up everything in Europe Just Because They Can.
[deleted]
[deleted]
Well, if the town is dying, the "value of that building" is effectively cut in half, or worse, anyway. Asking a lot for rent is not gonna magically make the building worth more - it will just keep it unrented.
Sorry, I can't understand why. Could you please expand a bit?
I don't get how decreasing the value of the building makes the loan more difficult to repay.
This means if I go bankrupt then the bank can sell the building and get its money back.
If the value of the building halves because the rent halved then I have a 6 million loan on a 5 million building. My LTV is 120%. The bank cannot get its money back by selling the building.
No bank is going to give me a loan on a property with an LTV of 120% so I’m stuck with my current bank. My current bank then increases my interest rate because I am now a very high risk customer who can’t leave. This is very expensive for me.
One way out of this situation is to get my LTV back to 60% which means I need to reduce the loan to 3 million by finding 3 million to pay off part of the loan.
Another way out is to sell the building for 5 million then pay the bank one million, exiting the deal with a loss of 1 million.
None of these are good for me. I’ll do anything to keep the value of the building high by charging high rents even if no one can actually pay the rents and the building sits empty.
Long term I might be able to exit by getting permission to convert it to flats.
Like, if a rent hike pushes out the tenant who has been there the longest, who has the most consistent revenue stream, in other words is the surest bet, then that, all by its lonesome, should be a pretty clear risk indicator to the bank.
Basically you have to pay a lot more if the building value goes down
[deleted]
The key is home loans for normal families can’t be called - commercial loans can.
A simpler rule that mostly covers today's problems, and adds very little overhead after the loan is signed, is often considered good enough.
[dead]
And for how much?
The system is a formalised version of "Don't tell the Tsar bad news."
Everyone has to pretend Better Days Will Come™ while the economy saws through the branch it's sitting on.
It works until suddenly it doesn't, and the banks demand a bailout.
Of course real estate is very local. There is a big difference between property in a growing city and land in a rural small town.
Which will certainly be granted and thus Better Days *WILL* Come, at least in the localized "I'm taking practically no risk" sense.
[deleted]
Can’t avoid a land value tax as the land is forfeit if the tax isn’t paid. Doesn’t matter who owns it.
In addition to what others said, in this case the land is obviously not worth very much, and thus the taxes are also minuscule.
If the land is worth less than nothing (contaminated etc) then there should have been a bond involved to ensure the clean up fee was collected.
In Nevada, if you have a gaming license you must "use it or lose it", and for this reason, sometimes 24-hour "casinos" pop up in vacant buildings, just to operate the minimum number of hours to keep the license. Like one day a year.
If you tried to implement a vacant property tax they would set up the most pathetic minimum-compliant "business" you could imagine. "Golfball cleaning, $3.00 per ball, open 1-4pm tues-friday".
Put into the zoning ordinance business hours where doors have to be open, business has to be staffed and stocked. Property tax penalties apply for daily violations when you don't operate more than the minimum of, say, 250 days per year. Cities could also take inspiration from France in which zoning details and approves the EXACT kind of business, and you could have rules accordingly.
LLM generated lease clause just as an example of the shape of things:
>"Tenant shall continuously conduct its permitted business in the Leased Premises on all regular business days, opening for business no later than 9:00 AM and remaining open until at least 9:00 PM, or during such other hours as are customary for similar businesses in the Shopping Center. Tenant shall continuously maintain a full stock of merchandise and adequate staff to properly serve the public. Should Tenant cease operations without the Landlord's prior written consent, Landlord shall have the right to declare Tenant in default, seek injunctive relief to compel reopening, and recover damages or impose an alternative 'go-dark' rent penalty."
My town was mean.
We also very clearly specify “no gifts”. We don’t have room for more stuff and they’ll get more gifts than they need from grandparents.
I’d say a majority of the parties we get invited to also are asking people to not bring gifts.
The kids just see it as a fun 2 hour playdate with lots of friends in an interesting setting with dessert. It's the same friends they see at school, sports, etc. so it's their time to have some less structured play time, which - not sure if you've heard - is in rare supply for many children these days.
When I was a kid, even at this age, I was roaming all over town on a bike with my friends, I basically had the Stranger Things childhood experience, and I feel very confident there was a lot more to fear in that timeline of childhood.
Excessive partying can foster a mindset in children that equates fun with extravagance rather than simple enjoyment.
Frequent extravagant parties can foster a mindset in children that equates fun with material possessions and lavish events, rather than personal connections and shared experiences.
There's nothing lavish about these events unless you seem to think so. A $20/day trampoline park is not lavish. A 2 hour arcade card at D&B is not lavish. I don't know what your frame of reference is but this is what we do on a normal weekend if we have no plans too, just with a smaller group and withot birthday cake to eat.
[dead]
Shareholders, who would have received the dividends from rent payments otherwise, simply go pound sand when this happens.
Even though there should be plenty of shareholders willing to accept lower asset values in exchange for continued, reduced, dividend payouts.
Market economies are clearly preferable over demand economies (like, no question about it), but Late Stage Capitalism is bad for everybody except the oligarchs.
John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.
With AI and Robotics looming over us, we would be very well served to re-examine our economic systems while we still have a chance.
Seems like one of those plans that works great right up until it doesn't.
Stonk market based pensions require that as well! Someone has to work in the future and earn dollars so that he can give me these dollars for my stonks. And that falls apart when the working population drops - either due to demographics or because the world splinters apart and the age of global trading ends. Stonks are just as much IOUs as "pension points" are.
And no, automation isn't a panacea either, because an economy not just requires workers to do work, but also people having money to buy things - that's already setting our time's economy on fire as more and more people have to expend more and more money just to make rent.
The Netherlands does not. [1] It is also considered one of the best-run pension systems in the world.
> the current workers pay the pensions of the current pensioners in exchange for "IOU tokens", the US has everyone responsible for themselves
US Social Security works in the manner you described - current workers pay for current pensioners. This doesn't work great as we already know.
Making assets instead of workers pay for pensions isn't a bad idea per se. It makes no sense to load workers down with taxes to pay for seniors. The math only works as long as the population of workers grows or if you tax workers more and more.
Workers' labor produces ever-increasing surpluses every year. Use those surpluses aka higher productivity to support seniors.
1. https://ec.europa.eu/finance/docs/policy/191216-insurers-pen...
That was when it felt like we were "Turning Japanese". It was great and scary and crazy and we wrote cyberpunk stories.
The problem is the financialization of everything, and the insistence on ensuring high rates of return above all other goals. Which is highly related to the dynamics that you mentioned here, so we're agreeing.
But other countries don't do this because the government stops them. In this country, the financial sector is more powerful and can override democracy through a couple of obvious means that we've all seen.
The result is effectively the plundering of a previously strong economy for the benefit of a couple of people.
Ask yourself why General Motors is taking the many billions of dollars in cash that they generate from their business operations and literally sending it directly to Wall Street bankers through the form of stock buybacks rather than investing in the next generation of electric cars. It's an obvious mistake, and eventually the bill will come, but maybe not in the lifetimes of the people who profit from it. Certainly not before they have a chance to buy another summer home.
China doesn't do this. They keep savings rates high and returns low, which means the money goes into building factories and infrastructure and lots of other things that ultimately make the country much, much wealthier.
Here in America, we're also sick and tired of vultures buying up everything just because they can.
The entire industrialized world has the exact same problems with commercial real estate and rents for small businesses and people.
The common denominator across continents and political systems and economic factors and social factors: all the ownership is in the hand of the olds. Whether directly or indirectly through any kind of bank-and-funds-and-government schemes that can be dreamed up.
Investment fund's commodity is value - the rest are just tools to optimize the value.
Don't forget this is typically a short term things. When the economy improves the building will be rented again. So they need the books to look good today to get through.
Commercial loans are often shorter duration and roll over and highly tied to the valuation of the property or properties, and often have clauses allowing them to call the loan if valuation dips too much (think: margin call).
In my experience in many cases this is not true. The shift toward online shopping, for instance, has meant that a lot of retail properties have no realistic chance of recovering to previous values. The accounting shenanigans described in this thread are just a way for various people to play make-believe that their properties haven't already lost value permanently.
If the lender insists the property be valued based on actual collections rather than hypothetical collections based on the rate once discounts expire or the asking rate if vacant, then they will have a loan where the borrower is underwater and that's going to end up as a loss on the bank's books.
If the borrower values it factually, they will be underwater and likely have to sell for a loss or be forclosed on.
There's also portfolio effects. If rent drops are acknowledged in one space, nearby spaces may also acknowledge lowered rents and most banks have lots of loans and many borrowers manage several buildings.
Automation is the whole reason people have money to buy things. Before we had automation everyone lived on farms and sewed their own clothes. Only noblemen could afford to pay for clothes. Your intuition is plain wrong, I'm sorry.
AI may take away purpose if it takes away literally everyone's jobs. The wealth and productivity of the economy doesn't go away. It becomes more concentrated. De-concentrating it is a political problem.
Every industrial revolution to this day produced insane amounts of job losses and suffering. In fact, that's how we got the labor rights almost a century ago. Affected workers literally got shot up over labor action.
And I'm sick and tired of that cycle always repeating and governments not giving a single shit about helping affected people and redistributing the wealth gain.
(Shrug) Things were worse before. That's the part of the argument that the Luddites and their fellow travelers simply can't hand-wave their way out of.
This implies that at every stage, the best choice for the most people was to move ahead with the revolution, instead of trying to stop it.
Hmm, putting aside others issues (e.g. stock-manipulation to make quarterly numbers) stock-buybacks might be viewed similar to repaying a loan and reclaiming the stock that was put up as collateral...
Although I suppose if the loan is zero-interest, why would one want to do that? Even if somehow all spending options are terrible today (but might improve tomorrow) one could just sit on the cash.
The decisions by major companies to prioritize stock buybacks over capital investment in the next generation of products and innovation is the absolute core of why the financialization of everything threatens to destroy us as an industrial economy and, by extension, our prosperity and way of life.
[dead]