I didn’t realize how much I missed New York City until I started watching Louis Rossmann ride his electric bike through my old neighborhoods. Years ago, when he began looking to rent space for his computer fixing business, he got hooked on the Kafkaesque world of storefront real estate.
He loves nothing better than sidestepping human poop on the sidewalk, sticking his camera into the window of POS retail space, and say something like, “And they want $50,000 a month for this and it’s been vacant for years!”
Louis often shows up with his girlfriend, Erica. She loves him. She never states the obvious, like “Louis, the only difference between what we’re looking at, and a bathroom in a run-down bar, is the latter has a urinal on the wall.”
All that fun aside, Louis discusses other important issues beyond storefront affordability (and its cousin urban blight). His efforts in “right to repair” are one of the few political issues that gets me to the voting booth. For now, I’m going to address the issue of these empty storefronts, and their ridonculous asking rents.
Even If Stores Were Free, Few Could Make A Living
I come upon many empty stores in wealthy neighborhoods, poor ones, big cities, malls, small towns — everywhere. I used to believe, like Louis, that they were empty because of exorbitant rents.
However, if it was just a matter of the high rents, we would only see this phenomenon in the cities.
High asking rents are simply a function of location premiums — not rental income. Everywhere in NYC is premium real estate.
That Louis can’t sell unclaimed computers in his store points to a simple truth. People would rather comparison shop and buy online, or at stores where every brand is sold and there is no bait and switch. Of course, selling computers is not Rossmann’s core business, but if there was demand, it could certainly be a part of it.
Does anyone want to go back to when many NYC storefronts made a business in bait-and-switch?
For a long time, in cities with large amounts of tourism, lease costs have been based on brand visibility. Leases were part of Nike’s advertising budget. I doubt Nike ever made money selling sneakers on 5th Avenue.
Today, retail is faced with a declining population of customers. Old people stop buying things and young people don’t view shopping as something fun. They may in the future. In any case, current demographic trends have been reducing the population of shoppers. If you want to see what happens with younger demographics, watch a video of someone walking the street of Lagos, Nigeria. No empty stores there.
Rents certainly look absurdly high in the stores Louis visits. However, we need to ask if people could make a living using the space rent-free, paying only taxes and utilities?
What would they sell? The truth here is mundane. Putting lease costs aside, there just isn’t much money to be made as shopkeepers in Western countries.
Now the pandemic has posed the question: if all stores except restaurants were closed would the city fail? As far as I can see, the answer is no, and that no is getting stronger by the day.
Louis doesn’t believe that issue is closed. Neither do I nor his viewers. Urban Blight and its threat to public safety isn’t impossible.
There’s another question the empty storefronts pose which I’m surprised Louis hasn’t mentioned (or maybe I missed it). Are these empty spaces the result of not having a right-to-make? When I was young many shops carried specialized machines. For sewing, cooking, woodworking, etc., etc. Yes, those stores still exist, but more as advertising showcases.
When I was young there were whole blocks of independent businesses for photography, clothing, jewelry, plants, musical instruments, books, etc., etc.
At 60 years old I have access to incredible machines at the Cambridge Hackspace. Yet, surveying society, I don’t see a general increase in technical tinkering and skills. Maybe the same. Not more.
Many economists talk about a mature economy outsourcing manufacturing as if it’s an unavoidable development of civilization. Have we put enough tech industrialization under our belt to view that conclusively?
Have we lost only the capacity to manufacture toaster and dresses? Or have we lost something more difficult to get back, that garage tinkerer culture, which has serious consequences for national health?
Louis doesn’t push forward any definitive answer. He just asks questions. Very important questions. At first, you may think he’s all over the place, from commercial real estate to Macbook board repair. However, to his audience of 1.5 million these issues are all connected.
My Hope: Storefronts Become Public Meeting Places
Perhaps local government can create tax-breaks to convert unused stores into public meeting do-things places, like maker spaces (3d printers, laser cutters, etc), knitting clubs, photo studios, painting studio, car fixit, etc.
As a board member of the Cambridge Hackspace, I can tell you that only public funding can fill these holes large businesses create.
Right To Repair — Stop Playing Dumb Louis
Again, I am 110% for right to repair for many reasons. The primary one being it fosters creativity and gumption in young people. However, manufacturers can’t politically express another reason we accept unrepairable devices.
There’s more employment in replacing old stuff with new stuff. Apple can’t say that without getting shouted down with “BS! You just want more profits!”
All the people who work in marketing, designing and building new iPhones only get paid when you must buy a new one.
Louis needs to tackle that issue straight on or he will lose the war behind closed doors. If Apple says right to repair will cost 100,000 Americans their jobs politicians will continue to pigeonhole him as an idealistic crank.
By tackling the issue straight on I don’t mean recognizing it, I mean upping the stakes.
The real fear should be a creatively crippled nation that can’t compete with the rest of the world. Or take care of itself in a global emergency.
Apple, for example, only has devices worth locking up in the first place because it had a pool of young people who experimented with electronics in their garage. By cutting off that source of hands-on tinkerings — which fuels ambition — you end up, ironically, with the very “socialist” type country those nutjobs rail about.
The FANG companies dictating exactly who will get what and for how long. Sure, I’m all for capitalism and allowing everyone to work their agendas. But not so far that I’m okay with their locking me out of replacing a power supply using tech from the 1800s.
- 1980–2000 (~) American capitalism leads to any tech device that can be commoditized and manufactured cheaply in low cost countries is manufactured there.
- Continued innovation (2000–2015) by Western businesses means that even if overseas factories sell rebranded devices, customers will still prefer the enhanced products (commodities) ultimately assembled in the West (which usually means the addition of software)
- As innovation peters out (2015 — ), decreasing demand for their new products, tech companies look to lock commodity products to their brand through hardware brand authentication (embedded serial numbers) and other tricks . They still maintain software control forcing customers to upgrade when devices start to wear out even if the customer isn’t motivated to buy newer products based on innovative features.
- Louis Rossman and others say, “hold on…what’s the end game of all that?”