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Thread: How Rent Spikes Are Creating Fine Dining ‘Deserts’ In New York City

  1. #11
    Veteran Member bajisima's Avatar
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    Quote Originally Posted by Dr Sampson Simpson View Post
    Funny, just had this conversation this weekend about housing prices and how investors, many from China and Japan, are overpaying for housing as investments. This model is unsustainable. HOusing already in big cities is ridiculous. HOw the heck do these cities function? What about those making min wage or do service jobs that don't bring in a lot of money? you need those workers, but where can they live? you expect them to commute 6 hours a day to work for shit pay? It's horrendous.

    And then people wonder why everybody is so angry these days
    One of our daughters is looking for her first home and so far three times she has put a bid in and either a Russian or Chinese investor has almost doubled her offer. Its frustrating and ridiculous. Even her realtor thinks its odd that they want homes up here away from the city. One does have to wonder what they are thinking?

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    Quote Originally Posted by labrea View Post
    With the imminent closing of Republic, Union Square West—once home to pioneering restaurants such as Blue Water Grill and Union Square Cafe—is turning to a bland stretch of chain restaurants and stores. Here's why.

    By Kate Krader and James Tarmy

    July 20, 2017 8:20:49 AM PDT
    July 20, 2017 9:49:20 AM PDT

    In 1995, the restaurateur Jonathan Morr opened a 3,800-square-foot noodle shop called Republic on Union Square West in New York City, paying an annual rent of $220,000. “The rent was relatively inexpensive for what it was,” he said. “But remember, when I opened, Union Square was very different than it is today. There was very little there along with the drugs in the park. At the time we were taking a risk.”

    Twenty-two years later, Union Square has been gentrified beyond recognition. It's home to a Whole Foods supermarket and an apartment building whose penthouse sold for more than $16 million. And now Republic is on its way out. Morr said he expects to close the space by the end of 2017, three and a half years before the lease expires. “It’s just a fact of life—there’s no way that we’re staying there after the lease is up,” he said. Taking advantage of an impatient landlord, Morr plans to leave the space early and will "split the difference between what [the landlord] gets from us and what he’ll get from the next tenant, and call it a day," he said.

    Republic is joining a slow but distinct restaurant exodus from the area, following in the footsteps of Danny Meyer's Union Square Cafe, whose prohibitively high rent forced it to search for a new space in 2015. "There's no such thing as a New York restaurant that's immune to real estate," said Richard Coraine, the chief of staff for Union Square Hospitality Group. He noted that the original, 1985 rent for USQ was $4,500 a month. A roughly fivefold increase over 30 years is what prompted Meyer to move his beloved restaurant to its current home, on a corner a few blocks northeast of Union Square.

    snip

    For Morr and Republic, recent rent increases represented a tipping point, whereby he was profiting less from his business than his landlord. “When we opened Republic, we made six, seven, even eight times what the landlord made,” he said. Now that's changed dramatically. “Even if you do the math and make money a little bit, you don’t want to make less than what the landlord’s making."

    https://www.bloomberg.com/news/artic...itter-pursuits
    Why should Morr care how much his landlord is making?

    Sounds like people prefer chain food to Morr's noodles.

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    Quote Originally Posted by TNVolunteer73 View Post
    Yes you increase taxes, Renters have to increase rent.. That is what happens when you elect moonbeam as Governor. Income taxes, property taxes, business license fees increase. Hey, that is why 26,000 is a living wage in Atlanta and is 60K in LA.
    We had prop 13.

    You don't know what you're talking about.
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    Quote Originally Posted by bajisima View Post
    Well that's the goal in many places, take downtown and gentrify it. We saw it in the 80s with the yuppies. They bought up places, fixed them up and then sold or rented them for a fortune. Its great because downtown looks great and it attracts wealthy young people but it does kick out long time residents and shop owners. This is just the yuppie movement all over again. Unfortunately towns and cities encourage it because it drastically increases their tax base but it forces many to have to leave the city. Cities are just getting far too expensive all over for middle class people.
    Yep, its the free market baby!

    (except when it comes to wages at the bottom of the totem poll - then prices most not be allowed to rise)

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    Veteran Member bajisima's Avatar
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    Quote Originally Posted by labrea View Post
    Yep, its the free market baby!

    (except when it comes to wages at the bottom of the totem poll - then prices most not be allowed to rise)
    One of the concerning issues though is how many people are willing to beg for jumbo loans or put up their own homes for collateral just to join these investors. As we have seen real estate comes down far faster than it rises. It will again. Yet people are out there jumping on that bandwagon in the hopes they too can rent these homes out and make a killing. They are going to lose everything while the professional investors will just write it off.
    Thanks from Robert Urbanek

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    Quote Originally Posted by Dr Sampson Simpson View Post
    Funny, just had this conversation this weekend about housing prices and how investors, many from China and Japan, are overpaying for housing as investments. This model is unsustainable. HOusing already in big cities is ridiculous. HOw the heck do these cities function? What about those making min wage or do service jobs that don't bring in a lot of money? you need those workers, but where can they live? you expect them to commute 6 hours a day to work for shit pay? It's horrendous.

    And then people wonder why everybody is so angry these days
    In the SF bay area, we've been saying its unsustainable since the 70s.

    In fact, when my parents wanted to buy in what is now Silicon Valley in 1949, my contractor grandfather advised them to wait until inflated prices came down - never happen.

    Not only are WORKERS struggling to get by, but to add insult to injury, conservatives call them names, and claim the sweat of their brow isn't worth the pay to keep them alive and well.

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    Quote Originally Posted by Libertine View Post
    Why should Morr care how much his landlord is making?

    Sounds like people prefer chain food to Morr's noodles.
    And yet, if it were the low wage employees in his restaurant putting him in that position with demands for higher pay, you'd get it just fine. Then you'd claim their lust for undeserved higher pay was putting them out of a job.
    Last edited by labrea; 2nd August 2017 at 08:18 AM.
    Thanks from OldGaffer

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    Wrinkly Member Dangermouse's Avatar
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    I'm finding it hard to be concerned about such a first-world problem TBH. "fine dining desert" seems doubly unfortunate as phrases go, given the no-dining status of an actual desert.
    Thanks from labrea and OldGaffer

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    Quote Originally Posted by bajisima View Post
    Well that's the goal in many places, take downtown and gentrify it.
    Who exactly is "taking it" and gentrifying it?

    A lot of the cost in inner cities is demand-driven. Enough people make enough money and want to live there that they pay those prices. If people didn't have the money and/or weren't willing to pay those prices, they wouldn't find renters. Or in the case of a business, if no business can make enough money to justify operating there, they won't. Vacancies kill inflated pricing.

    The difference between an urban center and rural/suburban areas can be extreme. This is why I tend not to agree with national level economic and labor policies that are crafted from the narrow perspective of a city-dweller who constantly sees plenty of people with plenty of money and everything costs a lot. It's not that way everywhere.

    As to this topic, and the link about investors buying up real estate and renting it back out at inflated prices, there may be a need to keep on eye on that behavior and make sure monopoly pricing is not occurring. Not sure how to draw a line in that sand though.

    I hope tele-work starts diffusing this tendency to cram ourselves into dense urban centers.
    Last edited by Neomalthusian; 2nd August 2017 at 09:04 AM.

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    Quote Originally Posted by Neomalthusian View Post
    Who exactly is "taking it" and gentrifying it?

    A lot of the cost in inner cities is demand-driven. Enough people make enough money and want to live there that they pay those prices. If people didn't have the money and/or weren't willing to pay those prices, they wouldn't find renters. Or in the case of a business, if no business can make enough money to justify operating there, they won't. Vacancies kill inflated pricing.

    The difference between an urban center and rural/suburban areas can be extreme. This is why I tend not to agree with national level economic and labor policies that are crafted from the narrow perspective of a city-dweller who constantly sees plenty of people with plenty of money and everything costs a lot. It's not that way everywhere.

    As to this topic, and the link about investors buying up real estate and renting it back out at inflated prices, there may be a need to keep on eye on that behavior and make sure monopoly pricing is not occurring. Not sure how to draw a line in that sand though.

    I hope tele-work starts diffusing this tendency to cram ourselves into dense urban centers.
    The inference is that the property is being used for a more highly valued purpose. Of course, then the restaurant cannot survive. If the restaurant customers want the product/service they'd pay more to keep that use. They don't in this case.

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