Tuesday, September 06, 2016

High Rent Blight

Here are several articles and blog posts on high rent blight (here, here, here, and here).  High rent blight is when landlords in fancy or trendy areas increase rents to a level where many businesses can no longer afford stay in their current location.  Businesses that face large rent increases must choose to move to cheaper parts of town or close entirely.  The landlord then elects to keep a space vacant for an extended period until it can find a tenant willing to pay the rent, leading to prolonged periods of empty retail space in otherwise vibrant neighborhoods.

I have noticed this high rent blight, but did not know it was a real issue or had a name.  I wondered why there was so much vacant space in places like SoHo, La Jolla, Beverly Hills and West Los Angeles (I noticed this on S. Robertson Blvd.), and San Francisco.  Initially, I thought the vacancies were a leading indicator of an economic slowdown, but it is actually revealing the opposite.  I know there is more to high rent blight than greedy landlords or landlords playing a tax game, and one blanket term does not apply to all buildings.  But it does make walking around high rent blighted neighborhoods feel disconcerting, it is as if they are downtrodden for some unknown reason. 

Landlords should be careful.  Trends move fast and people do not linger on a half empty street, especially if an open door way becomes a permanent homeless shelter.