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Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

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Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#51

Post by gkoberger »

01100011 wrote: post #46

Subsidizing the restaurants without getting anything in return seems like a misallocation of capital. Allowing 'creative destruction' on a massive scale is harmful to social stability and frankly just cruel. People didn't plan for it, because it is implied in our various social contracts that they don't need to(and that may be wrong, but this is not the time to fix that). We should consider subsidizing the restaurant…

You can't end with "this isn't the time for ideology" after three paragraphs of YOUR ideology.

For some restaurants, takeout is easy and they can make it work! For others, it really really isn't. What about bars, where most money is made on alcohol?

You got it backward. These restaurants all presumably paid taxes and employed people, some for literally a century. Why do you expect them right now, when they're suffering the most, to "give something back" if they don't want to die?

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#52

Post by runawaybottle »

denkmoon wrote: post #12
t-writescode wrote: post #4

Earlier quoted context omitted.

Those landlords also need bailing out. They need to pay their loans, as well.

Do I get a bailout for my losses on the share market? What if I had bought shares on margin? Why does one class of investor get a bailout but not others? (Why bailout any investor? Risk is part of investment.)

The moral hazard argument does not work in this case for a variety of reasons.

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#53

Post by viraptor »

Does anyone know what happens in practice with places where restaurants run in a space where the landlord defaulted?

If the place is repossessed, I expect a bank which takes over the space would have more gain from literally anyone paying anything for the place until it's sold. On the other hand, I'm not sure the partial rent would be relevant at all to the bank which likely has no issues with sitting on an empty property. What's likely to happen in practice?

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#54

Post by twblalock »

petre wrote: post #40
twblalock wrote: post #13

Earlier quoted context omitted.

> If the landlords didn't want to deal with loans then they should have paid cash for the properties. If the tenants didn't want to pay rent, they should not have signed leases. Why is it that tenants can get a break on their obligations but landlords can't? Why are tenants more deserving of help? Most landlords are not rich. They are providing a service to their tenants, who cannot afford to purchase buildings and w…

> A renter signs a contract promising to pay rent. They should use the force majeure clause to terminate their contracts and the landlords could sue if they don't like that. A pandemic is not unlike a flood or earthquake. This is exactly why such a clause exists in contracts. My boss negotiates a lower rent during a crisis. It’s fair enough. Would the landlord prefer a smaller amount to none at all?

> They should use the force majeure clause to terminate their contracts and the landlords could sue if they don't like that. A pandemic is not unlike a flood or earthquake. This is exactly why such a clause exists in contracts.

If they terminate their contracts they need to move out. That's not what is happening here. Tenants are trying to stop paying, but also stay in the property for free, indefinitely.

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#55

Post by runawaybottle »

ars wrote: post #22
t-writescode wrote: post #8

Earlier quoted context omitted.

Let's walk this forward some. Restaurants provide jobs, probably 20ish jobs per restaurant. If every restaurant closed down, that's something like 12 million unemployed people who can no longer find employment at those restaurants. Some of those employees might even make enough money to pay taxes and not get their tax money back. What do you think the solution is, rather than just slamming someone's theory on what to…

Yah, those numbers just cover rent. If you want to cover payroll as well those numbers are going to skyrocket. If you think that's a good use of money, well, make your argument. But please include a cost while doing that. You can't just say "bail them out" and not say how much that will cost. Maybe it's affordable, maybe it's not - but be upfront with your numbers.

It’s doable the same way VC funding for startups is doable. Post vaccine, we expect this industry to thrive again. Bail out the immediate financial commitments, and provide interest free federal loans that don’t have to be repaid for up to three years (similar to student loans). Hell, similar to the loans we gave too big to fail banks once upon a time.

I’ve paid for unjust wars in my lifetime and I’ve paid for global financial scams in my lifetime, so I’m prepared to pay for simple restaurants surviving the apocalyptic numbers we’re hearing (60% of restaurants not reopening according to Yelp).

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#56

Post by JMTQp8lwXL »

01100011 wrote: post #46

Subsidizing the restaurants without getting anything in return seems like a misallocation of capital. Allowing 'creative destruction' on a massive scale is harmful to social stability and frankly just cruel. People didn't plan for it, because it is implied in our various social contracts that they don't need to(and that may be wrong, but this is not the time to fix that). We should consider subsidizing the restaurant…

While restaurants provide food, they may not necessarily be providing quality food. Quarantine has caused some to take a hard look at their diet, and learn to prepare healthy meals at home, and reduce consumption of processed foods. Restaurant food tastes good, but is often excessive in things like sodium. Dietary recommendations likely wouldn't support eating restaurant food regularly, as people have done without questioning it.

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#57

Post by grey-area »

dehrmann wrote: post #35

Only related because NY, but NY state covid 19 new cases have been incredibly flat since June. I would think they'd trend closer to zero, up some, or just bounce around more. Normally, new cases are driven up by complacency and down by fear or policy, but there doesn't seem to be either happening quickly and subtly enough to keep new cases between 500 and 1000 for so long, and r0 should be metastable, so keeping it i…

Yes there's something going on we don't understand, because some places that were hit very hard first time round are not seeing a second wave.

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#58

Post by paxys »

It's ridiculous that we couldn't coordinate a rent/mortgage forgiveness plan alongside all the customer bans put in place across the country. If a restaurant can't stay open, they shouldn't pay rent. If the property owner isn't getting rent, they shouldn't have to pay mortgage. And so on, up the entire chain.

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#59

Post by jacobkania »

twblalock wrote: post #31
sudosysgen wrote: post #18

Earlier quoted context omitted.

Because landlording is an investment, having shelter is a necessity. The landlords should carry the risk of tenants failing to pay. If we stopped relief to everyone, tenants would stop paying, rents would crater, and landlord would be ruined much moreso than tenants, it's just the nature of investment.

The investment component of being a landlord is the value of the property. The ability to enforce contracts, e.g. that when a tenant promises to pay they must pay, it not part of the investment component of being a landlord. That is not an investment, but rather a contract between two parties. Rent is revenue. Investment is based on the value of the underlying asset. They are not the same thing. Our society has alway…

You keep saying this, but is the value of the property not what someone is willing to pay for it? If nobody can/will pay rent, the property is worthless. The risk you take on as a real estate investor isn’t just that of the property value, it’s also the risk of not having a tenant.

If you have a tenant, they can’t pay, then they leave and you can’t find another renter for a year, you’ve made a bad investment even though your property value hasn’t changed.

Re: Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

#60

Post by threentaway »

01100011 wrote: post #46

Subsidizing the restaurants without getting anything in return seems like a misallocation of capital. Allowing 'creative destruction' on a massive scale is harmful to social stability and frankly just cruel. People didn't plan for it, because it is implied in our various social contracts that they don't need to(and that may be wrong, but this is not the time to fix that). We should consider subsidizing the restaurant…

> We need to be pragmatic and get our people and economy through this crisis

OK, tax the rich. PS: It was the winning strategy before the crisis too.

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