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Why do commercial spaces sit vacant? (2025)

freerange.city

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Re: Why do commercial spaces sit vacant? (2025)

#171

Post by grebc »

mlsu wrote: post #150
grebc wrote: post #145

Earlier quoted context omitted.

You don’t have knowledge into the borrowers capacity to pay based on a single vacancy.

I have the capacity to pay someone to dig a hole and fill it in. Would that be a wise use of my resources? We're talking about the whole sector here, not one borrower. Huge swathes of commercial real estate are sitting empty, that's a big ongoing problem for everyone whether the loans are being serviced or not.

Dig and fill away dear fellow, that's what this site does best.

The whole sector doesn't have a vacancy problem. And it's not a problem for the banks nor the owners if they're servicing their loans. Sure they're not making money but that's not your or anyone else's problem either.

Re: Why do commercial spaces sit vacant? (2025)

#172

Post by grebc »

scraptor wrote: post #147
grebc wrote: post #131

Earlier quoted context omitted.

What you’re proposing is a brand new tax just because you don’t like people who play by the rules as written. Well done. Way to encourage people to not do things.

The specific proposal is not great but changing the rules is in fact the correct solution of the current rules lead to systematically bad outcomes.

How is it systematically bad? Is there a banking crisis?

Re: Why do commercial spaces sit vacant? (2025)

#173

Post by Redoubts »

dietr1ch wrote: post #170
limagnolia wrote: post #158

Earlier quoted context omitted.

Most of the US does, its called property tax. Or in some cases, land value taxes.

Not the same because it does not depend on utilisation. Pretty much everywhere you see property taxes, but vacancy taxes are a lot more recent and I guess rare so far.

Arguably vacancy taxes are just Georgism with extra steps

Re: Why do commercial spaces sit vacant? (2025)

#174

Post by dietr1ch »

Redoubts wrote: post #173
dietr1ch wrote: post #170

Earlier quoted context omitted.

Not the same because it does not depend on utilisation. Pretty much everywhere you see property taxes, but vacancy taxes are a lot more recent and I guess rare so far.

Arguably vacancy taxes are just Georgism with extra steps

If you wanted to switch to Georgism it seems that you'd need to add that and slowly shift taxes into just being the vacancy taxes.

Switching to Georgism overnight seems way too hard to execute.

Re: Why do commercial spaces sit vacant? (2025)

#175

Post by grebc »

em-bee wrote: post #169
grebc wrote: post #140

Earlier quoted context omitted.

That’s the free market in action. You can’t afford something, so you don’t buy it.

you are missing the point, i don't care if i can buy this or not. i care that the street is attractive to people. if i do have a shop in the street (because i can actually afford it) then i care even more because if the street is not attractive then that is hurting my business. the problem is not that i can't afford it. the problem is that NOBODY can afford it. free market rules then suggest that the value of that th…

Yes I understand your point - you are just a commentator with no actual interest in the matter hand. Not an owner, not a tenant, just some random stranger strolling on the street thinking other people should do something because you think it's the greater good.

Now you're proposing a different ownership model completely or that a government/city should be able to force a legal owner out of their legally owned property?

Honestly I think you need to back up and really consider what you're proposing.

Re: Why do commercial spaces sit vacant? (2025)

#176

Post by userulluipeste »

bluGill wrote: post #113
pif wrote: post #45

Say what you want, but a law that lets you pretend that the value of a building is based on what you ask, rather than what you can actually obtain, is a stupid law.

What is a better option? Before your answer, remember it sometimes really is the case that the economy is down and in two years things will recover and everything will rent out again. Your answer needs to smooth that out.

"remember it sometimes really is the case that the economy is down and in two years things will recover and everything will rent out again"

Where do we draw the line between reality and fantasy then? If the terms of a deal are not reflecting the reality of the moment (i.e. the office rent market demand quotes) but some figure people come up with on their own, then let's call it what it is -- gambling (in which case it should be treated as such).

Re: Why do commercial spaces sit vacant? (2025)

#177

Post by userulluipeste »

em-bee wrote: post #78
WCSTombs wrote: post #35

(2025). > The obvious thing cities could try is to put more pressure on building operators to fill their spaces, but the building operators are already under a ton of pressure — they’re losing a bunch of money! So, cities could do something like put a vacant storefront tax and… make them lose even more money? If that “worked,” the mechanism would be to force a lot of commercial property to default, which could put a…

another possible remedy would be to find ways to change the conditions of the loan so that building owners can continue to pay off their loan at better rates that match the income they can make from rent.

Then you'll most likely get moral hazard. That is, rather of people acting in their own limits, as responsible business parties, they would instead be encouraged this way to make deals which they know won't be able to carry through, then after getting this metaphorical foot in the door, they'll expect "to change the conditions of the loan", i.e. beneficial intervention on their behalf (and a kind of bait-and-switch).

Re: Why do commercial spaces sit vacant? (2025)

#178

Post by grebc »

nitwit005 wrote: post #135
grebc wrote: post #133

Earlier quoted context omitted.

You’re paying the loan, go for it son.

I commented about the logic of the bank's forecasting. Your response doesn't make sense in that context.

Your fictional scenario doesn’t make sense either? Why should it warrant a serious reply.

Re: Why do commercial spaces sit vacant? (2025)

#179

Post by joshka »

advisedwang wrote: post #98
joshka wrote: post #14

Sounds like fraud with extra steps.

Who is being defrauded? Who even is the fraudster? The operator of the building is losing money, so clearly they're not making a gain from anyone

Yeah, I probably don’t mean fraud in the narrow criminal sense.

The thing that feels fraud-ish to me is that the loss doesn’t just disappear because nobody books it. A huge amount of capital and useful urban land is tied up preserving a fictional valuation and someone is paying for that somewhere.

Maybe it’s not a clean “X stole from Y” thing here, but it still means real businesses are displaced, worse downtowns, and less of the city that could have existed otherwise. I haven't seen this sort of thing as much in Australian cities where I'm from, but have a lot in the US where I live.

So maybe a better way phrasing "fraud on the public commons" is closer to what I mean. Everyone involved is probably acting rationally inside the system. The public still gets stuck living inside the dead space created by the fiction created by it and ends up eating that cost.

Re: Why do commercial spaces sit vacant? (2025)

#180

Post by grebc »

nitwit005 wrote: post #159
grebc wrote: post #143

Earlier quoted context omitted.

Have you ever considered that your opinion, that it’s worth less, is incorrect?

That's another way of phrasing what I asked you to explain, without actually answering.

You’re stating the outcome - the property is worth less - without understanding how people buy/sell said property. And asking why others don’t agree?

The article outlines the methods used for the most part to the best of my knowledge, as someone who owns and deals in this space.

I think you need to lay out a better argument for why your thesis is the case when what happens in the real world mirrors what the article discusses. Not to mention people forget property can be owned without a bank/loan, nor that vacancies are expected/factored in.

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