Map shows the storefronts studied in SoHo. Blue dots represent occupied stores; pink dots represent vacancies; yellow dots represent vacancies with construction or a store coming soon. Image Credit: NYC DCP
The causes of vacancies vary due to differences in local economies and other community characteristics. On August 8, 2019, the Department of City Planning released “Assessing Storefront Vacancy in NYC”, a report which examines retail patterns and storefront vacancies across 24 different neighborhood shopping corridors around the city.
The report concluded that due to rapid changes in the retail industry across both the city and the country, vacancy rates vary by neighborhood and cannot be explained by one factor. DCP examined 10,000 storefronts across these 24 neighborhoods.
The 24 neighborhoods studied included Morris Park, Longwood and Kingsbridge in the Bronx; Bedford-Stuyvesant, Brownsville, Cobble Hill, Coney Island, Fulton Mall, Park Slope, and Williamsburg in Brooklyn; Canal Street, Flatiron/Union Square, East 14th Street, West 14th Street, Hamilton Heights, Inwood, SoHo/NoHo, Upper East Side and Upper West Side in Manhattan; Astoria, Jackson Heights and Laurelton in Queens; and New Dorp and Port Richmond in Staten Island.
The report broke down storefront businesses into three categories. “Food and beverages” covered businesses like restaurants, bars, and supermarkets. “Services” were businesses like salons, banks, and dry cleaners. “Dry retail” businesses sold goods, like apparel, electronics, books or furniture. According to the report, e-commerce spending increased for dry retail, but brick and mortar spending increased for services and food and beverage establishments.
Industry experts consider a five to ten percent vacancy rate as “healthy”, with some fluctuation. In the neighborhoods studied, the vacancy rates ranged from 5.1 percent to 25.9 percent. Higher-end Manhattan shopping corridors tended to have higher vacancy rates. Of those studied, the neighborhoods with the lowest vacancy rates were Jackson Heights (5.1 percent), New Dorp (6.7 percent), Kingsbridge (7.8 percent), Morris Park (8.1 percent) and Laurelton (8.3 percent).
List of studied neighborhoods and the specific streets reviewed for the study. Image Credit: NYC DCP
In neighborhoods with moderate-to-high vacancies, the vacancies are due to many factors including but not limited to the local customer base, building types, transit access, and zoning regulations. According to the report, SoHo/NoHo and Brownsville have the same 13 percent vacancy rate but are caused by different reasons. In SoHo/No/Ho, a spike in the vacancy rate was caused by a combination of high rents, a rent bubble that promoted vacancies, zoning restrictions that limited the kinds of businesses allowed and a large stock of available space to fill. However, in Brownsville, a weaker retail market, limited subway access and a lack of anchor stores in the area contributed to the neighborhood’s high vacancy rate.
According to the report, New York City may not be as affected overall by these national shifts in consumer behavior because many of the retail corridors are already compromised of more food and beverage or service businesses than dry retail.
DCP Director Marisa Lago stated, “In an ever-changing city where neighborhood shopping is an important facet of urban life, it’s crucial that we put as much reliable data as possible into the hands of business owners, residents, policy makers and elected officials. DCP’s research shows that the reasons for storefront vacancies are complex and varied and that solutions must be nuanced and targeted – or we may do more harm than good. And, encouragingly, our research also reveals that many community shopping districts are thriving.”
To read the report, click here.
By: Veronica Rose (Veronica is the CityLaw fellow and a New York Law School graduate, Class of 2018.)
I find it curious that the study did not survey “high street” retail corridors such as Fifth Avenue, Madison Avenue and the Herald Square District – which have suffered extreme and atypically high vacancy. I guess this is because these areas are not considered “neighborhoods”? Still, I think an analysis of these areas would be compelling as well.