NYC Vacancy Crisis Could ‘Cascade’ Without Coronavirus Help

NEW YORK CITY — Urban blight across New York City’s commercial corridors could be the longest-lasting symptom of the coronavirus, even after its days as a human plague come to an end.

The signs are already showing — vacant storefronts dotted across formerly bustling neighborhoods.

Recent Patch surveys along six neighborhoods’ main streets found roughly two shuttered storefronts per block.

Many of those businesses closed amid the pandemic. And many more could darken once a statewide commercial eviction moratorium ends, said Kathryn Wylde, president and CEO of the Partnership for New York City.

Wylde warned that could create a “cascading crisis” akin to the 2008 economic collapse — first a massive failure of small businesses to pay their rent, followed by property owners being unable to pay taxes, causing the city to go into a deeper financial hole and, finally, the foundations of financial institutions fracturing.

“This is not unique to New York City, the problem is greatest here but it’s across the whole country,” Wylde said.

Empty Storefronts Everywhere

Take a walk down Fifth Avenue in Park Slope and you’ll see shoppers lined up outside boutiques and restaurant patios bustling with outdoors diners, even this deep into the coronavirus autumn.

But take a closer look and you’ll see empty storefronts, dotted like missing teeth in a wide smile.

A recent Patch survey counted 66 vacant storefronts along 31 blocks of Fifth Avenue. That’s roughly two per block and 13 percent of all storefronts along that stretch.

Pre-pandemic, the vacancy rate hovered around 8 percent.

Likewise, a 30-block stretch of Broadway on the Upper West Side had 47 empty storefronts in 2019. This year, Patch found 57 vacant storefronts along the same stretch.

Patch conducted vacancy surveys in six neighborhoods. We found, not counting active construction sites or businesses that shut down during the pandemic but pledged to reopen at a later date, the following results:

• 12 vacancies along eight blocks of Austin Street in Forest Hills. That’s 1.5 vacant storefronts per block.
• 42 vacancies along 11 blocks of Harlem’s 125th Street. That’s 3.8 vacant storefronts per block.
• 57 vacancies along 25 blocks of Ninth Avenue in Hell’s Kitchen. That’s 2.3 vacant storefronts per block.
• 57 vacancies along 30 blocks of Broadway on the Upper West Side. That’s 1.9 vacant storefronts per block.
• 66 vacancies along 31 blocks of Fifth Avenue in Park Slope. That’s 2.1 vacant storefronts per block.
• 66 vacancies along 30 blocks of Second Avenue on the Upper East Side. That’s 2.2 vacant storefronts per block.

Some places appeared to be weathering the crisis better than others, particularly Austin Street where vacant storefronts accounted for 7.8 percent of all businesses surveyed.

Other stretches presented more of a bleak picture. Ninth Avenue had a whopping 11 empty storefronts between 49th and 51st alone.

An even better picture of New York’s vacancy crisis likely will emerge when a citywide database of empty storefronts goes live in February 2021.

The database will be the product of a 2019 City Council bill — a sign that the vacancy crisis is a long-standing issue. But lawmakers like Council Member Helen Rosenthal, who represents the Upper West Side, and experts agree the coronavirus pandemic deepened the crisis.

"This increase in storefront vacancies is not good for the UWS nor the economic health of the City,” Rosenthal said. “COVID made what has been an ongoing problem even worse.”

‘A Universal Solution’ Needed

Back in the seemingly long ago early days of COVID-19 less than a year ago, the shutdowns designed to stop the virus’s spread weren’t expected to last long.

Wylde remembers officials talking about a three-month shutdown that could snuff out the pandemic without lasting harm to the economy.

Nine months later, New York City has still only partially reopened. The prolonged economic limbo plunged small businesses into deep financial depths — one that Wylde’s Partnership For NYC has both documented and aims to avert.

Up to 33 percent of the city’s small business could permanently go under, a Partnership for NYC study from July warned.

Lawmakers and others since have proposed a variety of different solutions — the city’s Open Restaurants and Open Storefronts programs, so-called “COVID-19 Recovery Leases” that offer property tax relief to landlords who negotiate new, affordable leases, and more — but none tackle the entire problem.

And time could be running out, Wylde worries.

A state commercial eviction moratorium expires Dec. 31. Small businesses could enter the New Year facing the prospect of paying nine months of back rent they can’t afford, Wylde said.
Scores of small businesses will go under, she said.

“The immediate crisis is how to handle the end of the eviction moratorium,” she said.

Gov. Andrew Cuomo has extended the moratorium before, but Wylde pointed out that doing so again will add even more back rent businesses will have to pay off.

The call to “cancel” rent would only shift the burden onto landlords with mortgages and tax bills to pay, Wylde argued. At some point, federal assistance would have to come into play, she said.

“If that doesn’t happen we’ve got to be prepared and figure out how we’re going to manage what could be a substantial crisis,” she said.

The “substantial crisis” Wylde fears is the cascade starting at vacant small business storefronts and ending at cratering public and financial institutions.

Right now, the only option small businesses have is to renegotiate their leases. It has led to some stopgaps, like letting restaurants pay off leases with a percentage of profits.

Wylde said the coronavirus crisis makes such “creative” solutions a necessity, and she pointed out that her group hopes to continue discussions between city and state officials and banking regulators who can ease burdens on small businesses.

But so far no public policy solutions exist.

“This is a situation that’s universal, it’s going to affect every neighborhood, and we really need a universal solution,” Wylde said.

This is part of a series by Patch about retail vacancies in New York City. Read our coverage of the Upper West Side, Upper East Side, Hell's Kitchen, Harlem, Forest Hills and Park Slope.

Patch reporters Nick Garber, Maya Kaufman, Anna Quinn and Gus Saltonstall all contributed to this report.