The death of small businesses in big cities, explained

[Retail Fan+ (Justin Hill)]

The death of small businesses in big cities, explained

Not even shopping locally can save your favorite mom-and-pop â€" the problem is much, much bigger than that.

By Rebecca Jennings, Vox | @rebexxxxa | Oct 16, 2018, 1:20pm EDT


f you want to understand “retail death” â€" and I’m using quotes here because the concept of buying and selling things is very much alive â€" all you have to do is look at one very specific street.

In the ’90s, the stretch of Bleecker Street that snakes north through New York City’s Greenwich Village was home to dozens of independently owned bookshops, sex shops, antique stores, and framing galleries. But the death knell rang when the luxury fashion house Marc Jacobs decided to settle there in 2001, the year after the nearby Magnolia Bakery was featured in an episode of Sex and the City.

Within the next 10 years, 44 of those original neighborhood businesses would close to make space for the chains and luxury boutiques that followed. By now, the big brands have moved on, leaving nearly a quarter of storefronts sitting vacant for months on end and asking sky-high rents that small businesses can’t afford. The only ones that can are major developers.

Last month, the real estate behemoth Brookfield Properties announced that it would take over several storefronts on Bleecker to create an “incubator” for brands that have already proven their success online and are dipping their toes into brick and mortar. And, of course, there will be pop-ups and installations that one can pretty confidently assume will be optimized for Instagram.

Short-term leases arbitrated and approved by huge real estate monoliths is increasingly becoming the reality of retail. And throughout New York City’s transition from a place where a middle-class person could maybe make a living opening and running a business to a place where, well, good luck with that, there’s been one person chronicling it all: Jeremiah Moss.

Moss is the author of the blog Vanishing New York, where since 2007 he’s been lamenting the death of mom-and-pop stores all over the city and engaging in activism to try to save them. Moss (a pseudonym; he revealed in a 2017 New Yorker profile that his real name is Griffin Hansbury and works primarily as a psychoanalyst) has been a staunch critic of this trend, which is certainly not limited to New York City. In fact, it’s become an inevitability in nearly all major US cities.

The loudest message we seem to get in response, from politicians, from community leaders, and from each other is to “shop local.” Support independent businesses with your dollars rather than going to Walmart or Amazon, and your favorite record store or dive bar will never have to close.

Moss’s latest blog post, published Monday, takes aim at this idea. “The Trouble with ‘Shop Local’” doesn’t blame the act of shopping locally, which he stresses is important â€" it’s the way politicians use the phrase to deflect blame from the system and onto individual consumers.

To be clear, we can and should be spending our dollars at independent businesses as much as possible, both to support our local communities and to avoid contributing to the massive wealth and terrible labor practices of retail megaliths. But buying a couple of extra items from the bookstore around the corner likely won’t save it â€" even if everyone in town does the same.

I spoke with Moss over the phone about his piece, in which he criticizes the neoliberalism â€" the free-market, capitalist approach to governance â€" that permeated in New York in response to the city’s financial crisis in the late ’70s and ultimately spread globally. He argues that it’s because we’ve come to take the free market (which he says isn’t really “free” at all because of the tax breaks that cities give big businesses and developers) so much for granted that we don’t demand meaningful change where it really counts: in state and city policy. The following interview has been edited and condensed.



Rebecca Jennings: What was happening in the ’70s that led cities to neoliberalism?

Jeremiah Moss: In the early part of the 20th century, [we had] racist housing policies, redlining in particular, and then in the 1960s we had attempts to correct the inequality of racist policies. And then there was a white backlash against those attempts to correct. So what was happening leading up through the ’70s is that New York City was becoming a social democracy. It was becoming a city that was geared towards taking care of its people, putting money into public resources, public parks, libraries, public housing.

Neoliberal ideas around privatization or regulation â€" running the government like a corporation, austerity for the working classes â€" those ideas had been floating around, but they didn’t have any success until the fiscal crisis in New York City of the 1970s.

Naomi Klein writes a lot about neoliberalism as a shock policy. It comes in [and] takes advantage of crises. The fiscal crisis in New York was perfect timing to introduce these concepts and to have the bankers take over the government. Undergirding that, which doesn’t get talked a lot about, is that neoliberalism worked in large part because of the underlying racism that was going on. This idea was sold that “you white people, your taxes are going to welfare for lazy black people.”

What had previously been a government for the people became a government that was catering to big business, big real estate developers like Donald Trump, and tourism. They took that public money that was going to the poor and they gave it to the wealthy in the form of different types of tax breaks or other incentives for developers.

Rebecca Jennings: What happens to a city when you run it like a business?

Jeremiah Moss: [Michael] Bloomberg really perfected this. Bloomberg saw the city as a corporation. He saw himself as the CEO of that corporation. This is very neoliberal orientation: Citizens are no longer citizens; we are consumers. That really gets into your head, right? Because citizens engage with democracy. They resist, and consumers don’t. Consumers consume and buy stuff.

Rebecca Jennings: How did this spread outside New York?

Jeremiah Moss: It started in New York City under Mayor [Ed] Koch, and Reagan took it and ran with it. It became Reaganomics, [which then spread to] Margaret Thatcher in the UK and then across the Western world and beyond. When we talk about what I call hyper-gentrification in New York, it’s really a global problem. It looks exactly the same in city after city after city. You see the same ideas getting recycled over and over and over again.

Rebecca Jennings: So if running cities like corporations is contributing to the demise of small businesses and turning citizens into consumers, why are these ideas still so popular?

Jeremiah Moss: For one, a lot of this is deep in the DNA of America; it appeals to the individual. This might be going too far afield, but the loss of religion as an organizing force of a sort of hopeful benevolence or as an authority â€" you see what I’m saying? The people need authority, and so the new authority is the CEO. This is how Bloomberg became mayor after 9/11. This is how we end up with President Trump.

Rebecca Jennings: You talk in your piece about how the biggest threat to small businesses isn’t people not shopping there; it’s the landlords who are quadrupling the rents. Who are these landlords, and how do they decide to just suddenly raise the rents by so much?

Jeremiah Moss: Well, they can do it because it’s the free market. [But] I would say that there’s no such thing as a free market. The idea of the free market is that the government does not interfere whatsoever, but [it does]. When the government is using eminent domain to seize people’s private property and hand it over to developers, that is interfering with [the] market. That’s corporate welfare.

What I’ve observed is that a lot of landlords who are throwing out small businesses are a new generation and a new class. The mega-landlord, these are the landlords like the Kushners, these are hedge funds that are getting into landlording. They come in and they buy up whole portfolios of properties with the intention of pushing out the residents and the commercial tenants.

I see this generational thing where a lot of the older landlords will say things like, “I’ve got enough money. How rich can I be?” These are people who were born before the advent of neoliberalism. Now the idea is, “How dare you try to regulate greed!” As a culture, we’re constantly policing each other’s hunger in terms of eating food, consuming alcohol, drugs, sex. But when it comes to money, sky’s the limit.

Rebecca Jennings: The crux of your piece is how politicians use the phrase “shop local” in order to shift blame onto their constituents for the demise of local businesses, when really they’re the ones with the power to change policies that are contributing to that. When did we see the rise of that?

Jeremiah Moss: Certainly in the past 10 years, I’ve seen it more. I want to be clear that I think we all should be encouraged shop locally more than we than we do. The problem is when the people who are empowered in the system are using it to distract us and shift the blame onto the individual because they don’t want us to join together. They don’t want us to become a collective and go after the source.

Rebecca Jennings: You also talk about how this attitude permeates the way we think about other problems â€" climate change, sexual violence. How does neoliberalism encourage that?

Jeremiah Moss: One of Margaret Thatcher’s famous slogans was there is no such thing as society, that we are all just individuals. Once you take that message into your cells, what happens is you become purely competitive. It’s every man and woman for him or herself, and that also has a relationship to consuming. If I’m going to be selfish, then I’m going to consume more and I’m going to be first in line for the next iPhone. It feeds the consumer machine.

We can’t get organized if we’re just individuals because they know that if we organize, we can defeat the power structure. For those of us who care about things like the environment and women’s rights and shopping, we’re [also] more likely to feel guilty: “I’m not a good enough person if I didn’t bring my canvas bag to the grocery store, because I have been imbued as an individual with so much power.” Of course, we have not been imbued with any power. We’ve been imbued with the illusion of power.

Rebecca Jennings: And, of course, even if you did bring your canvas bag, it still wouldn’t save the environment.

Jeremiah Moss: Right, those little choices that we make are not going to solve the underlying problems. It’s people in power making those choices. But they can also trick us into thinking we’re doing something, so they can kind of lull us into passivity.

Rebecca Jennings: Do you think it’s a myth that the internet is killing retail?

Jeremiah Moss: I think it is definitely doing damage. I think the myth is when people say it’s the internet alone, because it really goes back to the rents. I really believe that a lot of these shops, if they had their original rents before all this blew up, they could weather Amazon, because if you don’t need to make $40,000 a month in rent, you can survive the internet.

Rebecca Jennings: What do you think the biggest problem is with the rise of these mega-developer-owned spaces that are designed for short-term leases and pop-up spaces?

Jeremiah Moss: They’re curated by these developers, but there’s nothing organic. There’s nothing truly urban or diverse about them. You can’t start a business with a one-year lease. In the first year, you don’t make any profit. If we are a society, we need each other, and we need those small-business people to maintain the social network of our neighborhoods, and they’re being destroyed. Pop-ups are not going to replace that.

Rebecca Jennings: Often the death of department stores and malls is discussed in the same breath as small businesses closing, that it’s all related to the larger trend of “retail death.” How do you think about those things?

Jeremiah Moss: People, particularly younger people and retired people, it seems, want to be in the city. I think part of that is a desire for the downtown experience. When you look at a suburb like Maplewood, New Jersey, there’s enough there. They have this really lovely downtown, and you can walk and you can get ice cream, dinner, buy a book, do a little shopping. If we had suburbs that functioned like that, I think that many people would be content to stay there.

The mall can be very alienating. I’m not going to miss the mall. They replace the vibrant small town, town squares, and downtowns across America. Walmart is famous for killing downtown. A Walmart opens up and the little hardware store and the pharmacy, they close right away.

Rebecca Jennings: You walk around in any city these days and you’ll see a million vacant storefronts. What do cities need to do to fight this?

Jeremiah Moss: The first thing we need to do is become collective again. We need to get connected with each other, and we need to fight the psychological war that’s been going on. When you hear Mayor [Bill] de Blasio say, “Hey guys, shop local. It’s on you.” We have to push back against that. Critical thinking is really the first step, but then we need to demand that our elected officials take action.

What’s very difficult is that most of our elected officials are neoliberals, whether they’re Republican or Democrat. They take money from big real estate. Are they going to go against big real estate? Hopefully some of them will be brave enough to stand up, but we have to have campaign finance reform to get big lobby money out of government.

Until that happens, we need to insist on new policies, because the New York that we see, the empty storefronts, all of that, they are all the creation of policy. Gentrification is public policy. The government uses it as public policy; it’s not natural. It’s not accidental.

The city and the state collude to use eminent domain in ways that really are unconstitutional. With eminent domain, the government can take your property for public use, so [for] a public hospital or an on-ramp or a public highway. But what they do now is they take your private property, then they give it to private developers so that they can build luxury condos and things like that.

The Small Business Jobs Survival Act is coming up, and that’s hopefully number one. We need a vacancy tax. We’ve been pushing that for a few years to tax landlords who leave commercial spaces vacant for too long.

Rebecca Jennings: Obviously your job is sometimes very depressing. How do you stay hopeful â€" or do you?

Jeremiah Moss: I’m angry more than hopeful. I think I’m fueled by the anger. I’m fueled by the injustice in that sense of “this is wrong.” I really don’t like the gaslighting that goes on. Neoliberalism relies a lot on gaslighting. “What you see is not happening, it’s something else.” That kind of switcheroo, that kind of mindF!!!ing â€" I’m a psychoanalyst; that’s how I make my living, so I don’t like seeing that get done to people. It’s very damaging.

[TheFugitive]

Is the author really lamenting the loss of sex shops??

For the rest of the businesses that's very sad, but it's capitalism.
If you owned a building you'd want to get the maximum rent for your property
that you possibly could.  In most cases that is going to be from a bigger chain.

New York City has experimented with rent control in the past, generally with
disastrous results.

[scottw73]

""The mall can be very alienating. I’m not going to miss the mall. They replace the vibrant small town, town squares, and downtowns across America. Walmart is famous for killing downtown. A Walmart opens up and the little hardware store and the pharmacy, they close right away."

In a sense that's true, but on the other hand it's a matter of convience, for example before Lowes, Home Depot, Walmart, etc. If you wanted to build a shed in your backyard, you went to the hardware store to buy a hammer, nails and a saw, then you went to the lumberyard to purchase the wood, then you drove to the paint store to buy paint and brushes. Back then gas wasn't $3 a gallon and you didn't mind paying a little more for the materials. Now fast forward to 2018 and you want to build a shed, instead of going to 3-4 places, you now can go to one store and buy all of your materials at once, henceforth saving you money. I agree downtown America is being killed, unfortunately mom and pop stores can't compete with the vast inventory of a Walmart or Home Depot.

[BillyGr]

In a sense that's true, but on the other hand it's a matter of convience, for example before Lowes, Home Depot, Walmart, etc. If you wanted to build a shed in your backyard, you went to the hardware store to buy a hammer, nails and a saw, then you went to the lumberyard to purchase the wood, then you drove to the paint store to buy paint and brushes. Back then gas wasn't $3 a gallon and you didn't mind paying a little more for the materials. Now fast forward to 2018 and you want to build a shed, instead of going to 3-4 places, you now can go to one store and buy all of your materials at once, henceforth saving you money. I agree downtown America is being killed, unfortunately mom and pop stores can't compete with the vast inventory of a Walmart or Home Depot.

Or you could just go to your local hardware store (which is privately owned, though affiliated with one of the bigger names such as True Value) which already sells all those things and has since before Lowes and Home Depot even existed in the area.
Likely does cost a bit more (as they don't sell the same volume, even with working with a brand to help on that) but still all in one place.

[TheFugitive]

We still have a fair number of these mom and pop hardware stores around.
They are very cool, but slowly they are disappearing as the owners die or retire.

[shore72]

A downtown will generally evolve or die. There are numerous issues at work; I think of the old business district in my small town: Mayberrryesque, it once sold anything you could ever need but today it's mostly a collection of thrift stores. What happened? 1) There was no room to expand down there so the more successful places moved to the edge of town. In the 50's the biggest supermarket in town was an "American Store" (Acme). To fit even a modest modern supermarket downtown would require bulldozing most of a block! Which leads to 2) you'd need the rest of the block for the parking lot. 3) Folks used to be loyal to their town. They knew the store owners & the store owners knew them. Now folks will drive 20 minutes to Wal*Mart to save a dollar. 4) Profit margins on most small businesses have dwindled for years. In many, many cases "Mom & Pop" are only keeping the doors open because it gives them something to do. The kids don't want to work for a nickel an hour, and who wants to buy a business that's in the red?

I suppose the dynamics are a lot different in a large city where you have a captive audience that can't readily jump in a car and be at a mall or big box store in 15 minutes. Thought: if a giant old dinosaur of a building in the inner city doesn't get a facelift every so often, that neighborhood will slide downhill. But who wants to sink millions (probably 10's or 100's of millions) into such a project unless they could get a return on their investment?

[TheFugitive]

The business district in my neighborhood used to be filled with grocers, shoe stores, butchers, green grocers, hardware and even department stores in the 1950's.

Today it is doing well with few vacancies, but the mix of merchants have changed.
Today it is small cafes, coffee shops, hair salons, bakeries and specialty merchants like an
antique record store and a custom bike shop.