I write sporadically. Most will appreciate that. This month in Proud Places we are talking about vacancies. Regardless of what you see as the original factor in the “Vacancy Vortex”, I am going to bet that you don’t enjoy looking at buildings and streets and seeing them boarded up, unkept, with grown weeds and failing brickwork, maybe with a hideous 80s faux facade thrown on top of the original terracotta.
No one enjoys that.
I attribute the vacancies in downtowns to the fact that we don’t build houses or shops or hotels. We build debt instruments. Thus the efficiency of the system manifests on its financials and not the quality of construction. Look at almost everything around you. Chances are you are looking at buildings that have been designed with a limited life span.
I focus on downtowns because those are the places that were built to last and that, incredibly, have outlasted constant attacks and inhuman neglect and are standing proud underneath all that’s been thrown at them.
Lately I’ve been learning about cryptocurrencies, especially about Bitcoin. Knowledge in the way it works and what it can do will invariably lead to learning about monetary systems. The money we use has been devaluing for decades. This is why house prices keep going up like crazy and salaries are never enough. It’s why retirees cannot live off their pensions and American families have almost no savings.
We have done to our cities the same that we have done to our money. Each new dollar that is minted reduces the value of the ones in your pocket. Each new building with a limited life span that is mostly used as a tax write-off devalues the ones in your downtown. Vacancies ensue.
Sure, there are landlords from out of town who have no interest in having live buildings and would rather have the write-off. Others will rather keep them empty until a sucker comes and pays the ridiculous amounts they think it’s worth. This happens especially in hot markets like New York and San Francisco. Those can be dealt with by regulating and enforcing. But no amount of punitive action will make the economy move or bring in new businesses to broaden the tax base and increase the revenue in places where the economic engine is shut off.
So next time we’ll be talking about the vitality of the local economy, different time preferences that inspire beautiful walkable downtowns on one hand and lifeless sprawl on the other, and how those two concepts connect to small businesses and healthy communities.
More to come soon. Your friend,
“Crypto” Jaime Izurieta