Are greedy landlords destroying our neighborhood?


It was recently posted on a neighborhood Facebook page that the rising number of empty storefronts in Bucktown (the extremely trendy neighborhood in Chicago where we live) is evidence that skyrocketing rents are forcing businesses out and soon we will find ourselves living in a ghost town. The comments went on to celebrate landlords finally getting what they deserved. Those vicious bastards drove-out all the cool stores with their rising rents and then – whoops – they accidentally pushed it to far! Now no one can afford to be here anymore and its all coming crashing around. Where is my violin which I wish to play in ironic mock-sympathy?

But is that really what is going on? Could rents really be increasing at a time when all businesses were fleeing the neighborhood? The answer of course is “no”. Rent can only be increasing at a time when demand outstrips supply. So why the empty store fronts?

The simple reason is that when rents are rising dramatically, landlords can more easily afford to let a storefront sit open for a bit while they find a new tenant who will pay a much higher rent.

Imagine the normal example – the way people think it used to be. When rents are flat – give or take a few percentage points in either direction – a landlord wants to keep all his tenants because the cost of having the unit sit empty for a month or two can’t be recouped by higher rents later. As a result, landlords will aggressively try to keep their storefronts full – even if that means lowering rents a teeny bit.

However, when rents are rising rapidly a smart landlord will see a temporarily empty storefront as a good investment that can bring in a higher paying tenant later. In fact, an empty unit that is re-rented at a rent 15% higher after one month will recoup the lost rent in 10 months and generate 180% return on investment (forever!). Compare 180% return to the less than 1% return your interest bearing checking account delivers to understand how attractive this is.

So before you go expecting tumbleweed to roll across Damen Avenue, recognize that rents in Bucktown are jumping right now which means it is the best possible time for landlords to let their units and storefronts empty for a bit. Over time, things will change and the number of retailers wanting to get into Bucktown will get closer to the number wanting out, turnover will fall, and rents will stabilize. Until then, expect to see lots of empty storefronts and expect to welcome new higher-end (and arguably less-interesting) retailers.

Let’s start with “we want the same thing”

Welcome to the first A Common Sense Conservative blog post. I am aware that Conservatives often do themselves no favors when they talk about things in ways that seem exclusionary and mean spirited. My posts will take these positions, and hopefully, reframe them so that they sound as they should – generous, fair, and based in intellectual foundation. In other words, I am going to be making the case that no matter what you have heard, Conservatives are not mean – or at least no meaner than anyone else.

But first we must acknowledge that all Conservatives are not alike. Just like all Liberals are not alike. There are those we care about and those who care only about themselves.

Lobbyists are a very public group of conservatives with whom we are not concerned. They believe their lives or those of the people they represent would be better with the passing of a certain agenda. Believe it or not, politicians are another public group for which we care little because they tend to believe that their lives would be better off if they were re-elected. Lobbyists and politicians are often hired guns. Lobbyists work for the betterment of the small interests that support them. Politicians work for the betterment of themselves.

This blog is about ideas and the group of people that it cares about is idealogs. I consider myself a Idealogs and if you are reading this, you may be one also. An Idealog is someone who is interested in ideas and the ways those ideas can change society for the better. Certainly there are lobbyists and politicians who are also idealogs and hopefully their ideas line up with the agendas for which they are fighting.

Idealogs on both side of the political spectrum ultimately have their goals in common. They both want the strongest economy, the most jobs and the greatest wealth for everyone. They both want a better, free-er, more open society where everyone is better off. Where they differ is how to get there.

Idealogs on the left believe the way this can be achieved by Robin Hooding the economy. If we take from the rich and give to the poor then the people who had nothing will have something. Meanwhile the people who are rich won’t feel it because they had too much anyway. No one is really hurt. Society is better.

Idealogs on the right believe that the way you create more jobs is by helping businesses to create them. I.E. reducing their taxes and eliminating unnecessary regulations and obstacles to trade. More jobs means more working people, means more disposable income, which ultimately means greater tax revenue. Society is better!

So I ask you to follow me and keep an open mind. If you really believe that all conservatives are greedy or that all liberals are stupid or lazy, then your mind is too broken and your soul is too dark for understanding. But if you can start with the simple premise that idealogs on both side want a better world for everyone, then what I am going to say should make sense.

And I hope this can be a dialog as it so often has been on Facebook. If you think I’ve cut a corner or missed a fact, then I hope you will let me know. So thanks and let’s get started!