Just Following (Economic) Orders, or How Real Estate Turns Good People Bad

New York City has been largely spared the worst of the recent real estate collapse, which isn't entirely a good thing. Family-sized apartments in Manhattan are still selling for many millions of dollars, and only the insanely wealthy can buy homes here anymore. My neighborhood is now attracting a growing number of people with briefcases and Audis.

Retail rents also continue to multiply, and locally owned stores are desperately trying to hold on while landlords look to cash in on the ludicrously high rents that can be paid by national chain stores and banks. The latest casualty in our neighborhood seems to be the family-owned stationery store down the block. But the landlord trying to push kindly stationer Paul and his extended family's store from our corner is not some faceless real estate concern. Instead, it's our neighbors, the people who live in and cooperatively own the apartment building in which the store is housed. People like us.

The building happens to have some retail space at the street level. Until recently, city law limited the amount of money apartment buildings could make from their retail stores, a policy that helped keep thousands of lower-paying small businesses open and prevented the Wal-Mart-ization of our city. But the law recently changed, and now the middle-class residents of Manhattan apartment buildings can cash in on whatever rents the market can afford.

The people who live in the apartment building where our stationers have served the community for decades now face a dilemma: allow the family businesses to remain, or kick them out and try to bring in banks or chain stores that can pay much higher rent. They've decided to go for the money. When I asked a member of the building's decision-making board why she would do such a thing, she seemed perplexed: How could I ask her to forego rent money that is rightly hers in the name of some kind of vague principle (like not cutting our the heart of our community)?

Hearing my neighbor talk like that got me to thinking about the morality of the marketplace that runs the economic life of our nation. Corporations shut factories, lay off workers, pollute rivers, sell dangerous products, and allow unsafe working conditions, all in the name of maximizing profit for their shareholders. Causing harm in the name of money is not aberrant behavior by corporate leadership -- it's their fiduciary duty and required by law. If the biggest companies in America do it, why shouldn't our neighbors? Aren't the folks in the apartment building down the street just neutrally following the rules of the market that we all learned in Economics 101? Or, is there something morally questionable about just following such orders?

We all regularly make decisions that run counter to our economic interests. I don't steal, and wouldn't, even if I could get away with it. I didn't choose a career that would make me the most money I could make. I could probably make dog food commercials and earn a better living than I do making documentary films, but something compels me to forego the extra pay. Sometimes I give money to charity. I'm sure the residents of my neighbors' building make similar bad economic decisions all the time. So why do they allow themselves to be seduced by the lure of higher rents, if the result of their economic actions would be to cause irreparable damage to the soul of their community?

Paul the stationer knows my kids, provides change for the bus, sells good pens and pencils, and is a fixture in a vibrant neighborhood. Evicting him in favor of a chain store is not a neutral economic act. We need to make a habit of standing up for what's right, not for what's supposedly in our economic interest. I hope my neighbors, and everyone's neighbors, will come to this realization, and soon.

Comments

[jmbehrens]

I agree its a shame about the stationary store, but I think the real issue at stake is more tangible than protecting local businesses for ideological or aesthetic reasons. To me, the consequence of allowing high-income chain retail wherever the market will bear is that a) it consumes space for luxury retail that could be used to deliver a wider range of needs to the community and b) it drives up the price for surrounding retail, which propagates the system you describe above.

I used to live on the Lorimer St. side of Williamsburg ("East Williamsburg?"), and notice every time I walk in that area that another restaurant, bodega, food store or other basic services retailer has been replaced by expensive-looking storefronts that serve a very limited constituency -- one deli was closed down to open up a high-end pet store and boarding house, another for an equally high-end wine store; a small restaurant was shuddered to open a sports bar for displaced frat guys, etc.

All of these new businesses are locally-owned, but they still fail to provide any real substantive need for the community (unless I've underestimated the market for pet confectioneries). So, to me, its not merely a question of ownership, although I do agree that local ownership is almost always preferable, but a matter of services rendered, and it just seems like the wealthier the area, the more space there is wasted on non-essential (and often silly, frankly) products.

[Rule Of Law]

A very interesting title to this piece. It makes one reflect on the fact that all modern Governments are, at their core, Economic systems.

When does making a profit become an act of Fascism? When the cost of that "profit" comes at the expense of our humanity.

"For what shall it profit a man, if he shall gain the whole world, and lose his own soul?"

When we forget that there is more to being human than just having more, the Fascists win.

[cktirumalai]

I remember the days when a good number of New York City apartments were subject to rent control. Alistair Cooke, the interpreter of America to England, lived for years in a spacious apartment at a very affordable rent. I imagine the arrangement made possible the flowering of many lives and sensibilities, enriching the city and being enriched by it, whose energies would otherwise have been devoted to earning a Wall Street income. It is difficult to return to the past but one can think of a different evolutionary path.