It’s a good and interesting article, though I was under the impression that another contributor was all the empty city centre properties being “sat on” by large property holding companies, or as “theoretical money” by pension companies.
I’m not confident I 100% understand it, but the gist is:
In the skint run-down “lovable shithole” I live in, a fair chunk of the city centre has been boarded up for years and years. If you want to rent one of those units? Still £20k a year. It never dropped from its prime.
Why don’t they lower the rent, rather than let it sit derelict?
If they rent it out for £5-10k a year, it’s only worth £5-10k a year.
If it used to be rented for £20k a year, and nobody rents it, because nobody wants to pay that much, it’s still “worth” £20k a year in someone’s asset portfolio, and you can borrow money based on the theoretical value of the property, or sell it on to another developer/holding company based on its theoretical value.
So in theory, there’s plenty of smaller shops/businesses that would use these units if the rents were lowered to something affordable, but none of the owners want to lower the rents, as it “devalues the asset”.
Therefore we have a city full of small businesses desperate for premises, and a city full of semi-derelict boarded-up shop units.
Under the rest you’re making the same argument the article is - run down business districts are more frequent under uncontrolled systemic inequity.
Portfolios full of speculative property ownership are obvious targets for a “use it or lose it tax”, in an area with equitable tax law.
I dislike the headline. The truth, surely is that the internet made a substantial contribution to the pressure on the high street and growing inequality weakened even further
