- 30 Jul 2020 16:30
#15110629
I've been noticing a trend in the economy - a very worrying one. I have been noticing retail spaces have been disappearing, and yet, at the same time, there is more high-density housing being built.
Obviously this has only been happening in response to changes in demand in the economy.
It's very paradoxical, isn't it, that there would be fewer businesses but more housing being built.
But I think I have an explanation. There are more people than there were before, but these people are poorer with less money. And not only that, but a larger percentage of their individual household incomes are going to paying for cost of housing, since housing prices have gone up. As a result, there are fewer businesses.
At one local mall, they are planning a redevelopment, where the mall will only have half as much retail stores as it did before, but the other half will be turned into high-density residential apartments. (Many in the neighborhood are opposed to the plan, since they are concerned about more congestion on the roads)
I remember back when that place looked like a normal thriving mall, things were doing relatively well. But then after about 2008 things started changing, and the mall became half-dead. People just stopped spending much money. There were always poor immigrant mothers with their children who kind of loitered around in that mall, but it seemed the middle class consumers sort of disappeared.
I have constantly seen local businesses struggling, vacant spaces.
Which is highly unusual because there is also a housing shortage. There's basically not a single vacant apartment, condo, or house; they all fill almost immediately.
Some people will blame Amazon, but keep in mind Amazon only accounts for 5 percent of the total retail spending in the US, and of course there are many services from local businesses that can't be replaced by online retail (restaurants, beauty salons, pet stores, etc).
I think the coronavirus pandemic and government-imposed shutdown is only going to accelerate this trend, which has already been going on over the last decade or so.
And these new high-density residential spaces are not cheap. I mean, when new buildings have to be constructed, they have to recoup the costs, as well as there being a rental premium because it is a new space. It seems most of the people filling these new spaces are immigrants, crowding together, because they have few other options. The living spaces inside each unit are not very big.
It almost feels like things are dying economically. Yet all sorts of apartment buildings have gone up, jam packed right up against the side of major roads because there wasn't enough space to build them anywhere else, and things are more crowded.
Like things have undergone a transformation, and not for the better.
Obviously this has only been happening in response to changes in demand in the economy.
It's very paradoxical, isn't it, that there would be fewer businesses but more housing being built.
But I think I have an explanation. There are more people than there were before, but these people are poorer with less money. And not only that, but a larger percentage of their individual household incomes are going to paying for cost of housing, since housing prices have gone up. As a result, there are fewer businesses.
At one local mall, they are planning a redevelopment, where the mall will only have half as much retail stores as it did before, but the other half will be turned into high-density residential apartments. (Many in the neighborhood are opposed to the plan, since they are concerned about more congestion on the roads)
I remember back when that place looked like a normal thriving mall, things were doing relatively well. But then after about 2008 things started changing, and the mall became half-dead. People just stopped spending much money. There were always poor immigrant mothers with their children who kind of loitered around in that mall, but it seemed the middle class consumers sort of disappeared.
I have constantly seen local businesses struggling, vacant spaces.
Which is highly unusual because there is also a housing shortage. There's basically not a single vacant apartment, condo, or house; they all fill almost immediately.
Some people will blame Amazon, but keep in mind Amazon only accounts for 5 percent of the total retail spending in the US, and of course there are many services from local businesses that can't be replaced by online retail (restaurants, beauty salons, pet stores, etc).
I think the coronavirus pandemic and government-imposed shutdown is only going to accelerate this trend, which has already been going on over the last decade or so.
And these new high-density residential spaces are not cheap. I mean, when new buildings have to be constructed, they have to recoup the costs, as well as there being a rental premium because it is a new space. It seems most of the people filling these new spaces are immigrants, crowding together, because they have few other options. The living spaces inside each unit are not very big.
It almost feels like things are dying economically. Yet all sorts of apartment buildings have gone up, jam packed right up against the side of major roads because there wasn't enough space to build them anywhere else, and things are more crowded.
Like things have undergone a transformation, and not for the better.
- By Tainari88