Comment by strongpigeon
6 months ago
A problem is that the externalities of leaving a space vacant are not priced in. Having a bunch of storefront vacant in an area makes it much less appealing and devalues all the other properties surrounding it. It does seem like a vacant storefront tax, which is briefly mentioned at the end of the article, could address this, if partially.
This whole extend and pretend deal seems like it's simply accumulating risk hoping this will pass, while risking an even bigger, potentially systemic crash. Though I honestly don't know that much about the commercial finance world.
That would just devalue the surrounding property even more. This is why "we should just do X" is almost always a bad idea.
> That would just devalue the surrounding property even more.
Why do you think that's the case? I'm sure it would make the entire city seem like a riskier investment at first, but it seems like in the medium term it would help address the situation described in the article.
By "devalue" you mean "lower the price of" which... seems fine? Useful assets being cheaper is a good thing.
As long as you're not the owner of said asset.
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A "vacant storefront tax" would easily be circumvented by a legal entity with a vending machine business or the "owner" themselves putting one of their "offices" there (a table).
Any realistic vacant land tax with teeth would obviously need to define vacancy such that silly tricks like this wouldn't work.
And in response, owners would do something slightly less silly - just enough to technically fall within the rules, and so not be subject to the tax.
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No no no .. snails!
https://www.bbc.co.uk/news/articles/c9v1rjlekpeo