The Economics of Saving Independent Businesses

The St. Mark's Bookshop, near where I grew up in Manhattan, is a longtime neighborhood institution. Lately, like so many independent bookstores before it, it's been in danger of closing thanks to rising rents and declining demand for brick-and-mortar book purchases. In response, fans of the store hit upon the somewhat odd idea of circulating a petition asking the landlord to reduce the rent.

As it happens, St. Mark's landlord is a non-profit (Cooper Union), so it's theoretically possible that moral suasion could succeed in convincing them to lease to the shop at a sub-market rate. If the landlord was a normal for-profit entity, this obviously wouldn't work. But let's pretend for a moment that were the case. The St. Mark's devotees who love the store could still attempt to use coercion to secure sub-market rents for the bookstore. One tactic, in place in some neighborhoods here in Washington, D.C. and being considered in other retail corridors, is to block the issuance of new liquor licenses. Moratoriums of this sort make it impossible to use a space within its boundaries as a bar, and generally uneconomical to use it as a restaurant, especially when combined with regulatory curbs on fast food. You can then either combine that with penalties for large chain retailers (or the simple reality that many urban structures don't offer the right kind of space for national chains) to keep market rents in the area artificially low, perhaps to the point where the bookstore can pay the rent.