The New York Times seems puzzled that the laws of economics insist on fulfilling their pronouncements:
East Harlem has been undergoing a resurgence for two decades, yet the neighborhood is still pockmarked with four- or five-story walk-ups where the ground-floor stores are bustling and the apartments above are devoid of life. Their windows are boarded up, blocked up or just drearily empty, torn curtains testifying to no one’s having lived there for years.
Although the vacancy rate in Manhattan hovers at 1 percent, at least some of the landlords of these sealed-up buildings — hundreds of them exist in pockets across the city — are deliberately keeping their buildings mostly vacant, content to earn income from first-floor commercial tenants rather than deal with the trouble and expense of residential tenants.
In some cases, city housing officials say, landlords are waiting for a revived economy to raise rents so that it makes financial sense to repair plumbing and electrical wiring. In other cases, landlords are “warehousing” apartments for the moment that a deep-pocketed developer comes along, as has happened in the blocks just north of 96th Street, East Harlem’s southern boundary. In still other cases, it is simply mystifying that apartments would be left vacant for decades, particularly since East Harlem has been a magnet for Mexican and other Latino immigrants, as well as young strivers looking for cheap space.
This phenomenon is hardly “mystifying” and can be explained almost entirely by basic economics: