[lotsofpulp]

My guess is that customers wanted cheaper food and drinks?

It is well documented that operating cafes and restaurants is among the lowest probability avenues for becoming rich, and highest probability avenues for the business failing.

This is most likely a consequence of demographics and excessive rent seeking. Labor prices go up, and people are only able or willing to pay so much for food service before deciding it is better to do it themselves.

[smatija]

It's pretty clear there that half of the problem was caused by liberalization of student work, while other half (urban rents) was mostly consequence of horrendously irresponsible way that privatized social (not public) property through Jazbinšek law.

[TekMol]

    excessive rent seeking

What is excessive rent seeking? Isn't rent based on supply and demand?

[lotsofpulp]

When spaces in urban areas stay empty for years on end, that is excessive rent seeking.

When a person wanting to start a business chooses not to because there is a 90%+ chance all their efforts will result in most of the profit going to the landlord when the lease renewal comes up, that is excessive rent seeking (most visible as only franchise or chain restaurants opening).

When young people in the bottom two income quintiles can see they will never be able to save enough (because of spending their money on rent and higher prices paid to businesses that are paying rents) to afford buying a place of their own, so they forgo pursuing goals of forming families, that is excessive rent seeking.

[TekMol]

How is spaces staying empty related to rent seeking? It seems the opposite? If they stay empty, there is no rent.

The other two points seem to be about the price level, not about "seeking"? Do you suggest owners of buildings should rent out their buildings below the market price?

[lotsofpulp]

An empty space in an urban area is always a cost to the public, by way of providing zero utility, yet everyone having to expend time and energy to commute around it. The owner is squatting on it, waiting for other people to work to make the surrounding area more desirable, at which point they can enjoy the higher rents.

Basically, the owner gets something for nothing, which is tantamount to rent seeking.

[TekMol]

How does that prevent the owner from renting out the building now? Why don't they rent out the building for a lower rent now and for a higher rent later, when the area is more desirable?

And how are they getting something for nothing? Would you say the same about all ownership? Like when someone owns stock in a company or owns pension rights?

[lotsofpulp]

Renting involves risk. Risk that you pass up a higher paying tenant in the future, risk that your property is damaged, and is just extra work in general. Based on the amount of empty parcels and storefronts we see for years and years, many landlords clearly don’t care about smaller amounts of profit today.

> And how are they getting something for nothing?

Because they didn’t do anything. They didn’t do the labor of developing a structure, renovating it, operating a business, or even managing a tenant if they left it empty. Yet they will get protection from the police and courts and military for their property, and a higher price when they do sell.

> Would you say the same about all ownership? Like when someone owns stock in a company or owns pension rights?

Depends how the company earns money. Is the company doing something now, or taking advantage of excessive protections granted by the government. For example 100+ year long copyright terms, or recurring charges for structural monopolies without improving infrastructure (Comcast, etc).

On a societal level, one can see the elderly population who cannot provide for themselves depends on rent seeking as a whole (whether via sophisticated financial agreements or simply traditions that oblige children to take care of older generations).

Which isn’t a problem in and of itself, but excessive amounts of it is, because it will sap the younger generations’ rewards too much such that they won’t be incentivized. And this leads to the problems experienced by societies with flattening population histograms around the world.