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Reason Foundation

How Cars Keep Manhattan Businesses Alive

Samuel Staley
October 6, 2010, 9:20am

The construction activity surrounding the 2nd Avenue subway project has had a much bigger negative impact on local businesses than anticipated. The dust, noise, and even underground explosions have discouraged patrons and disrupted traffic flows. As a result, local businesses report revenues down 25 percent to 30 percent according to the New York Times (October 4, 2010).

A couple of other items in the report, however, also caught my eye.

First, resident New Yorkers, local businessowners and real-estate agents say, typically don't walk more than a block or two to shop or dine. So, the traffic disruption has really created a physical barrier to patronage for small restaurants, coffee shops, dry cleaners, and other neighborhood services.

Second, most major thriving businesses depend on suburbanites who drive for large portions of their revenues. As the Times story notes:

"Even landmark businesses like the 74-year-old Heidelberg Restaurant and Dorrian’s Red Hand, a 50-year-old bar, are suffering because construction has gobbled up entire blocks of parking.

"Chris Cunningham, a manager of Schaller & Weber, the 73-year-old purveyor of bratwurst and other German specialties, said business was down 30 percent because customers who left Yorkville for the suburbs and who drove in could not double-park to pick up their bags.

"The construction has taken away at least one traffic lane along several long stretches where stations are planned, and chewed off five to seven feet of sidewalk in some spots. The work will not be finished until 2017, and many merchants said they doubted they could hold out."

Notably, these businesses depend on foot traffic and access by automobile. None of the business owners talked about direct benefits from the future subway line. This supports the idea that subways meet regional transporation needs, much like expressways, so their benefits to local businesses are likely to be narrow and very site specific.


Samuel Staley is Research Fellow


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