How can New York City hot dog vendors afford to pay half a million dollars in rent?

Answers to your questions about the news.
Aug. 12 2009 4:13 PM

The Half-Million-Dollar Wiener

How can New York City hot dog vendors afford a monthly rent of $53,558?

A hot dog vendor. Click image to expand.
A hot dog vendor

A hot dog vendor was kicked from the curb outside New York City's Metropolitan Museum of Art last week for failure to pay his monthly rent —of $53,558. Pasang Sherpa was under contract to pay the Parks Department $362,201 a year for a stand on the south side of the Met's entrance and $280,500 for another on the north side. That's a lot of hot dogs. With rent astronomically high, how much do New York City hot dog vendors actually make?

It's hard to say. Neither the Parks Department nor the Health Department (which oversees food sales outside parks) requires vendors to report income. They don't bother calculating expected sales, either—in part because rent is set at auction (with vendors battling it out) rather than by the city. What we do know is that even though Sherpa, a rookie, got in over his head, vendors have long been willing to pay hundreds of thousands of dollars to push $2 dogs outside the Met. (The museum attracts 5 million visitors a year, and the hot dog stands are the only food outlets for blocks.) Last year's occupant paid $415,000 a year for the Met stands plus at least $25,000 for supplies and labor, and didn't go under—so we can assume he brought in significantly more than $440,000.

Advertisement

Vendors on city streets (as opposed to outside park areas) don't have to pay rent for specific spots; their only real estate expense is the cart permit the city requires them to buy. Theoretically, that'll put you back just $200 a year. But since the city caps the number of food vendor permits at 3,100, far below demand, there's an extensive black market. Some companies buy up the permits for dozens of carts and then lease them to individual vendors at highly inflated prices.

Most food vendors outside the parks system don't see in a year the kind of money that Sherpa agreed to pay every month. According to street vendor advocacy groups, average vendors make $14,000 to $16,000 a year after they've paid for their (likely illegal) permits and received a few tickets. Vendors rack up thousands of dollars in fines every year. They can be fined anywhere from $250 to $1,000 for being parked on the wrong street, being stationed too far from the curb, setting up illegal cart "extensions" that increase their shelf space, or any number of other violations.

Unlike the Parks Department, the city doesn't regulate where vendors can set up shop, as long as they're on streets where vending is allowed. The vendors largely police themselves. New salespeople who encroach on an established colleague's territory will often get a verbal warning within 15 minutes of showing up at a new site. If the new guy doesn't take off, anything can happen. The police may be called, the new vendor may be physically threatened, or he may just find his tires slashed.

Explainer thanks the Street Vendors Project and Zach Brooks of midtownlunch.com. Thanks also to reader Christina J. Powell for asking the question.

TODAY IN SLATE

Foreigners

The World’s Politest Protesters

The Occupy Central demonstrators are courteous. That’s actually what makes them so dangerous.

The Religious Right Is Not Happy With Republicans  

The XX Factor
Oct. 1 2014 4:58 PM The Religious Right Is Not Happy With Republicans  

The Feds Have Declared War on Encryption—and the New Privacy Measures From Apple and Google

The One Fact About Ebola That Should Calm You

It spreads slowly.

These “Dark” Lego Masterpieces Are Delightful and Evocative

Crime

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

Politics

Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Activists Are Trying to Save an Iranian Woman Sentenced to Death for Killing Her Alleged Rapist

Piper Kerman on Why She Dressed Like a Hitchcock Heroine for Her Prison Sentencing

  News & Politics
Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
  Business
Moneybox
Oct. 1 2014 2:16 PM Wall Street Tackles Chat Services, Shies Away From Diversity Issues 
  Life
Outward
Oct. 1 2014 6:02 PM Facebook Relaxes Its “Real Name” Policy; Drag Queens Celebrate
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
  Arts
Brow Beat
Oct. 1 2014 9:39 PM Tom Cruise Dies Over and Over Again in This Edge of Tomorrow Supercut
  Technology
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Science
Oct. 1 2014 4:03 PM Does the Earth Really Have a “Hum”? Yes, but probably not the one you’re thinking.
  Sports
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?