Op-Ed: New York’s Dying Small Businesses Need Reform, Not Just Relief

Store Closing in College Point (Photo: QueensPost)

Feb. 15, 2021 Op-Ed By Council Member Jimmy Van Bramer

Long before COVID hit New York City, small businesses were struggling to compete against big box retailers with exorbitant commercial rents on the rise.

Before the pandemic, commercial rents had gone up by 22 percent on average. Vacant space had doubled in the decade leading up to the pandemic, and recent data show commercial vacancy is now up to its highest rate in two decades.

And it’s not just mom and pop stores; 1,000 chain stores having closed locations across the city. But for small businesses and the workers they employ, the picture is all the more bleak: Between March and August 2020, 2,800 small businesses in New York City permanently closed — which is higher than any other large American city, according to Yelp.

A total of 520,000 jobs were lost in the small business sector due to the pandemic. And according to the Partnership for New York City, roughly one-third of the 240,000 small businesses in New York City may never reopen.

It’s clear the pandemic exacerbated long-term trends and small businesses must be the focus of our economic recovery in New York City.

For one thing, investing in small businesses is a direct investment in our communities. Nearly half of New York’s small businesses are owned by immigrants, and those businesses contribute $195 billion to the bottom line.

The Trump administration was far too focused on delivering aid for big businesses and billionaires, even as some of the biggest companies have continued to lay off workers while turning a profit. But for every $100 spent at a small business, $68 goes back into the community. That’s much more than chain stores, which only recirculate about 13 percent of their revenue.

We need to attack this issue on multiple fronts: commercial rent control is key, to ensure that small businesses don’t get priced out.

Councilmember Jimmy Van Bramer (Photo: jimmyvanbramer.nyc)

It’s not a radical idea, as much as the real estate industry would like you to believe it is. It’s a tool the City has used in previous emergencies: New York City had commercial rent control during World War II and through the ‘60s.

Commercial tenants also need better protections from their landlords — prior to the pandemic, 38 percent of small business owners in Jackson Heights listed the length of their lease or losing their lease as a top concern. Immigrant owners are often faced with extortion by landlords when trying to resign their lease.

In the City Council, I sponsored both commercial rent control and the Small Business Jobs Survival Act, which would have created protections for commercial tenants, and the real estate industry fought tooth and nail to prevent both from becoming law. It’s high time to enact both these bills.

But we need to go beyond these proposals and provide direct relief as well. First, we need to cancel rent for small businesses which haven’t been able to operate during this time. And for businesses that have been able to operate, they should receive a break from paying their commercial rent tax if they can demonstrate hardship and commit to keeping specific employment levels.

New York’s small businesses can’t afford to continue waiting for the much-needed relief and reform they need. We need to act now, before we lose any more to the pandemic, not only because it’s just smart economics but because it’s about protecting the rich culture of our individual communities.

Council Member Jimmy Van Bramer represents District 26 in Western Queens and is running for Queens Borough President.