It's Time for Action on Small Business
What is it going to take to finally get people to pay attention to the small business crisis in New York City?
It began as a drip of closings a few years ago, as rents for mom and pop companies came up for renewal. Dozens of them were forced to close their doors because they couldn't afford the exorbitant rent increases demanded by their landlords.
Neighbors bemoaned the loss of beloved local institutions, the culture of our neighborhoods began to change.
As rents in the city have continued to soar, that drip has since become a torrent. As many as 1,000 small businesses a month now close their doors in New York, according to an estimate by the Small Business Congress.
And in some neighborhoods, the affect has been profound. A sense of history of the area has been lost. Quintessential New York characters are gone. The richness and variety that brought many of us to New York in the first place have been gutted.
In their place, more often than not: chain stories and luxury retailers, among the few prospects that can afford the rents as they now stand.
There are two ways to look at this crisis: The first is to say that New York has always been thus, that ours is a constantly molting, ever-evolving place, and that the only thing constant is the blinding pace of change.
That may be true, but it doesn't account for the number of businesses opened 20, 30, 40 years ago that finally are being forced to surrender now, in 2014.
The second response is to put what's happening in the context of a broader narrative about the city, which has in the past decade become one of the most expensive places on earth to work and live ? a gathering place for international investors and those few souls on the lucky side of our great income divide.
That may be true, too, but that doesn't make it something we have to accept without protest.
For most of the past year, this newspaper has been working to highlight the problem. We began by devoting increasing space and energy to stories about the issue, all running under the banner "Saving Small Business." Many of those individual stories are catalogued in the pages that follow, in our tally of closed businesses called "What We've Lost."
In addition, in late September, we convened business people, elected officials, and other concerned New Yorkers to talk about where we are and what can be done about. (A report on that forum, at CUNY's Baruch School of Public Affairs, follows this editorial.)
We wish we could say that a single answer for solving the crisis emerged from those discussions. If only it were that easy. A few important insights, though, did become clear:
First, Albany is not going to help us. Raising the flag for some ailing businesses in Manhattan does not attract much sympathy in our state capital. Whatever solutions we come up with will have to be our own.
Second, this is not solely a Manhattan problem. Gale Brewer, the tireless Manhattan Borough President, who has probably devoted more time to these issues than anyone else, said there still is a sense on the City Council that these are problems limited to a few wealthy zip codes in Manhattan. As a result, political consensus has been difficult. Those outer-borough political leaders are fooling themselves; what's happening in Manhattan is headed their way, and fast.
Third, our populist mayor desperately needs to engage this issue, just as he has addressed, quite effectively, the shortage of affordable housing in the city. One proposal that has been floated is to require developers to set aside a percentage of their new development for affordable local retail, just as they now set aside 20 percent of their residential units for affordable housing. Bill de Blasio needs to join this discussion.
Finally, we need to stop tip-toeing around the fact that the real estate industry is going to have to participate in the debate. Of course, landlords are entitled to earn a decent return, even a great one, on their investment in Manhattan real estate. But they have to be willing to see the issue in a broader context: if Manhattan's neighbors are stripped of their magic and character, ultimately fewer people are going to want to live in them. What happens to rents then?
An important test case of this entire issue will be unfolding in coming months on the Upper East Side. For years now, many businesses along Second Avenue have suffered through the construction of the subway there, a messy and loud public-works project that has severely hurt their business. Landlords have been unable to raise rents because no tenants would take on the headache of moving in.
Now, with part of the construction finally ending, many of those businesses are facing lease renewals, and many of them expect to be priced out. Having held out this long, they could be forced to close just as business is finally bouncing back.
Brewer, unable to rally support on the Council for an initiative to help the Second Avenue businesses, plans to take it upon herself to try and help these businesses, hoping to mediate decent leases between business and landlord. It's a heroic effort, and it needs the backing of her colleagues on the council.
London, for one, has experimented with a city-backed mediation service to help tenants and landlords come to a solution that works for both. Maybe that could work here, as well.
We've got to start somewhere. The current, and only bill, addressing this crisis is currently sitting before the City Council -- back again five years after it was first proposed. Few people are optimistic it's going to go anywhere.
Enough dithering. Again, we ask: What is it going to take to finally get people to pay attention to the small business crisis in New York City?
Email us your thoughts at email@example.com.
-- The Editors ------
[Putting Heads Together to Save Small Business]