CityViews: Tackling Vacancy is Key to Saving NYC’s Small Business

Every New Yorker sees it as they walk down the street: the small businesses that help define our neighborhoods are being pushed out due to rising rents and landlord harassment. Between the moment a small business is displaced and the moment it is replaced by another pharmacy or bank, there is a problem spreading to neighborhoods across the city: chronic commercial vacancy. In the absence of rights and protections, a landlord can harass a commercial tenant out of a lease or displace them by demanding exorbitant rents, usually in the hopes of bringing in a more lucrative chain store. In communities across the city, “For Rent” signs serve as a lasting reminder that there is no penalty in place for property owners who intentionally leave spaces vacant in the hopes of attracting a higher-paying tenant without considering the impact it has on the community.

Beyond just providing products and services, communities are built at our small businesses. The bodega that lets a neighbor float on credit until their next paycheck is more than just a small business; it’s an institution that ensures residents feel valued in their neighborhood. As a global city, immigrants in New York City own almost half of all small businesses, demonstrating the role small business has historically played in the economic fortunes of New York. Beyond economic displacement, small business displacement is cultural displacement. Where we once may have seen a small business as a hub of community life, a vacant storefront represents a spot where a piece of a community has died.

Momentum is building to tackle this crisis, yet the real estate industry is doing everything in their power to prevent policy that would meaningfully address the loss of small businesses from moving forward. Between opinion pieces and industry numbers that suggest the small business displacement crisis is not as bad as some are saying it is, it’s clear any effort to reform the small business landscape will be met with heavy opposition. While REBNY argues there is no silver bullet to the current situation, this does not mean we should be resigned to the current landscape of small business loss across the city. Enacting a penalty on long-term commercial vacancies is necessary to a comprehensive strategy to preserve our neighborhood small businesses.

However, not everyone sees it this way. The same greed that motivates landlords to displace small businesses allows landlords to make a gamble: sit on a vacant property, eat the immediate loss in rent, and wait for a higher paying tenant – like a corporate chain – to come around and make up the loss in higher rents. This speculative mindset is best captured by a global real estate developer and investor focusing on properties in the West Village who told the Wall Street Journal, “There’s a lot of vacancy, and we love that.”

Granted, not all landlords think like this developer, especially landlords with actual ties to the communities they operate in. However, there must be a mechanism to hold unscrupulous landlords, those who view rampant vacancy as a great way to make a buck, accountable.

We are at a pivotal moment to advance real policy solutions for small businesses. The previous City Council passed the first-of-its-kind Commercial Tenant Harassment Law, while the Department of Small Business Services (SBS) introduced free legal services to small business owners looking to get a lease or handle issues of landlord harassment. Mayor Bill de Blasio, SBS Commissioner Gregg Bishop, Speaker Corey Johnson, and numerous members of the City Council have indicated support for a penalty on landlords who keep spaces vacant for extended periods of time.

Whether you are a small business owner, a New Yorker who cares about their community, or part of city government, now is not the time to be swayed by arguments that belittle or deny the prevalence of commercial vacancies across the city; now is the time for action.

Local studies on commercial vacancy, most notably Manhattan Borough President Gale Brewer’s study of commercial vacancy along Broadway; State Senator Brad Hoylman’s Bleaker on Bleecker report; and crowd-sourced VacantNY, which allows people to manually update a database of vacant storefronts in Manhattan; demonstrate the interest in gathering the necessary data to inform policy. However, even with these studies, we need publicly accessible citywide data and research to reveal the citywide commercial vacancy rate, the average length of time a commercial space stays vacant, and why spaces stay vacant.

At the same time, we cannot simply collect data without holding anyone accountable. Without this piece, we run the long-term risk of having better data while also already having lost the neighborhood small businesses that are struggling now. The city must adopt a penalty on commercial vacancies to hold unscrupulous landlords accountable, stop the spreading of vacant storefronts across the city, and discourage further displacement of neighborhood small businesses.

Armando Moritz-Chapelliquen is the Campaign Coordinator for Equitable Economic Development at the Association for Neighborhood & Housing Development (ANHD). He coordinates United for Small Business NYC, a citywide coalition of community organizations across New York City fighting to protect New York’s small businesses and non-residential tenants from the threat of displacement, with a particular focus on owner-operated, low-income, minority-run businesses that serve low-income and minority communities.