‘Street vendors and brick-and-mortars are struggling for many of the same reasons… Lifting the cap on permits for street vendors and ending the exploitative underground market is a key part of a larger toolkit to protect all vulnerable small businesses.’
The very heart and soul of New York City is at stake. Small businesses are the backbone of our neighborhoods. Our communities rely on them for information as well as places to connect with neighbors. But right now, brick-and-mortar stores and street vendors alike are seeing a catastrophic drop in income, from 50 to 100 percent in some instances.
In January, the New York City Council took a major step towards creating an equitable system for all small businesses. Intro 1116-B was passed, issuing new mobile food vending permits for the first time since they were capped in 1983, and putting an end to the exploitative underground market, offering meaningful relief during a time when our small businesses need government support to recover from the COVID-19 recession.
There are a lot of myths being circulated about this bill, and today we’re setting them straight while highlighting the critical needs of the city’s small business ecosystem.
A Diverse Small Business Ecosystem
The recent success of the outdoor dining and open streets initiatives reveals that pedestrians have a preference for city streets activated with people and business offerings. Vibrant commercial corridors in Corona, Queens, consist of a variety of ethnic stores, restaurants, and street vendors that all contribute to the commercial landscape, as evidenced by a survey of over 500 small businesses. Vendors draw people to the streets and sidewalks and encourage customers to spend more time there, which translates into more business for all.
The Jackson Heights Commercial District Needs Assessment (CDNA), released in January 2020, is another study that captures brick-and-mortar and street vendor economic activity in a single corridor. The study revealed that the top three challenges faced by vendors are lack of licenses and permits, fines and tickets, and sanitation— issues that are finally on their way to resolution thanks to Intro 1116-B. Among the surveyed brick-and-mortar merchants, their top three challenges were commercial rent and lease, lack of parking, and property taxes, while 22 percent identified lease support as a need. These pre-pandemic concerns have been exacerbated and need immediate attention.
In fact, there is no evidence that street vendors harm or meaningfully compete with other small businesses. “I think that in a variety of areas, businesses see visible targets, and they focus their policy efforts on their visible targets,” said Nicholas Freudenberg, director of CUNY’s Urban Food Policy Institute in a recent interview with Gothamist. Vendors are not only integral to the local economy, but that they even help to bring more business to brick-and-mortar stores.
Historically, Vendors Help Foot Traffic
As historian Suzanne Wasserman documented, merchants in the Lower East Side banded together in 1929 to lobby against street vendors. By 1940, however, “the East Side business community, which had fought for ten years to remove the pushcarts, now complained that their removal irreparably damaged their trade.” The stores “had severely miscalculated the extent to which their business depended upon that of the pushcarts outside their doors,” wrote Wasserman.
City Limits documented a similar experience on Brooklyn’s Fulton Street after the vendors there were removed in 2001. Brick-and-mortar businesses claimed that, without the vendors, their sales declined by 20 percent. In addition to drawing customers, and contributing to a vibrant street life, the vendors served a public safety function. “If somebody was in trouble, they’d be the first ones there—even before the cops,” said one merchant.
Out of the Shadows
Street vending has been a platform for New Yorkers to survive and thrive in our city for centuries. Vendors are essential workers who ensure our hard-hit neighborhoods have access to fresh, affordable food, especially during the COVID-19 pandemic. Annually, street vendors generate an estimated $71.2 million in local, state, and federal taxes, and contribute nearly $293 million to the city’s economy.
The 1983 cap of 3,000 citywide street vendor permits manufactured a shortage that gave rise to an underground market whereby permits were illegally leased for upwards of $25,000 per permit cycle. Those who were unable to pay the steep price were forced to vend without a permit, risking heavy fines, property confiscation, and the threat of arrest.
A total of 34 City Council members voted in favor of Intro 1116-B, which rolls out structured reform to New York City’s street vending system while prioritizing centralized oversight. The first step begins 90 days after Intro 1116-B becomes law with a Street Vendor Advisory Board including vendors, grocery store owners, property owners, and others in the small business community. Together they will review all current vending laws, which has never been done before.
Intro 1116-B consolidates the many vending laws scattered in the administrative code into a dedicated civilian Street Vendor Enforcement Unit which will have authority to enforce vending regulations, and must be instituted before Sept. 1, 2021. In addition to regulating compliance, the unit will focus on creating educational programs for vendors. The Department of Health will continue to enforce Health Code regulations, since food vendors are required to follow the same food safety regulations as restaurants.
Within 10 years, the underground market that steals tens of thousands of dollars from hard-working New Yorkers will be entirely phased out. Intro 1116-B creates a new system of “supervisory licenses” which are connected to an individual, rather than the cart or truck. The supervisory license holder must be present at all times the cart or truck is in operation.
Beginning July 2022, nearly 10 months after the enforcement unit has been instituted, the city will issue the first 400 new “supervisory licenses” per year, and will do so each year for a total of 4,000 over the course of 10 years. Each year, 100 supervisory licenses will be available citywide, serving all boroughs including Manhattan, while 300 supervisory licenses will be for Bronx, Brooklyn, Staten Island, and Queens only, though they are not designated for specific outer boroughs. All existing and new food vendors will continue to follow the same food safety regulations as restaurants, plus the myriad placement restrictions that ensure proper street vendor-siting.
The new licenses will be distributed to vendors via a priority system based on the Health Department’s waiting list (which was closed in 2007). First are currently licensed vendors on the waiting list, followed by individuals on the list regardless of their current status as licensed food vendors. Finally, the Health Department will open the waiting list to all vendors who have been licensed (and therefore most likely working) since 2017. This process will ensure these new opportunities prioritize those who have been waiting for more than a decade, as well as those who have been vending under this unjust system.
Another important component of Intro 1116-B is the opportunities it creates for Military Veterans and Disabled Individuals to become vendors. The bill designates 45 citywide supervisory licenses released per year specifically for veterans and disabled persons starting July 2022.
Intro 1116-B recognizes the important part vendors play in the vibrancy and cultural diversity in our streets by legalizing many vendors that are already operating.
Brick-and-Mortars Need Relief Now
A successful small business ecosystem and a healthy commercial corridor has both thriving vendors and brick-and-mortar stores. For this to be a reality, in addition to Intro 1116-B, brick-and-mortar small businesses need comprehensive relief, without incurring further debt.
Brick-and-mortars have been devastated by having to continue to pay rent during state-mandated closures. Federal and city loan and grant programs have struggled to reach these businesses. Even efforts to remedy this have not accounted for immigrant small business owners who may have limited comfort with English language or technology. Additionally, programs supporting brick-and-mortars to make revenue have been piecemeal. The personal care industry, car repair shops, and laundromats have not benefited from outdoor dining, indoor dining, open retail or open culture.
The economic injustices of 2020 will be felt for years to come. This extraordinary time calls for New Yorkers to unite and fight for our city’s survival and repair long broken systems. The following efforts can bring us one step closer preserving our neighborhoods:
- Ensure commercial rent relief is included in the State budget and pass A3190/S3349 because commercial tenants cannot be expected to pay the same rent at a time when there is no revenue—it must be a shared responsibility.
- Restore and expand funding for the Commercial Lease Assistance program. This small program has been carrying the weight of assisting with commercial rent negotiations for small businesses who are unable to afford an attorney.
- Pass Commercial Rent Stabilization in the city for a long-term solution to the rent crisis commercial tenants face.
- Pass S6817A in the state legislature to lift the cap on vendor permits and licenses, ending the forced cap on entrepreneurship.
Street vendors and brick-and-mortars are struggling for many of the same reasons: lack of foot traffic, gentrification, and an economy that prioritizes corporate interests over community needs. Lifting the cap on permits for street vendors and ending the exploitative underground market is a key part of a larger toolkit to protect all vulnerable small businesses, and we must continue to push for commercial rent relief and reforms that protect all small businesses.
Carina Kaufman-Gutierrez is deputy director of the Street Vendor Project at the Urban Justice Center. Shrima Pandey is the small business program manager at Chhaya Community Development Corporation.
Read more on this topic:
Opinion: City’s Plan to Expand Street Vendor Permits Must Protect Our Brick-and-Mortars, Too