Leaders at the city and state levels say they’re prepared to address the closure of mom-and-pop shops, but some key hurdles may stand in the way.
For the past few months, New York City has been caught in a debate over what might seem like a simple question: How many vacant storefronts are there across the city?
The answer is harder to find than you might expect. The debate kicked off with an eye-popping statistic reported in The New York Times that 20 percent of Manhattan’s retail space is vacant, followed by a convincing account of why that figure is probably wrong. And while there’s an abundance of more conservative estimates (the City Council puts Manhattan at closer to 4 percent overall), the fact is that New York retail vacancies aren’t tracked in a comprehensive way.
Still, the vacancy estimates are high, and you’d be hard pressed to find optimism regarding the landscape for mom-and-pop shops. Officials including Manhattan Borough President Gale Brewer have found it necessary to try to help “storefronters,” as she calls the small businesses that have been pressured for years by the steady rise of rents and a turbulent retail sector. A study that her office led last year found 200 empty storefronts on Broadway alone. The Atlantic’s Derek Thompson dubbed Manhattan a “rich ghost town,” reflecting the contradictions in a market that has plenty of wealthy people but can’t sustain its businesses. But for local business advocates who have lamented the steady closure of familiar shops, the last few weeks have brought a slight shift in political currents that might lend cause for hope.
In late October, the City Council finally heard debate over a decades-stalled bill that activists have rallied around as the best chance to save small businesses from rising rents. Two weeks later, the midterm elections gave Democrats full control of the state legislature for the first time in a decade, and brought suggestions that they’re preparing to tackle some key city issues—including rent regulation—that upstate Republican lawmakers have long opposed. In both cases, there were signs that the state’s powerful real estate lobby is losing some of its influence among state and local politicians.
At the city level, it’s the Small Business Jobs Survival Act (SBJSA) that has signaled the most chance for action. The bill calls for commercial tenants in good standing to be given certain rights when renewing their leases. The bill was first introduced in 1986 and modernized in 2008. Interest in it has waxed and waned, but it has failed to move at the City Council. That changed on October 22, when City Council Speaker Corey Johnson opened the first hearing on the bill since 2009. “I can’t imagine a New York without its mom-and-pop shops, and I don’t want to,” he said. Without intervention, “we will lose the vibrancy of our neighborhoods, and New York begins to look more and more like any other city.”
With that sentiment—and his public mourning over the news that a favorite restaurant, Tortilla Flats, was about to close due to a rent dispute—Johnson publicly joined many of his constituents and other New Yorkers who have long bemoaned the state of small business.
Since the hearing, however, there’s been little word from Johnson about next steps. “The Speaker is committed to working through the complicated facets of this issue to pass meaningful legislation to help small businesses,” a spokesman said, though there is no timetable. The silence has bothered Kirsten Theodos, an SBJSA activist and co-founder of Take Back NYC. “Every day that goes by that we don’t get an update, my optimism changes a little bit,” Theodos said. Also of concern to activists is the fact that Mayor Bill de Blasio doesn’t back the bill.
But in the upcoming Democratic-led State Assembly and Senate, liberal efforts to reform the real estate industry may move ahead. Democratic state Senator Brad Hoylman, who testified in favor of the SBJSA, told CityLab that “it’s time for Albany to take a harder look at creative ways to keep small business afloat.”
Hoylman says he’s “exploring a number of bills” that could ease small businesses’ burdens, such as instituting a vacancy tax on landlords, or creating a legacy business registry program, as San Francisco has. “We know that the Republicans have been captured by a number of special interests over the decades,” he said. With Democrats in charge, he said, “I think the sigh of relief is coming from tenants, whether commercial or residential, that their issues may finally be addressed in the Senate.”
The city doesn’t have solid data on the exact number of small businesses in New York City, or on the rate of turnover. The bill’s advocates claim that over 1,000 small businesses lose their leases every month, and that those spaces too often become chain stores, or simply remain empty. The need to gather that data was one area of consensus revealed by the city’s hearing on SBJSA—and just this week, Council’s Committee on Small Business discussed a bill to do so. Chairman Mark Gjonaj’s bill would define a “microbusiness” as one with nine or fewer employees, and require Small Business Services to count and report the number of active microbusinesses to the council and on its website. As the saying goes, you can’t manage what you can’t measure, so measurement of small shops would likely begin quickly.
Small-business advocates have been working to create an atmosphere in which lawmakers would support legislation for small businesses, in opposition to the preferences of the influential real estate lobby, the Real Estate Board of New York (REBNY). They showed their strength nine days before the SBJSA’s hearing, when the community group Human-Scale NYC brought together dozens of grassroots groups for a massive noontime rally on a Saturday at City Hall. Whether speaking in support of the SBJSA, or about a host of other local concerns, the common call in this “Rally for Our Neighborhoods” was the demand for residents’ input on land use to truly count in city process. (Critics have long said that the city’s elaborate but “advisory” Community Board structure enables little actual impact by participants, while the ULURP system for land-use decision-making is a poor substitute for true city planning.)
Indeed, it seems that some of REBNY’s tactics to oppose SBJSA were received differently this time. As expected, during the hearing, REBNY President John Banks maintained the group’s opposition to the bill, as well as its stance that legislation would cause more problems than it would solve. It was more of a surprise, however, that dozens of SBJSA opponents also chose to wear blue baseball caps inscribed “Vote No Commercial Rent Control,” which rubbed some attendees and councilmembers the wrong way, first because it labels the bill as rent control, but also because of the Trumpian connotations of groups of people wearing identical primary-colored caps.
And a relatively new group, Stop REBNY Bullies, is helping to publicize the recently spreading phenomenon whereby more NYC candidates for every level of office are renouncing the real estate industry and its campaign contributions. David Eisenbach, for example, a candidate for public advocate, calls Mayor Bill de Blasio “the Manchurian candidate of the real estate industry.” In the last round of council elections, many candidates for Manhattan’s District 4, to take just one example, expressly supported the SBJSA, and made a point of telling voters they were not taking contributions from the real estate industry.
Moreover, late in the hearing a real estate broker spoke out against REBNY, a rare event. In the eighth hour of testimony, Christian Emanuel—who like all brokers, is required to belong to REBNY—told those left in the room about his parents, who ran an insurance brokerage in Long Island City for 30 years, until they were evicted from the Queens Plaza Clock Tower.
“Today’s an important day, because members of the City Council can start to think about who they really serve. Are we here for REBNY? Because sometimes, in New York state, it seems that way. And I’m a REBNY member. I pay dues for that sort of display. And it sort of disgusts me,” Emanuel said, referring to the blue hats. “Or are we here for the people, for the city of New York, for the small business owners—upstairs, downstairs, storefront, immigrant, third generation—are we here for them? That’s a decision that needs to be made in City Council.”
For its part, following the hearing, REBNY reiterated its rejection of SBJSA, re-posting Banks’s testimony as a column on its website. The group has had little to say about the change in state legislative power, either. All eyes are on what the Senate will do with the “LLC loophole,” which allows real estate and other industries to donate to political campaigns beyond standard campaign-finance limits.
While some SBJSA supporters fear any change to the bill, its best-known advocate takes an optimistic long-range view. Griffin Hansbury, who testified at the hearing and wrote the book Vanishing New York under his pen name Jeremiah Moss, says that residents “are often not aware that there are policy solutions like the SBJSA—and that New Yorkers, as active citizens, can fight for it.”
“I do believe that healthy change happens incrementally and that this hearing is an indication of a progressive change that’s been building for some time,” Hansbury said. “Whatever the outcome… I believe that positive actions like this have a ripple effect. We don’t often know where the ripples go, but I have faith that they are movement creating more movement.”