John Surico is a freelance journalist and researcher who covers New York City transit for VICE and frequently contributes to the New York Times. He is based in Queens, NY.
A first-of-its-kind law will give the city data on small businesses fleeing the city as retail rents skyrocket. But skeptics fear that won’t be enough.
By now, it is well-known that New York City has a big vacancy problem.
A study released in May by the city’s own Department of Small Business Services (SBS) found that the average rate of empty storefronts citywide is 8.9 percent; other numbers indicate that at least 20 percent of spaces in Manhattan are vacant or about to be, with higher figures on particular avenues. In some parts of town, such as Greenwich Village or the Upper East Side, the hollowing-out of the retail landscape seems far more severe. Longtime institutions are being gobbled up by condos or chain outlets like Starbucks and Duane Reade drugstores. (One recent loss: Moishe’s Bake Shop on 2nd Avenue.) Vacancy now seems like a part of the cityscape itself, a fixture of New York’s curious existence as a booming “rich ghost town”: Walk down practically any traffic- and pedestrian-jammed commercial corridor and a “For Rent” sign awaits.
Yet the true extent of this vacancy problem has been a matter of some dispute: Some say it’s skewed anecdotally, and in an economically healthy city, not as high as 20 percent.
Going forward, the city will have a more precise accounting: In late July, the New York City Council passed Intro 1472, otherwise known as the “storefront tracker” bill. The first of its kind in the country, it will require all commercial storefront and second floor spaces citywide to register, creating essentially a vacancy database of Gotham. Once public, supporters say this will help city officials better understand where vacancies lie, and what areas are most at risk. And, hopefully, push them to do more to stop the exodus.
The bill was part of a package to address struggling small businesses, signifying the council’s latest intervention to provide some sort of legislative response to the retail collapse of America’s largest and richest city. The other bills included categorization for “microbusinesses” (businesses with no more than nine employees), training for small business owners in the age of Amazon, better guidance of city permits, and strengthened data collection. Mayor Bill de Blasio is expected to allow the bills be approved into law.
Whether these regulations can turn back the tide of retail closures is less clear, skeptics say. Small business advocates argue that the problem stems from skyrocketing rents, little commercial lease protection, and the disruptive ascent of online retail. The real estate industry blames city bureaucracy and lack of training for small businesses to compete. Having data to better establish what’s really going on is crucial; it’s less clear what to do to fix it.
Thus far, the city’s efforts to save embattled small businesses have have been limited, and less than effective. SBS sends out “Chamber-On-the-Go,” a mobile unit that visits small businesses in need. It also dedicates resources to upskilling and now provides free legal services for storekeepers in dispute with landlords. In 2017, the Council passed a commercial rent tax relief bill.
But the most high-profile attempt to stanch the retail bleeding has undoubtedly been the Small Business Jobs Survival Act (SBJSA), which would provide the equivalent of commercial rent control for small businesses. The effort to pass this legislation has been a decade-spanning saga that remains unfinished. Back in October, the bill was introduced in the council for the 12th time since 1986, as I reported. Gregg Bishop, the SBS commissioner, argued then that the bill would worsen the situation for business owners by favoring wealthy landlords in any arbitration proceedings; he instead floated support for a vacancy registry, and tax. Although Speaker Corey Johnson, a potential mayoral candidate for 2021, called for the bill’s hearing, he was hesitant about its classifications, and the body has largely been mum about its future.
The small business community, meanwhile, is getting increasingly frustrated. “The proverbial village is burning down, and instead of passing legislation to save what is still standing, City Hall wants to create a database to register the ashes,” Kirsten Theodos, a co-founder of TakeBack NYC, a small business advocacy coalition that has pushed SBJSA to the forefront, told me over email.
Theodos said that the five bills passed in July were not a “substitute” for SBJSA. “None of them seriously address the small business crisis, and would not save a single business or job. What good is any legislation if the business closes?” She also took aim at the package’s relatively swift passage, in less than four months: “It has been eight months since the hearing on SBJSA.”
The bill’s biggest opponent, by far, has been the highly influential Real Estate Board of New York City (REBNY), whose supporters wore blue hats reading “Vote NO Commercial Rent Control” to October’s hearing. Made up of real estate brokers, landlords, and developers, the industry group repeatedly testifies that the SBJSA would place an undue burden on landlords—especially for those who own mixed-use buildings—by making it more difficult to sign new tenants.
Yet the lobbying organization was less forthright after the passage of July’s package. “We hope any legislation put forward by the City Council will be legal, based upon data and not anecdotes,” a spokesperson said at the hearing.
The storefront tracker bill enjoyed a wealth of support from food truck groups, block associations, and artists. According to its description, occupancy data will be dissected by council and census districts, and include information on rent, lease duration, rentable floor area, and the properties that are due to expire in the next two years. Owners will have to submit the data next year alongside their annual income and expense statements to the city’s Department of Finance.
“We have witnessed the loss of far too many small businesses in the last several years, leaving only empty storefronts behind. Losing this economic ladder limits opportunity, and contributes to New York City’s growing economic inequality,” said Councilwoman Helen Rosenthal, the bill’s sponsor, in a statement. “The information gathered through my Storefront Tracker legislation will be essential for solutions to help keep small businesses in our communities."
Outside of city government, such a database could be a boon for researchers and urban planners, who will soon be able to correlate neighborhood vacancy with factors like nearby transit to detect patterns or phenomena. And given what data has already been able to do for small business advocates in painting a vivid-yet-grim picture of modern-day urban capitalism to the public, that might not be a bad thing, at least for organizing purposes.
Next up—crunching the numbers.
“The City Council’s bill is the first step in better understanding the reality of small-business closures in New York City,” said Matt Murphy, the executive director of the NYU Furman Center, which studies the city’s housing and economy, in a statement to CityLab. “The challenge now is to collect timely and reliable data, and to conduct the kind of rigorous analysis necessary for an effective policy response.”