Rising rents in New York City are now not only affecting residential parts of various neighborhoods, but it is also affecting small businesses that are important to the history and character of New York. When property tax rates increase for landlords, they tend to place this burden mainly on the shoulders of small business owners who rent their spaces, resulting in tremendous rent increases when the tenants leases expire. For many small business owners, this eliminates any and all profit to the point where they are unable to support their business and are required to close down the business that they may have spent almost their entire lives nourishing. The SBJSA or the Small Business Jobs Survival Act is aiming to help long time businesses survive by giving rights of renewal to the business tenant when their lease expires and it “levels the playing field” for landlords and business owners by giving the tenants the same rights as landlords in negotiating fair lease terms. The act also says that if the two parties cannot agree, the matter goes to a procedure of arbitration in which a dispute is submitted to an arbitrator who make a binding decision on the dispute. I think that this plan is effective in allowing for more control to be given to small business owners over their rent regulations and the process of arbitration would provide for more fair grounds in the event that the landlords and renters cannot come to any sort of agreement. I think that another thing that should be targeted is the tax incentive that landlords have for refusing to renew leases and having empty space. These landlords are able to use the spaces left empty after a business closes down as a tax write off, and so they’d rather have the business close down. Something should be done to lower or completely diminish this ability of landlords to benefit off of having empty space present on their properties.
Three Questions:
Are a majority of your customers locals, or are they from outside of the neighborhood?
Has the rate of increase in rent been affecting your business profits, or the ability for your business to survive? Have you had to cut back on certain portions of your business in order to make ends meet?
How do you handle big chain brands that move into the neighborhood? Do you employ any tactics to keep customers coming to your store?
Good questions, Diana. You have a good grasp of the economic competition facing small business owners.