The biggest problem small business owners are facing is the unreasonable rent increases thus rent is the problem that I will focus on when it comes to trying to sustain small businesses. I think the best approach to sustain existing small businesses is some form of rent regulation of the small businesses. In the Global Cities, Local Streets: Orchard Street, New York video, it was mentioned that the rent prices had risen to $1,500-$2,500 a month for a small store. The Take Back NYC organization brings up a good idea on how to regulate the rent through the Small Business Jobs Survival Act (SBJSA). The purpose of the bill is to give tenants certain rights to protect them against landowners who raise the rent without consulting with the tenants. The bill includes a minimum of 10-year lease with the right to renew for the tenants, equal negotiation terms, and the prevention of landlords passing their property taxes on the small business owners. This bill will prevent the tenants from being forcefully displaced without a backup plan and prevent landowners from raising the rent anytime they want.
In the article, Small Business Survival: Tenants & Landlords Sound Off on Rent Escalation, it stated that the recent quarterly property taxes were $43,000. Property taxes have to be paid 4 times a year for properties with the assessed value of $250,000 or less. These property taxes are sometimes pushed to the small business owners for them to deal with even though property taxes are the landowners’ obligation, not the small business owners’. I think it is smart that the SBJSA included not only the lease issue tenants are facing but also the issue of landowners trying to push the property taxes onto the tenants.
Three questions I would like to ask in my interviews with three storeowners are:
1) How long have you rent this store and what was the rent when you first rented this store and the rent now?
I want to use this question to figure out the increase percentage of the rent, which will give a more direct sense on how much the rent had increased. For example, if the small business owner rented the store for 10 years (120 months) and the start rent was $800/month and the rent now is $2,000/month. I can use these numbers to figure out that there was a $1200 increase in rent over the 10 years, which is a $10 increase in rent every month.
2) How often do you communicate with the landowner?
I want to use this question to see if the tenants are often in contact with the landowners or not and if they only meet when the tenants have to pay the rent or for lease renewal (especially if the tenants and landowners speak different languages). The communication aspect can be useful in figuring out if when the tenants want to negotiate, how will they be able to do so.
3) Have the landowner ever try to push the property taxes onto you for you to handle?
I want to know through this question if any landowners had done that out of the different small business owners we will interview and if any landowners had also attempted to do so (to see if any trickery was involved during the contract negotiations).
Also, the chart from class
- Components VS Development
- Formation VS Culmination
- Construction VS Completion
Very good thinking, Jenny! I value your doing the reading and applying the ideas behind the proposed law to rents.