As a small business owner, you manage and dictate all the moving parts that make up a viable, successful business.
Running a smooth operation requires that you have all your small business licenses and permits in place, a steady inflow of customers, happy employees to serve those customers, stable cash flow to keep those wheels turning, inventory stocked on the shelf…
The list goes on and on. But if there’s one building block that holds the whole operation together, it’s a place to do business in. Without it, your whole operation can crumble.
If you’re in a location where commercial real estate is abundant, you might take this business necessity for granted.
But if you’re one of the almost 200,000 small business owners packed into New York City, then you’re holding onto your commercial real estate lease for dear life.
Let’s outline the commercial real estate crisis New York City’s small businesses face—and how the Small Business Jobs Survival Act could fix it.
The Crisis New York City’s Small Business Owners Face
If you’ve walked the streets of New York City, you’ve felt the city’s small business charm first-hand.
From beloved restaurants in Nolita to eclectic vintage stores in the Lower East Side, every New York City neighborhood has a unique history defined by its small businesses.
But if you’ve visited New York City recently, then you also know how packed the city’s storefronts are.
With each square foot of commercial real estate being so valuable in a cramped city, the ball is fully in the landlords and financiers’ courts.
And with little negotiating power, the New York City small businesses we know and love are being squeezed out of their real estate—replaced by the highest bidder, big commercial chains, and mega-stores willing to pay more for a New York City lease.
When you look at the numbers, the commercial real estate crisis in New York is staggering:
- It’s estimated that between 1,000 to 1,200 small businesses lose their lease because of steep rent increases every month in New York City.
- The top reason given in the past 30 years for why established businesses (5 or more operating years) fail is the inability to renew a commercial lease.
- The top reason given in the past 30 years for why businesses lay off employees is the failure of the commercial lease renewal process.
You’ve heard it before: Small business is the backbone of the United States’ economy.
And small business is the backbone of New York City’s economy, with its 185,000 small businesses being the largest employer of Manhattan’s residents.
Something needs to be done about the commercial rent renewal process to save small businesses in New York and maintain the economic prosperity of its residents.
That’s where the Small Business Jobs Survival Act (SBJSA) comes in.
How SBJSA Will Save New York City’s Small Businesses
In 2009, a bill that would soon become the Small Business Jobs Survival Act was put before the New York City Council.
After being obstructed (in most part by a blockage from NYC’s Speaker Quinn) since its introduction, the SBJSA is back up for implementation in 2017.
The bill sets out to save small business by reforming the commercial lease renewal process.
The SBJSA would give commercial tenants the following three rights:
- A minimum 10-year lease with the right to renew, such that they can better plan for the future of their business.
- Equal negotiation terms upon lease renewal with recourse to binding arbitration by a third party if the landlord and tenant cannot find fair terms.
- Restrictions preventing landlords from passing their property taxes onto small business owners holding the lease.
In effect, the SBJSA will shield New York City’s small businesses from unreasonable rent hikes, give the stability of a long-term lease, end instances in which small business owners can’t even negotiate to renew their lease, and protect them from under-the-table cash extortion by landlords once leases are up for renewals.
The long-term goal of the SBJSA is to simply protect all of New York City’s small business owners and the residents they employ. This includes manufacturers, nonprofits, artists, retailers, doctors, and the likes.
What’s the State of the SBJSA Today?
Unlike the composition of the New York City Council in 2009—when the bill was proposed and immediately blocked—the NYC Council seats generally progressive councilmembers.
As such, 26 of the NYC Council’s members are ready to pass the bill. However, the SBJSA still faces opposition from the City Council leadership.
New York City elected officials are circling back to actions in 2009—proposing “band-aid” solutions to the commercial real estate problem instead of supporting the three main actions of the SBJSA.
For instance, NYC Council Members proposed tax cuts for small business owners in New York City. However, a spokesperson for TakeBackNYC, an organization supporting the SBJSA, argues that tax cuts aren’t any good for a business owner who doesn’t have a lease.
How to Support the SBJSA
The SBJSA is in committee right now. To come to a vote, the SBJSA needs 26 supporters.
If you support New York City’s small businesses and care about the SBJSA passing, there are many ways to make your voice heard.
There are a few different petitions being passed around, including this one from Change.org, organized by TakeBackNYC.
And if you really want to go above and beyond, call your Council Member and let them know how you feel about the SBJSA!
The post How to Solve NYC’s Small Business Crisis: Support The SBJSA appeared first on Fundera Ledger.
from Fundera Ledger https://www.fundera.com/blog/how-to-solve-nycs-small-business-crisis-support-the-sbjsa