Testimony to the NYC City Council Committee on Small Business Combatting Commercial Vacancies

Thank you to Chair Menin and the members of the committee for the opportunity to testify today. My name is Emily Goldstein, and I’m the Director of Organizing and Advocacy at the Association for Neighborhood and Housing Development (ANHD). ANHD is one of the City’s leading policy, advocacy, and capacity-building organizations. Our membership consists of over 80 neighborhood-based and city-wide nonprofits that have affordable housing or equitable economic development as a key part of their mission. We work with our  members to build community power and ensure the right to affordable housing and thriving, equitable neighborhoods for all New Yorkers. 

ANHD is also a member of United for Small Business NYC, which is a coalition of community organizations across New York City fighting to protect New York’s small businesses and commercial tenants from the threat of displacement, with particular focus on owner-operated, low-income, people of color-run businesses that serve low-income communities and communities of color. 

Small businesses are the backbone of our city’s neighborhoods. Even before the COVID-19 pandemic, many small businesses were facing displacement pressure from rising rents. And of course pandemic shutdowns caused a severe crisis for countless small businesses throughout the city, as they lost months of revenue but still had to pay rent on their spaces. In New York City, the soaring cost of commercial rents have stayed on trend with pre-pandemic rents, and individual landlord negotiations are not enough to keep small businesses alive. 

New York City’s small businesses need legislation that addresses rising rents and resulting commercial vacancies. Rising rents in gentrifying communities are leading to the displacement of small businesses, nonprofits, artists, and others who rent storefront spaces. Meanwhile, the pandemic has made it more likely that rent increases will lead to shuttered storefronts. Small businesses are being hit with rent increases they can’t afford, which effectively function as evictions to make way for higher-paying commercial tenants or lead to commercial vacancies. 

Last year, the NYC Department of Finance published the first round of annual data in the storefront registry, as required by Local Law 157, which ANHD and USBnyc worked with the council to win. The data available thus far provides a snapshot of the state of NYC’s storefronts just before the pandemic. According to ANHD’s analysis of the 2019 data, the city’s highest vacancy rates were in Central Brooklyn Council Districts 35 and 36, which include the gentrifying, majority-Black neighborhoods of Fort Greene, Clinton Hill, Bedford-Stuyvesant, Prospect Heights, and Crown Heights. These neighborhoods had a vacancy rate of 15.6% (CD 35) and 14.2% (CD 36) as compared to 8.3% citywide. In addition, there were higher median rents in gentrifying districts like the South Asian and Latinx immigrant enclave of Jackson Heights in CD 25 ($5.00/sf as compared to the Queens-wide median of $3.67/sf). This is an example of a neighborhood where we expect to see higher rates of displacement as commercial leases expire and speculative landlords look to take advantage of the post-pandemic commercial real estate market. 

1. Supplemental registration statements and the dataset for ground floor or second floor commercial premises, Intro 383

The passage of Local Law 157 of 2019, which established a publicly available storefront registry with median rents, lease terms, and vacancies of commercial spaces, was a major victory for anti-displacement organizing. Published yearly by the Department of Finance, this data gives policymakers and advocates the necessary information to create meaningful protections for New York’s commercial tenants while holding landlords accountable for failing to register. Intro 383 makes fixes to the timing of registration requirements that are key to making sure that the data in the registry is accurate and consistent. We commend Councilmember Gale Brewer for her leadership on this issue.

2. Creating a One-Stop Shop NYC Business Portal, Intro 116

Small business owners frequently have difficulty navigating the paperwork and processes required to set up and maintain a small business in NYC. The creation of a “One-Stop Shop NYC Business Portal” could help remove barriers to access and make those processes substantially easier for small business owners. Small business owners whose first language is not English face particular hurdles - in order to achieve the goals of this legislation, it is important to prioritize language access in the portal and in all of the services that it links small business owners to, above and beyond the basic language access requirements already required by law. We also recommend that the portal include information on commercial tenants’ rights under the Commercial Tenant Harassment Law, and information on how to access services and support from community-based organizations, such as legal assistance through the Commercial Lease Assistance Program, and help from Industrial Business Service Providers, in addition to those services provided directly by city agencies. 

We appreciate the Council focusing attention on the issue of commercial vacancies, and we hope to continue working with you to preserve and rebuild the stability of the small businesses that serve our communities.