Small businesses played a crucial role in New York’s recovery, but the cost of rent is soaring.

In Yamuna Shrestha’s restaurant in Jackson Heights, Queens, a yak leather championship belt hangs on the wall. Shrestha has garnered a reputation for her delicious momos, a Nepalese dumpling filled with pillow-soft meat. Her restaurant has been voted the best in the district four times, but just before the pandemic began, her shop was over $150,000 in rent arrears. Business slowly recovered in 2020 after months of store closures due to COVID-19 restrictions. Today, Shrestha pays her landlord more than $13,300 a month while struggling to shed her debt, which is an 11% increase from 2019. She currently works 18-hour days but worries that the sharp rise in rents and lack of protection for commercial tenants could lead to the closure of her shop.

Three years after the pandemic flattened Manhattan’s office market and the commercial ecosystem it depends on, small businesses in other boroughs are seeing the biggest rent increases in the city. Facing Manhattan store rents are continually decreasing while small businesses in neighborhoods populated primarily by Blacks, Latinos, and Asians are struggling. The rise in rent is now threatening the existence of minorities and immigrants that make up the soul of the city. The strain on shopkeepers in these areas is due to a surge in new business applications. Notably, new business creation is primarily happening outside Manhattan, where commercial corridors are witnessing a faster resurgence than worker-dependent neighborhoods.

In an attempt to keep up with rising rent costs, store owners, particularly in immigrant communities, have monthly lease agreements. However, this move comes with significant risks, as it means that they have no right to renew their lease and are not protected from significant rent increases when their lease agreement ends. This trend has particularly hurt small businesses who were already struggling due to the disruption caused by the pandemic. While some store owners have applied for loans through the Small Business Administration to pay off their debts, a lack of proper documentation has left them unqualified for relief.

Despite the challenges, nonprofit community development organizations such as Chhaya and Association for Neighborhood Housing Development are committed to supporting small businesses. They offer commercial leasing assistance programs that provide free legal services to small businesses. Similarly, REMA 4 US, a group of Far Rockaway merchants, is working tirelessly to combat street closures and other setbacks that affect local businesses.

Clearly, the rise in rent costs is a significant concern for small businesses. While the city is experiencing a surge in new business applications, these rising rents threaten the existence of existing small businesses and the livelihoods of their owners. It is imperative that policymakers take steps to level the playing field by providing adequate support and protection to small business owners, particularly those in immigrant communities, who are the backbone of the city’s economy.

Leave a Reply