At one intersection in Williamsburg, an empty storefront sits next to a busy coffee shop. It has been vacant for over a year. Last summer, I met the woman who operated the laundromat that once occupied that space.
“She says that she has a lease,” my colleague translated for me from Korean, as the woman handed me several pages of legal-sized paper. Before even looking at the document, I knew that it was likely meaningless.
From our earlier conversations, I knew that this business owner’s initial lease term had ended years ago without being renewed in writing. The landlord had assured her that she could remain in the space month-to-month, but she hadn’t understood that this meant her lease expired and her tenancy could be terminated at any time.
By the time she was meeting with me, the landlord had prevailed in summary proceedings against her, and she had been served with a notice of eviction. The most that I could do was buy her extra time to sell her machines, return clothing to customers and remove her personal belongings from the space. She is a single woman and immigrant, and she had operated her laundromat, her sole source of income, on that same corner for 17 years. When you pass the former laundromat today, “For Lease” signs are displayed in the window.
Empty storefronts are now a familiar part of the New York City landscape. According to a recent report from City Controller Scott Stringer, the citywide retail vacancy rate has increased substantially to 5.8% in the last decade, with the highest numbers seen in outer-borough neighborhoods. The same report shows that reported vacant retail space roughly doubled, rising to 11.8 million square feet in 2017.
Burdened by rising rents and property taxes, more retail tenants have found it impossible to live the American dream of owning their own business. Advocates suspect that landlords are warehousing empty retail spaces, in anticipation of being able to raise rents in the future significantly.
For many New Yorkers, empty commercial strips indicate the loss of community and local culture. Small businesses are neighborhood anchors, providing goods and services that keep the city vibrant and diverse. However, there is currently no data available to analyze this trend.
In July, the City Council passed two bills that direct the city to finally take a look at vacancies and require assessments to analyze the business environments of each district and consider factors, like the number of vacant spaces and how much rent is being charged, to begin compiling usable data.
As an attorney for small business owners, I see clients like the laundromat owner every week. My office assists small business tenants with lease matters, including new leases and renewals, and disputes with their commercial landlords. In FY2019, our clients were 61% immigrants, 53% female, and 80% people of color. Many have operated their businesses in the city for decades, while others are native New Yorkers who are looking to open new businesses in the neighborhoods where they grew up.
Currently, there is a lack of meaningful legal protections for small business owners. Certain protections can be negotiated into a lease, but not everyone has a written lease or access to an attorney — and there are limits to what a lawyer can do.
Landlords have been operating with the same landlord-friendly forms for decades and the balance of power continues to lean in their favor. Even with a lease, there is no statutory right to a lease renewal and no commercial rent control. There is no penalty for leaving storefronts vacant.
The bills passed in July will allow us to gain a deeper understanding of commercial displacement and the people it affects. They can help identify the neighborhoods most plagued by vacancies, as well as provide demographic insight into the communities most impacted. Finally, we will be able to compare rent amounts across the city and give a voice to small business owners who have suffered from rent hikes and landlord harassment.
The data should be used not only to confirm the vacancy epidemic but to find solutions to protect small business tenants.
New York’s small business owners are as diverse as the city they serve, and they are our neighbors. Vacancies and rising commercial rents affect all of our neighborhoods, and they also impact the lives of the individuals behind the storefronts.
Rauer is a senior staff attorney on the Community and Economic Development Project at Brooklyn Legal Services Corporation A.