Tag Archives: small business

New Program Begins Shifting Power Back to Commercial Tenants

Today, community groups, legal service providers, and the Department of Small Business Services (SBS) launched the Commercial Lease Assistance Program, a new effort to address the power imbalance between commercial tenants and the landlords who exploit them by providing small businesses with legal services on leasing. The new program serves as a crucial extension of the policy advanced by United for Small Business NYC (USBNYC), the Commercial Tenant Anti-Harassment Law. USBNYC members Brooklyn Legal Services Corporation A, Chhaya CDC, Cooper Square Committee, Cypress Hills Development Corporation, Northwest Bronx Community and Clergy Coalition (NWBCCC), Urban Justice Center, and Volunteers of Legal Service will work alongside African Communities Together and Pan-African Community Development Initiative to connect small business owners with legal service providers who can inform them of their rights.

Small businesses are a central component to New York City’s economic and cultural vitality. However, they have historically lacked the protections needed to protect them from unscrupulous landlords. Working with Councilmember Robert Cornegy, United for Small Business NYC members successfully ensured the passage of the Commercial Tenant Anti-Harassment Law in 2016. While the law, the first of its kind in the nation, defined commercial tenant harassment and established a private right of action for commercial tenants experiencing harassment, it lacked funding for legal services to educate and inform business owners of their rights.

At a time when our neighborhood small businesses are rapidly being displaced, providing legal services is crucial to empowering them against displacement pressures. USBNYC members recognize that small business displacement is cultural displacement, and the new Commercial Lease Assistance Program provides needed resources to empower small businesses to fight back.

 

Armando Moritz-Chapelliquen, ANHD’s Campaign Coordinator for Equitable Economic Development

Gentrification Has Always Been About More Than Housing

 

New York is experiencing growing pains. It’s quickly changing and neighborhoods with strong identities and histories are melding into the same glass-towered landscape that reigns throughout the City, rendering them unrecognizable. In last week’s New York Times Magazine, Willy Staley explores the impact of gentrification beyond the ongoing and pressing conversation about its impact on housing affordability.

Gentrification is not just limited to housing or small business loss, it marks the loss of the culture of a neighborhood, one created through community networks.

New York City is succumbing to massive wealth, an influx of capital that reshapes our poor and working class neighborhoods. As small businesses fall victim to commercial warehousing, a lack of access to financing, and their customer base disappearing, the community response has begun to shift toward a more holistic anti-displacement movement.

As part of this movement, communities recognize that it’s not just their housing that’s threatened; it’s the culture that New Yorkers have created for their city that is slowly disappearing. It is the connections neighbors make on the street, at barbershops and salons, in bodegas and grocery stores, in restaurants and with vendors on the street. This is a moment where previously disparate threads running through the conversation about community development are at an intersection.

As organizers, advocates, and New Yorkers, there is a collective recognition that protecting small businesses is part of a larger community development vision that protects the souls of neighborhoods. It is all the parts – the small businesses, culture, arts, infrastructure, public spaces, and the housing – that make streets, a block, and blocks a community.

When media boast headlines like ‘There’s Never Been a Better Time to Open Retail Stores in NYC’, they are inadvertently pointing to what happens when neighborhood small business displacement creates a glut of vacant commercial storefronts. When Karla and James Murray or Jeremiah Moss profile the loss of neighborhood businesses, they are pointing to how these forces are prioritizing capital over culture. When the New York City Council releases a report highlighting a multitude of recommendations on how to preserve small businesses on the same day they host a hearing on rampant commercial vacancies, it clear that our elected officials are attempting to address a crisis that has devastated our communities.

The effort to combat commercial and cultural displacement will be led by those most impacted by the crisis. The fight to save beloved the Washington Heights institution, Coogan’s or the backlash around vending machine concept [Bro]dega demonstrate that people who love New York City’s small businesses, who love the part of community culture they provide, are stepping forward and making their voices heard.

An impactful and effective response to the displacement crisis will take work. As Staley notes, “Befriending your bodega guy is a great thing to do, but it’s of limited assistance when the landlord triples his rent.” Being an ally to commercial tenants means supporting advocacy and organizing that empowers small businesses to decide their own future and fight against their displacement. It means developing tools and protections to address the power imbalance between commercial landlords and tenants. It means calling on those in power to enact the changes necessary to protect these vital community assets.

In short, it will take a movement.

 

 

Lena Afridi, ANHD’s Policy Coordinator for Equitable Economic Development

Armando Moritz-Chapelliquen, ANHD’s Campaign Coordinator for Equitable Economic Development

Council Small Business Report Includes Key Provisions of USBNYC Platform

The Association for Neighborhood & Housing Development (ANHD) and United for Small Business NYC (USBNYC) applaud City Council on the release of their 2017 report, Planning for Retail Diversity: Supporting NYC’s Neighborhood Businesses. The report provides a timely and broad analysis of issues faced by independent retailers across the five boroughs and offers a robust template of policy solutions and recommendations to address these problems. It is the first time the Administration has provided a detailed platform to address the crisis of retail displacement in New York City, an ongoing issue that impacts small businesses and commercial corridors citywide.

USBNYC is pleased that Council supports several of the Coalition’s platform priorities and recommendations, including:

• The development of a commercial development fund,
• The designation of meaningful enforcement responsibilities to the Department of Small Business Services (SBS),
• An increase in access to small business data,
• And the implementation of a count of vacant commercial properties as part of citywide Community Development Needs Assessments.

We hope that in 2018, Council takes the necessary steps to implement these recommendations through enforceable and robust legislation.

The displacement of neighborhood institutions not only threatens New York’s identity, but it also eliminates jobs, community spaces, and affordable resources in low- and moderate-income communities of color. As the city’s small businesses disappear at an alarming rate, it is vital to implement robust protections to ensure their survival, and in turn ensure the vitality and vibrancy of New York’s neighborhoods. We look forward to working with the Council to implement these recommendations and stem the continuing loss of small businesses in our communities.

 

 

 

 

Lena Afridi, ANHD’s Policy Coordinator for Economic Development

It’s that time of year again, with late November bringing the start of the most lucrative time of year for many businesses of all sizes. In an effort to bring some of these economic windfalls to local communities and main streets, Small Business Saturday has become a national phenomenon. As New York’s small businesses face increased displacement pressures, it’s a good time to look at what small businesses mean for New York City’s economy and how this varies citywide.

The Association for Neighborhood & Housing Development (ANHD) analyzed the economic vitality of small businesses across the city, neighborhood by neighborhood. For this analysis, ANHD defines small businesses as firms with 20 or fewer employees. According to US Census data, about 26% percent of all New York City jobs are in firms with 20 or fewer employees. The share of small businesses in a neighborhood varies widely.

In addition to analyzing census data, ANHD used New York City Department of Consumer Affairs (DCA) license expiration data to track how many total businesses have expired licenses, in effect going permanently out of business, over the period of 2011 through 2016. This data excludes restaurants and grocery stores and does not make the distinction between a small business and a large one. However, it gives an idea of trends in economic growth by neighborhood.

Using the same DCA data, net percent change in businesses across the City was calculated, which takes into account new licenses, or new businesses that replaced permanently shuttered shops. Overall, New York City saw a 2% rise in total business creation over the past five years. This means that there were slightly more businesses in the City in 2016 than there were in 2011. While the outer boroughs all saw a net increase in businesses, Manhattan experienced a 2% net loss. Queens and Staten Island saw the most net growth, with a 4% and 5% rise in businesses overall, while total businesses in Brooklyn and the Bronx grew by 1% and 2%, respectively.

Despite net business growth in the outer boroughs, small business lending is deeply stratified. Almost half of all small business loans made in New York City were made in Manhattan. Brooklyn, Queens, and Staten Island received fairly comparable shares of loans at 18%, 15%, and 14% respectively. The Bronx, however, lagged much further behind, with Bronx businesses receiving only 5% of all the small business loans made in the City.

This is especially concerning since so many jobs in New York are within firms of 20 employees or less. 20% of jobs in the Bronx are at small businesses, while 19% of Manhattan jobs are at small firms. 28% of jobs in Queens and 31% of all Staten Island and Brooklyn jobs are located within firms with 20 employees or fewer.

 The lack of small business loans in these neighborhoods means a lack of small business jobs, which are sorely needed in communities with among the highest rates of unemployment in the city. Small business loans must be made accessible to all of New York’s communities- not just its wealthiest.

The displacement of neighborhood businesses not only threatens New York’s identity, but also eliminates jobs, community spaces, and affordable resources in low- and moderate-income communities of color. As the city’s long time small businesses are being replaced with vacant storefronts at an alarming rate, it is vital to implement robust protections to ensure their survival, and in turn ensure the vitality and vibrancy of New York’s neighborhoods. Stay tuned until next week for ANHD’s in-depth neighborhood by neighborhood analysis of the state of New York City’s small businesses, along with strategies to ensure their survival.

 

 

Lena Afridi, ANHD’s Policy Coordinator for Equitable Economic Development

Bodegas, Not Brodegas #StopBrodega

The recently reported business idea for Bodega (hereafter referred to as Brodega), a glorified vending machine aiming to replace the venerable New York institution, is not a bodega at all; it’s an engine for displacing hardworking business owners.

The awful irony of naming the company “Bodega” after the very brick and mortar institutions they aim to displace, to say nothing about the cat their logo is based on that will similarly be displaced, is offensive, utterly misguided, and frankly disrespectful to New Yorkers. But when the young, white founder is asked whether he’s worried  the name Bodega might come off as culturally insensitive he says, “I’m not particularly concerned about it…We did surveys in the Latin American community.” Ignoring the fact that there is no such thing as a singular, “Latin American community,” it’s still an outrageous and revealing comment.

One can’t help but keep asking, Why? Why would you want to make bodegas a thing of the past? Why would you want to eliminate one of the pillars of New York City life? The existing landscape for small businesses is difficult enough as it is. In the same neighborhoods where Brodega hopes to cash in on the popularity of and need for actual bodegas, small business owners already lack basic rights and protections, making them susceptible to rising displacement pressures.

As New York State Coalition of Hispanic Chamber of Commerce Chairman Frank Garcia said, “Real bodegas are all about human relationships within a community.” Despite their extensive demographic and market research, the creators missed a crucial fact about New York City: you can mess with a lot here, but you can’t mess with our bodegas.

It’s true that Brodega is convenient. It’s a convenient way to ignore rampant displacement caused by luxury developments. It’s a convenient way to slip blinders on and avoid New York’s worsening inequality crisis and its disappearing small businesses. And it’s a nice and easy way for rich tech bros to avoid interaction with the plebes and communities of color that are quickly – but apparently not quickly enough – disappearing from the City’s boundaries.

Brodega allows the new city dweller to automate and sanitize urban life, to live in the City without actually participating in its civic and cultural life aside from contributing to its disappearance. Never mind the lives of the immigrant and refugee service workers behind the counter who work 80 hour weeks, who brew the City’s morning cup of coffee and wrap up our life-sustaining egg and cheese on a roll. Or the lives of the young parents who rely on the bodega because the owners give them food on credit when they can’t afford it, or the senior citizens who use the space as a community center and act as a de facto neighborhood watch. There’s little need for such a community safety net when that community ceases to exist.

New Yorkers know the difference between a vending machine and the real thing. The bodega is part of New York’s culture. Trying to replace the bodega with a glorified vending machine is like trying to replace the Empire State building with a low-rise strip mall.

We should be looking at ways to sustain and strengthen our bodegas and small businesses, not developing ways of getting rid of them. Why? Because communities are not just where people sleep and get their mail. They are where people live. Bodegas and small businesses are such a crucial part of the urban experience that you’d be hard pressed to find a New Yorker who hasn’t stopped in for a sandwich, milk, or conversation with the business owners who are just as part of the neighborhood as the people who live there. They are a crucial part of life in this City. Their owners and workers are our neighbors and our fellow New Yorkers.

When small businesses, especially bodegas, are displaced, New York’s culture is displaced. And we (and our bodega cats) won’t stand for that.

 

Lena Afridi, Policy Coordinator for Equitable Economic Development

Armando Moritz-Chapelliquen, Campaign Coordinator for Equitable Economic Development

 

Better Small Business Lending Requires Better Data

Stories and studies have long demonstrated disparities in small business lending, particularly for minority- and women-owned businesses, but we lack the data to quantify these disparities and hold lenders accountable. Small business data must be made public.

New York City is home to 1.12 million businesses, 95% of which have fewer than 10 employees; in fact, over 883,000 have no employees and are operated solely by the owner. As of 2012, 39% were women-owned businesses and 51% minority-owned.  Additionally, 48% of New York City small businesses are immigrant-owned, and in some neighborhoods, small businesses employ up to 42% of the neighborhood population. Yet, we know virtually nothing about their ability to access financing to start, maintain, and grow their businesses.

Access to capital is critical for these small businesses to grow, yet they continue to face barriers in accessing financing from traditional banks. As a result, they are often forced to borrow from friends and family; use personal savings; defer investment; or turn to less-regulated, higher cost, sometimes predatory online lenders.

For decades, the Home Mortgage Disclosure Act (HMDA) has helped reveal disparities and identify credit needs in residential home lending to low-income and minority people and communities. Unfortunately, we do not have a similar set of data for small business lending. Currently, only large banks are required to report small business lending, and the data they report is extremely limited, with little information about the size of the business and no other important details, such as the demographics of the owners, types and costs of loans, or denial rates. And small banks and non-banks don’t report at all. Section 1071 of Dodd Frank was designed to address this – to provide the public with a wide range of small business lending data, including business size, owner demographics, types of loans, and approval rates. Yet, before it has even gone into effect, lenders are opposing it. We urge the CFPB and Congress to ensure that the small business reporting mandated by Section 1071 is fully implemented. 

In lieu of comprehensive data, we now rely upon surveys and stories that document the disparities and the need for better data. None of these provide lender details. For years now, a set of Federal Reserve Boards has been conducting a study of small business credit needs to identify trends and barriers to financing. Not surprisingly, approval rates are lower for smaller businesses. In 2016, 60% of small businesses with revenue under $1 million were approved for loans and lines of credit at small banks and 45% at large banks, versus 78% and 72%, respectively, for large businesses. They also highlight the challenges businesses face in accessing financing from the online lenders. Small businesses were much more likely to use these lenders and all businesses reported them to be higher cost and less transparent than banks and CDFIs. Another study about the online lending market found that the average alternative loan carried an annual percentage rate (APR) of 94%. Among Hispanic borrowers, they found that their average monthly payment was more than 400% of their take-home pay. Section 1071 is a critical tool to expose the details of their lending, which is now completely hidden.

Several other studies have documented the challenges small businesses, particularly those that are women-owned and minority-owned, face in accessing credit. One study showed that just 5% of women-owned businesses use bank loans to start their businesses compared to 11% of male-owned businesses. If minorities owned businesses at the same rate as non-minorities, our country would have 1 million additional businesses and more than 9.5 million additional jobs.

ANHD members who work with small businesses tell similar stories of borrowers – particularly immigrant owned businesses and minority- and women-owned businesses – who struggle to access financing to start, maintain, and grow their businesses.

Without good data, we cannot effectively document disparities in the lending market or hold lenders accountable for disparate lending.  Without good data, we cannot identify unmet credit needs.  Comprehensive data such as the data collected under 1071 is essential to increasing access to credit for small businesses, particularly those in lower-income tracts and owned by lower-income people, people of color, and immigrants.

 

The CFPB is collecting comments on 1071 through September 14th.We must tell show our support! Contact ANHD if you’d like sample comments you can submit – it’s simple, fast, and important.

 

 

Jaime Weisberg, ANHD’s Senior Campaign Analyst