COVID Recovery ∙ Economy ∙ Small Business
Relief for Our Small Businesses
“I have run a small business in New York City myself - they are the source of most jobs and activity in every neighborhood. I will be committed to getting small businesses reopened and back on their feet. They are vital to the city on multiple levels.”
Few groups have been hit harder by COVID than New York’s small businesses. Small business revenue nationwide is still down 32% versus March. In New York City, that number is 53%. The most important thing for small businesses is getting New York vaccinated so we can start to put the virus behind us and resume normal life. During a weekday, Manhattan’s population swells from 1.6 million people to 4 million as commuters and tourists flood the city. We need those other 2.4 million people back.
As we open back up, we need to do everything we can to help our small businesses make it through the end of this brutal period and get back up on their feet.
Save 15,000 small businesses in 2022.
The Yang administration will appoint a head of small business support and recovery so that there is a single responsible party and point of contact for small business owners to help them in their recovery efforts. The appointee will serve as a small business czar to coordinate all efforts across several different offices (Department of Consumer Affairs, Small Business Services, and Office of MWBE) to ensure that the City’s bureaucracy is not getting in the way of small businesses opening, while also providing advice on regulations and how to bid on government contracts. The goal will be to hold each department accountable to reach the goal of opening, preserving, and reopening 15,000 small businesses and to reach out to businesses to understand what they think should be done to make operating in New York easier. This czar will also be in charge of overseeing the implementation of the CURE (Collaborative Uniform Repair Enforcement) initiative (mentioned below).
Reduce red tape and end enforcement of curable violations.
We will enact a one year moratorium on fines with a focus on curing violations. After Covid, there will be a tremendous need to help businesses get up to code, especially in complying with new standards on outdoor dining. These businesses will also need to address violations that might have accumulated during the pandemic. The City Council passed an Amnesty Program to help businesses deal with violations, but this program expired in February 2020.
DCA already identifies some fines that can be curable. We will build on this by creating a multi-agency organization to support businesses and conduct educational inspections (including, but not limited to: DOB, FDNY, DCA, MOME, DOHMH, DEP) and shift from a focus on Multi-Agency (MARCH) Raids to a focus on CURE (Collaborative Uniform Repair Enforcement).
Pass the Small Business Jobs Survival Act.
The bill has been around for over a decade, but its salience only continues to grow. Already, a majority of Council members support the bill, and the time is ripe to pass it. It protects small business owners during lease renegotiations so that landlords can’t hold them hostage for higher rents from others or for a piece of the business that the owners grew. By providing small business owners with the right to a 10-year renewal, these entrepreneurs will be able to have much-needed stability and needed foresight to trust that NYC is a worthwhile investment and a sound value proposition.
Push NYS for a Vacancy Tax.
There are too many open storefronts in NYC. A Yang administration would advocate New York State for a vacancy tax, determining an amount of time for which a storefront can be vacant, after which the landlord must pay a tax to the state as a penalty. This will create an incentive for them not to leave retail spaces empty in the hopes of waiting for a tenant who will pay higher rent. The money could also go towards minority- and women-owned enterprise development. In 2020, San Francisco passed a vacancy tax with 70% of the vote and the Council passed a bill requiring the city to build a database of vacancies.
Create a permanent low- or no-interest loan program.
NYC recently launched some programs doing this, but they’re limited in scope. Through the People’s Bank of NYC, low- or no-interest loans could be offered to small businesses that meet certain criteria. Public Advocate Jumaane Williams has proposed a program for small businesses, nonprofits, and freelancers hit by the pandemic. COVID has created a cash crunch that could force many small businesses to close. We can help relieve that.
Renew licenses and permits without fee or application.
We should strive to make licensing and permitting painless. We can make the Open Storefronts program (allowing ground-floor businesses to conduct business/retail on outdoor areas) permanent. We can automatically renew sidewalk café licenses for licensees that have been previously approved. This will help small businesses while creating a unique feel for each neighborhood.
Despite the city’s diversity, NYC has a long history of failing to contract with MWBEs. The pandemic has had a disproportionate impact on MWBEs, with Black-owned businesses seeing more than twice the closure rate of white-owned ones. We should make it easier for MWBEs to get government contracts by overhauling the certification process for MWBEs; breaking up bigger contracts into smaller, more manageable chunks; targeting a doubling of procurement awards to MWBEs by 2025 (current level is at 4.9%); and appointing a former MWBE owner as next head of the MWBE Office.
Foster a solidarity economy and support worker cooperatives.
We should expand on the Worker Cooperative Business Development Initiative (WCBDI) and Employee Ownership NYC by developing specific resources for how businesses can transition to a more online-based economy (i.e., e-commerce and ghost kitchens). We can facilitate co-op incubators and trainings in each borough by supporting organizations such as the Green Worker Cooperatives in the Bronx and help groups connect with vacant office, retail and manufacturing space as needed.
Extend the cap on food delivery services.
Food delivery apps have traditionally taken upwards of 30% of an order - that’s money taken away from a local, small business and going straight to another state. As restaurants are forced to shift their business to online ordering, this fee is killing their bottom lines and making it more difficult for them to operate. The City Council passed a bill limiting the fee to 20% (15% commission and 5% of other fees) until 90 days after the resumption of indoor dining. This should be extended even after that time, as restaurants typically have margins in the 10% range and these fees were already unmanageable.
Reduce the audit burden on non-profits and guarantee registered contracts and payments within 30 days.
85% of NY non-profits say COVID has had a significant impact on their operations. A 2018 study found significant delays in non-profits’ contracts getting registered with the city. In 2017, the delays caused an overall burden of nearly $700 million. That’s unacceptable and we will guarantee payment within 30 days. The City will pay its partners, vendors, and suppliers promptly. It is better situated to handle cash flow issues than its vendors are. A Yang Administration will forgive missed performance metrics through 2022 and can revise contracts thereafter.
Create local business spending vouchers.
This year, some countries began distributing consumption coupons, a type of voucher via e-payment to stimulate local spending. The requirements usually include a minimum spend and are often targeted at restaurants, supermarkets and other outlets hit hard by the pandemic. The system varied by city. One model saw the local government releasing five rounds of electronic consumer coupons valid for seven days before expiring. All residents were eligible for one coupon packet per week valued at ~$7, distributed through five separate vouchers. We should create a voucher program of our own, subsidizing discounts for purchases at local establishments - use your vouchers and get a certain percent off your purchases from local businesses.
Allow for land swaps and pop-ups throughout a neighborhood.
Small businesses and restaurants that had the desire and resources to move out into the public realm this summer were often prevented from doing so by things like fire hydrants or bus stops in front of their location. By looking at the neighborhood scale for land swap opportunities, restaurants could move into or in front of the vacancy next door or nearby.
Crowdsource donations for small businesses (based on London’s Pay it Forward).
NYC should have a consolidated app for many reasons, but one is to allow for crowdsourcing for NYC small businesses with matching donations. This could focus on coops, bars and restaurants, allowing them to keep themselves afloat until they’re free to fully open again. Londoners raised £1.5 million to support hundreds of businesses through a similar program, and there’s no reason NYC can’t do the same.
Adopt Akron’s points system for shopping locally.
Akron and the local technology community built an app that allows users to earn points by shopping locally. Points are redeemable for discounts at area businesses. App downloads are double what was anticipated according to city officials. This type of hyperlocal economy can allow small businesses unique to New York to compete with national chains by creating financial benefits to buying locally.
Partner with the People’s Bank of New York, philanthropy and other financial institutions to help provide funds to businesses that are trying to reopen.
New York’s top philanthropies and financial institutions should allocate more resources and a larger proportion of their endowments to local causes. Big banks should be a partner with the People’s Bank and give out low-interest loans to businesses struggling to survive. They should also invest in neighborhoods traditionally overlooked. And local tech firms can donate their time to build out the NYC App that will allow for our own Akron- or London-style system to be built. And, lastly, large landlords should provide space for pop-ups and temporary programming to support the arts and fashion. It’s time to use the government to create these unique partnerships between businesses, individuals, and communities in order to rebuild this City.
Support Cinch Market and other local e-commerce efforts to compete with Amazon.
A new company is bringing together local businesses in Brooklyn to offer a Prime-like delivery service. We can offer to directly invest in this company or in others looking to expand to the other boroughs. Similarly, we can help set up a local app for restaurants to take orders, or to create a centralized directory of local businesses. This could also provide jobs, as delivery workers could be hired at a livable wage through this service with almost no delivery fees incurred by the restaurants.
Buy regulated hardware - such as outdoor heaters - in bulk, and then sell them to local businesses.
There has been a lot of confusion about which heaters to buy, and the market in general has been tight. Many restaurants also couldn’t afford the unexpected expense. By buying complying heaters, or other hardware that is subject to City regulations, in bulk and providing them at cost to restaurants, NYC can help these small businesses expand their offerings. DC spent $4 million on a program like this (grants to businesses to winterize rather than bulk purchasing) to great effect.
New York’s small businesses have been through a lot, but we’re going to need them more than ever as our city reopens. It soon will be time to shop again, to eat together again, and to celebrate our entrepreneurs who make this City run.