New York City has changed and small businesses have suffered

(This post originally appeared on The Guardian)

Take a walk around the streets of Manhattan and you’ll notice something: there seems to be fewer small businesses around than ever before. Most of the storefronts that were for decades occupied by small-time merchants – assemblers, dressmakers and jewelers – are now taken up by nationally known brands such as Starbucks, Jamba Juice, Pret a Manger, Walgreens and other big companies.

Where did all the small businesses go? And does it really matter? To some, it does.

“Psychologists and neuroscientists who study the streets have shown that the monotony of chain stores makes people depressed,” said Jeremiah Moss a licensed clinical social worker psychoanalyst and small-business person. “Senior citizens age faster when they live on blocks with chains instead of small businesses. A diversity of stable mom and pops both improves and extends our lives. But that diversity is being destroyed by unregulated greed. The city’s small business crisis could also be considered a public health crisis.”

Moss is also the author of Vanishing New York, a book about how New York is “losing its soul”. He shared his concerns in front of a New York City Council meeting this past week where a not-so-new bill, called the Small Business Jobs Survival Act was being debated.

According to the Gothamist, the decades-old bill, which last had a hearing about nine years ago, was resurrected by Ydanis Rodriguez (D-Manhattan) and 22 other councilmembers. It would require landlords to give their commercial tenants 180-day notice about their intentions to renew their lease and a “legally valid reason” if they couldn’t. If not provided, tenants would be allowed to renew their existing leases for another ten years or go to arbitration.

It’s meant to protect the small business owner. Not surprisingly, landlords are not happy.

“The market is working,” Steve Soutendijk, a retail broker with Cushman & Wakefield said in the Gothamist report. “It’s imperative we let the forces of supply and demand do their job.”

“Big rents translate into tax dollars,” said Joanne Podell, the firm’s executive vice chair. “Self-regulation can be painful, but it really works.”

Even supporters of the bill admit there are flaws. A city official thinks that relying on arbitration would put a strain on resources and give wealthier landlords the upper-hand. He also believes that the bill’s regulations would make landlords less likely to offer leases to new businesses. Others feel that the bill, as currently written, would apply to all commercial tenants – even large ones like McDonald’s and Goldman Sachs and therefore put landlords at a significant disadvantage. Both the mayor’s office and the New York City bar liken it to rent control.

More importantly, no one really seems to know how many of New York’s estimated 230,000 small businesses would actually benefit. “We don’t have good information. And there is a proposal to legislate in a data vacuum,” said John H Banks, president of the Real Estate Board of New York, in the hearing. He argued, according to Bedford+Bowery, that the decision should be made “based on fact and data, not anecdote”.

People are upset because so many small businesses seem to be closing. Taxes, subsidies and other support programs were suggested at the hearing. But is this problem being blown out of proportion?

I’m a small-business advocate. I get that there are a lot fewer independent shops, restaurants and owner-managed firms in New York City today than, say, 60 years ago. But I’m also realist. And the reality is: it’s not 1958.

People are not complaining. In New York, there are thousands of restaurants and stores – both independently and corporate owned – providing better quality products, faster services and at a lower cost than ever before in American history.

The smart shop owners have moved online and the best entrepreneurs are building things out of their homes, writing code, blogging, marketing, designing, analyzing, contracting, sharing workspaces, driving cars and opening up their townhouses and apartments to fee-paying visitors. Many more are freelancers, independents and franchisees who depend on those big chains for their livelihoods. Maybe leasing space is better left to those who really need to do it. In today’s economy, many startups have realized that having a landlord is more of a hindrance than a benefit.

New York City has changed. America has changed. Some small businesses have suffered because of it. But many others have prospered. Maybe instead of governments dusting off old bills to prop up a dying breed of proprietors, more should be invested in infrastructure and services that will support our future generations of entrepreneurs.