SMALL BUSINESS DISPLACEMENT: THE DISAPPEARING NEW YORK CITY BODEGA AND THE NEED FOR COMMERCIAL RENT CONTROL

April 20, 2017

On February 2, 2017 1,000 locally owned businesses across the city closed their doors in protest of the anti-Muslim executive order on immigration. Dubbed the Bodega Strike, and organized by Yemeni-American business owners, the action brought to the forefront the humble neighborhood institution that plays a major role in the lives of many New Yorkers and the struggles to protect it.

 

As gentrification ramps up, the bodega is a disappearing institution, often replaced by a chain store, bank or upscale supermarket. The word is a nod to the influence of Puerto Rican Spanish on the lexicon of the city. At its best, it is part of the network of local institutions and businesses, idealized by Jane Jacobs in The Death and Life of Great American Cities, that contribute to neighborhood cohesion and collective identity formation. These include laundromats, cafes, restaurants, day care centers, gyms, small arts nonprofits, community centers, theaters, beauty parlors, bookstores and faith-based institutions. While the sidewalk ballet that takes part in and around neighborhood hubs is not always graceful, or unilaterally positive, it is an integral part of everyday life in the city.

 

Local neighborhood institutions like Newkirk Gourmet Deli in Flatbush and Here's a Bookstore in Midwood are not known beyond their immediate surroundings, but still help residents feel grounded in their neighborhood. Without a citywide strategy that addresses the displacement of local neighborhood businesses and institutions, targets rising land costs and focuses on the commercial lease negotiation process, neighborhood hubs will continue to face a consistent spatial challenge to stability.  

 

 

THE RENT SQUEEZE

 

The perennial question many New Yorkers ask themselves is, “which of my favorite local institutions will close next?” Just in 2016, 69 Bayard in Chinatown, the Stage Restaurant in the East Village, and dozens of others shut their doors because of increasing rents.

 

Rising commercial rents are a byproduct of gentrification, which, as defined by geographer Jason Hackworth, leads to the production of urban space for progressively wealthier, and often whiter, users. In some cases, it is motivated by individual market-driven decisions, like when a landlord in Washington Heights plans to evict a whole block of Latino businesses. Other times, it is driven by city policy. For example, the redevelopment of Fulton Mall–a thriving African-American and Caribbean commercial district– was part of a broader effort to rezone downtown Brooklyn by the administration of Mayor Michael Bloomberg (as brilliantly documented by Kelly Anderson and Allison Lirish Dean in My Brooklyn). Seemingly neutral individual or policy decisions about real estate cannot be separated from race, because land use policy has been one of the most insidious tools for enforcing segregation. While housing has been the primary site for the implementation and maintenance of racial and class lines – from an individual homeowner’s decision not to sell to a Black family to redlining – the replacement of neighborhood hubs that play a role in forming neighborhood-based identities, like a Black-owned hair salon or a Chinese restaurant, are important in signaling the transition of a neighborhood. Today, communities continue to learn from the downtown Brooklyn rezoning, one out of 120, that took place under the Bloomberg administration, which – as argued by editors Sylvia Morse and Tom Angotti in Zoned Out! – have had a disproportionately negative impact on communities of color.

 

 

COMMUNITY STRATEGIES TO PROTECT LOCALLY-OWNED BUSINESSES

 

One way communities have responded to 12 planned rezonings under the administration of the current mayor Bill de Blasio is to use them as an opportunity to put forward their own neighborhoods’ visions. In East New York (Brooklyn), the only rezoning fully approved so far, community development organizations prepared the holistic The East New York Rezoning Community Plan, with recommendations on a range of neighborhood issues, from land use to governance. However, these local planning efforts have also brought up questions about who gets to define what the community is and what it needs. In Manhattan, the East Harlem Neighborhood Plan, facilitated by the Council Speaker Melissa Mark-Viverito’s office and Community Voices Heard – a  member-led social justice organization – has been criticized by community activists as too consistent with the city’s proposed rezoning, which promises to feed the gentrification process and lead to more displacement.

 

The community plans have sections focused on the preservation of neighborhood culture, including strategies for protecting neighborhood businesses and institutions. They highlight the following planning and economic development tools that can protect neighborhood cultural and commercial vitality.

 

1. Zoning including restrictions on certain uses as, for example, part of a Special Zoning District proposed by community groups in Chinatown; and limits on the ground floor frontage of retail spaces to discourage the proliferation of big box stores, borrowing from a zoning initiative implemented by Manhattan Borough President – then Councilmember – Gale Brewer on the Upper West Side.

 

2. Tax abatements for landlords who provide long term leases for “community serving” institutions in Chinatown and East New York.

 

3. Technical and financial assistance including a training program for young entrepreneurs in Chinatown; increased funding for small business assistance programs in East New York and East Harlem; anti-harassment legal services and funds for preservation of mixed-use properties in East New York.

 

4. Targeted use of city subsidies including a 25 percent set aside in city subsidized developments for small mom and pop shops in East New York.

 

5. Demand-side programs including efforts to re-engage with the regional Chinese customer base in Chinatown and streetscape and facade rehabilitation efforts in East New York and East Harlem.

 

Taken together and aggressively applied by public and private stakeholders, these five tools would make a noticeable impact on preserving the existing cultural vitality of each of these three neighborhoods. However, if there is a need for such an intensive and multifaceted effort to preserve local institutions in neighborhoods as varied as Manhattan Chinatown and East New York, what will happen to the same institutions in neighborhoods that do not have a rezoning to respond to?

 

 

NEEDED: A WIDER APPROACH AND COMMERCIAL RENT REGULATION

 

The tool that is notably absent from the planning and policy toolbox is a citywide approach that promotes holistic neighborhood planning and incorporates the preservation of neighborhood businesses and institutions, as well as the ability to regulate commercial rents.

 

The history of commercial rent regulation efforts in New York City is long and sad, including short-lived and frustrated reforms. Today, legislation has been proposed that would give commercial tenants the right to a lease renewal every ten years and introduce a mediation process over rent increases. The bill was first introduced in the New York City Council in 1984, and then reintroduced as the Small Business Survival Act (SBJSA) in 2008. Even though Mayor de Blasio supported the SBJSA as a council member, he has shied away from wholesale policies targeting commercial leases as Mayor. Instead, the administration has focused on technical assistance, regulatory reforms and demand side initiatives.

"New York City’s focus on zoning as the driving force of neighborhood planning creates a very limited framework for communities to envision sustainable and equitable neighborhood development."

The problem is that such measures are too narrow. Regulatory reforms aimed at small businesses miss small nonprofits; technical assistance is mostly available to those businesses and nonprofits that know to seek it out. Further, New York City’s focus on zoning as the driving force of neighborhood planning creates a very limited framework for communities to envision sustainable and equitable neighborhood development.

 

There is an inherent value judgment in not taking holistic action. The current market conditions favor businesses and institutions that are palatable to wealthier and whiter users and will continue to reproduce those types of spaces. Without a city-wide policy acknowledging non-residential displacement and targeting the problem – rising land costs and commercial lease negotiation that are strongly weighted toward the landowner – the city will continue to lose the bodegas, grocery stores, laundromats, cafes, restaurants, day care centers, gyms, small arts nonprofits, community centers, theaters, beauty parlors, bookstores and faith-based institutions that create cohesive, thriving neighborhoods.

Oksana Mironova was born in the former Soviet Union and grew up in Coney Island, Brooklyn. She is a founding board member of the NYC Real Estate Investment Cooperative and writes about cities, alternative economies, and public space.

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