Small Businesses Struggling to Afford Rent in the NYC: Will This Change with the SBJSA?
The Small Business Jobs Survival Act, SBJSA, is one of the hottest topics among small businesses in New York today. It has the potential to fix the crises caused by the extremely high rents. At least this is what the Friends of the SBJSA are saying. However, many others, especially the Real Estate Board of New York are of the opposing opinion. Not only do they claim that this bill will not make any positive changes. In fact, they are confident that it will make the situation worse.
The facts, however, remain unchanged. The rent crisis does exist and something has to be done about it. The question is whether the bill that dates back about three decades is the solution.
photo/pexels
The Small Business Crisis in New York: Is It Possible to Afford Rent?
The empty storefronts of New York amply demonstrated by The New York Times are a definitive proof that the commercial rental crisis is real. Today the situation is the worst it has been in the last 25 years and it doesn’t seem like it can get better. The overall costs of living in New York City, which are high by default, are steadily rising. Therefore, it’s not a surprise that the rent goes up as well.
In light of this, small businesses have no choice but to look for ways to cut costs in order to be able to afford their office space. And this plan can work out if the company uses all the available tools and services.
The most effective routes are reducing taxes and shipping costs, as well as going mostly digital. The taxes can be cut by using Professional Employers Organizations (PEO). There are over 700 of them in the country and a PEO New York can not only minimize the employee taxes by actually being one that employs small business’ staff. It can also help the business hire the best professionals because these services offer benefits, which can entice them into the position. The result is the reduction in taxes and more productive employees, both factors contribute to the business’ ability to actually afford rent in the NYC.
The way to cut shipping costs is all about research and better logistics. Doing a lot of calculations and partnering with other small businesses is key. Meanwhile going digital will help by reducing the actual amount of office space the company needs, thus the opportunity for smaller rent.
However, while all these methods are efficient to an extent, many businesses might not afford the current costs even with their help. According to the bill’s supporters, the SBJSA can fix this.
Will the SBJSA Help Small Businesses Afford New York Rent?
It’s important to understand that the SBJSA isn’t going to lower commercial rent costs. In fact, it has very little impact on the money. What it does impact is the regulation of the commercial rent. The focal point of the current bill is that a tenant will be able to get an ‘automatic’ 10-year lease after their current lease runs out.
There are no limitations to the increase in rent, but there is a proviso that any landlord-tenant disagreements are to be resolved through arbitration.
One of the biggest issues at the moment is that the ‘arbitration’ mentioned in the bill is vague at best. The SBJSA doesn’t outline its actual structure, power, or guidelines it must operate under. Therefore, there is no saying what fair arbitration will be like and whether either landlords or tenants will benefit from it.
As it currently stands the SBJSA doesn’t have the clarity and structure necessary to be a major power in resolving the rent crisis in the NYC. However, some of the ideas in its core do have the power to invoke a major positive change. The question is whether the bill will ever be polished and realized in the form that will be helpful to small business.
Author: Jane Koval
This is not an accurate assessment of what the SBJSA is actually intended to do nor does it address the larger issue at play which is landlords unjustifiably hiking rents in order to milk big corporations. The SBJSA is designed to save small businesses from closing when the landlords force them to pay 400% increases or more. It is also meant to address the vacant storefronts plaguing the City,
Reporter needs to do her research and get the facts straight.
The bill details both the arbitration process and guidelines to be used . At it stands the bill is the ONLY real solution to stop the closings and it is simple , give the tenants rights. This is just more REBNY talking points based upon false narrative.