Why Small Businesses Outside Manhattan Are Reeling

Good morning. It’s Wednesday. Today we’ll look at why rents on stores and restaurants outside Manhattan are climbing. We’ll also look at the verdict that found former President Donald Trump liable for sexual abuse and defamation.

Small businesses outside Manhattan helped New York City bounce back from the pandemic. Now many, still coping with losses from Covid shutdowns, worry that they will have to shut down again, this time for good, because their rents are spiraling upward. The burden is hitting store owners in predominantly Black, Latino and Asian neighborhoods, according to a new analysis of data from the city’s Department of Finance. I asked my colleague Stefanos Chen to explain.

My first question is the obvious one: Why? Why are rents outside Manhattan climbing so fast and so steeply?

What we’ve seen throughout the pandemic is that the economic engine the city had relied on, primarily the office market in Midtown Manhattan, was the first thing to go. And people who worked at home stayed at home when the pandemic restrictions were loosened, so the ecosystem that relied on the office market dried up.

That was not the case in the other boroughs. The exodus from New York that many were wringing their hands over was primarily about wealthy people, many of whom lived in Manhattan or worked in offices there. Things were different in Brooklyn, the Bronx and Queens, places where the essential workers who kept the city functioning live.

We’re now three years into the pandemic, and in that time, landlords with storefronts in Manhattan have not been able to command higher rents. In fact, many rents there have gone down. It’s the opposite of what is happening in the other boroughs, where there is a lot of demand for storefront spaces. I think the landlords there are saying the city’s doing better; therefore tenants should not only pay up but also make up for the last few years.

You wrote that before the pandemic, a 3 percent annual rent increase was typical, but in places in Queens and the Bronx, rents rose more than 30 percent from 2019 to 2021.

It’s very unusual for a place like the Rockaways in Queens, where rent increased 38 percent from 2019 to 2021. Compare that with the biggest drop in the city, in Lower Manhattan, where rents went down 17 percent.

It’s a realignment of the city’s economy.

One source I spoke with at a neighborhood nonprofit said that some landlords are using the other boroughs to try to make up for losses in Manhattan.

That compounds the problem. A store owner in eastern or central Queens is not necessarily the same as one in Manhattan. We looked at the demographics of these areas. The majority of the population in places where the rents went up were people of color and immigrants.

And in some cases, the rent increases are stunning.

I talked to Yamuna Shrestha, whose momos, a kind of Nepali dumpling, have been voted the best in Queens four times. She owes more than $150,000 in back rent because of Covid restrictions and a general slowdown in the first years of the pandemic. She’s now paying more than $13,300 a month, up 11 percent since 2019 — perhaps a reasonable increase in good times, but very challenging under the circumstances.

Restaurant owners like her were most vulnerable to economic disaster before the pandemic, and now they’re facing two worst-case scenarios: Their rent is going up, and they’re already in debt.

Federal pandemic-related programs to help small businesses are ending. What is the city doing?

The city will point to initiatives that officials say they are using to support small businesses, but several business owners said the programs are inadequate. There’s a program called the Commercial Lease Assistance Program, which provides free legal services to small businesses for things like dealing with a landlord negotiation on lease issues. So far, that program has helped fewer than 2,000 businesses. That’s a fairly small chunk of what’s out there.

But at the same time, a lot of people want to start their own businesses.

There’s been a huge rush of new business applications, especially in the boroughs outside Manhattan, partly because there were so many job losses in retail and hospitality businesses. These are people who were most likely to start mom-and-pop businesses, which have been a reliable path to middle-class prosperity.

Isn’t there some kind of rent regulation that shields tenants in stores from unexpectedly large rent increases?

While some residential tenants in New York City are protected from unreasonably large rent increases, similar safeguards don’t exist for commercial storefront tenants. When their leases are over, they can be removed in short order, and the landlord is under no obligation to cap the rent when the renewal comes up.

The flip side is that landlords are hurting too. When we talk about back rent, that’s rent landlords did not receive when they were expecting it and had to cover expenses like rising property taxes. Inflation has added to what they spend on maintenance and eaten away at their profit.


Enjoy a sunny day near the low 70s. The evening is mostly clear, with temperatures dropping to around the mid-50s.


In effect until May 18 (Solemnity of the Ascension).

The latest New York news

Restructuring reading: Major changes are coming to reading instruction in New York City schools, in an aim to tackle a persistent problem: About half of city children in grades three through eight are not proficient in reading.

We want to know what the city’s reading overhaul means for you.

A frantic search for migrant housing: Facing an expected deluge of migrants in the coming weeks, an overburdened shelter system and an impossibly tight housing market, New York City officials are casting a wide net as they scramble to accommodate the influx of migrants. The Flatiron Building said no.

Trump is found liable in E. Jean Carroll’s civil case

Donald Trump long relished being seen by the world as a man who was irresistible to women, engineering tabloid headlines like “Best Sex I’ve Ever Had” and bragging, in an exchange caught on tape, that he could grab women’s genitals. “When you’re a star, they let you do it,” he said.

Now a Manhattan jury has labeled Trump as not a Lothario, but an abuser.

Nine jurors in Federal District Court found him liable for the sexual abuse of the magazine writer E. Jean Carroll. The nine jurors also found him liable for defaming her for a statement he posted on his Truth Social platform last year that called the case “a complete con job” and “a Hoax and a lie.”

In all, the jury awarded Carroll, 79, a total of $5 million in damages. But by concluding that Trump, 76, had sexually abused her, the jury said that she had not proved by a preponderance of the evidence that he raped her. And the verdicts, after not quite three hours of deliberation, are civil, not criminal — meaning that Trump was not convicted of a crime and faces no prison time.

Carroll had accused Trump of shoving her against a wall and raping her in the mid-1990s in a dressing room at Bergdorf Goodman, the luxury department store in Midtown Manhattan. She kept the incident a secret until 2019, when she described it in a book that was excerpted in New York magazine.

My colleague Jonah E. Bromwich noted that Trump had been faring well politically before the verdict, and that it is not clear how — or whether — the jury’s decision will affect his momentum as he tries for another four years in the White House. Trump posted a message in capital letters on Truth Social that called the verdict “a disgrace — a continuation of the greatest witch hunt of all time.”


Day before Thanksgiving

Dear Diary:

On the Wednesday before Thanksgiving, which was to be a catered, nontraditional feast for two by a local chef, my husband considered the subject of dinner. I suggested pizza and then left to run some errands.

“Or I’ll go to Mani’s for ground turkey and rolls,” he said as I was leaving, suggesting a market near us on the Upper West Side.

On the way home from my errands, I passed Mani’s and ducked in impulsively. When I got home, I gleefully held up the package of organic ground turkey and potato rolls I had bought.

My husband’s mouth dropped open.

“I just ordered pizza!” he said.

A “Gift of the Magi” moment.

But wait, there’s more.

On Thanksgiving, the chef was running late. Her 4 p.m. delivery was pushed back to 5. No problem.

Then, a few minutes later she messaged me a photo of her bleeding hand. She had cut it accidentally while chopping carrots and was headed to the emergency room.

The turkey burgers were delicious.

— Naomi Serviss

Illustrated by Agnes Lee. Send submissions here and read more Metropolitan Diary here.

Glad we could get together here. See you tomorrow. — J.B.

P.S. Here’s today’s Mini Crossword and Spelling Bee. You can find all our puzzles here.

Melissa Guerrero, Geordon Wollner and Ed Shanahan contributed to New York Today. You can reach the team at [email protected].

Sign up here to get this newsletter in your inbox.

Source: Read Full Article