Friday, May 1, 2015

What's missing from #OneNYC? Why losing NYC character is important, RGB increases, #SAVENYC event tomorrow....

Since my last post, here are a few more businesses that I saw on Seinfeld re-runs which have also vanished: United Artists movie theater in Times Square, 50th Street Guild movie theater, Putamayo, Chock Full o'Nuts coffee shops...
And speaking of businesses, it's hugely curious the de Blasio administration's new #OneNYC (his version of Mayor Bloomberg's sustainability plan) includes a purported goal of lifting people out of poverty, while simultaneously appearing to ignore one of the most sure-fire measures that has accomplished this. Small businesses have traditionally been considered a major pathway for low-income earners to achieve social mobility. 

In fact, small businesses in general are often the only employers of the least desirable, like people with little education or with a criminal record, because they take chances, including in hiring. Just starting a small businesses implies you're a chance-taker, as the odds are overwhelmingly against you at the outset. And, you can be sure big corporations don't take similar hiring risks, and government hiring usually involves rules, regulations and certain minimum requirements.

Yet, there is not a single reference to saving an existing business or to job retention in #OneNYC, or anywhere else in the administration's repertoire, for that matter.

Depending upon whom you ask, immigrants own either almost 50 percent of all NYC small businesses according to the city's small business agency, or more than 80 percent, small biz advocates like the Small Business Congress (SBC) estimate.

Regardless, why would the mayor's plan ignore existing businesses? You can talk about creating jobs, workforce development and better job training up the wazoo, but why wouldn't you do anything to protect those that already exist? 

This heartfelt editorial written by an immigrant small business owner goes to the crux of what's wrong with the city's two decades of ignoring the needs of our mom and pop stores--a policy still in place and seemingly not in any danger of imminent change.

#OneNYC's biggest "initiative" to directly help the poor is raising the minimum wage, an admirable and necessary goal. However, it's a somewhat simplistic and one-sided solution that could ultimately backfire, if it alone is enacted.

To put this into perspective, understand NYC small businesses contend both with exorbitant rents IN ADDITION to often paying a landlord's passed-on property taxes. Throw in a living wage requirement, or anything that could lower revenues for many mom and pops, and that could very well be the tipping point. It's just too much pressure--something inevitably has to give. We could potentially see widespread closures and massive amounts of job layoffs.

Now, before you think I'm adopting some reactionary position suggesting a living wage is less important than keeping small businesses open, that misses the critical point. It's not an either or question---we should be able to have both.

The key reasons the city's mom and pops operate within such a hostile climate are twofold:
1-The unfettered speculative real estate market--rising rent is a major cause of prices increasing, but wages are stagnating simultaneously, and every lease renewal puts more pressure on wages. Every rent increase essentially takes away any flexibility a small business owner may have had and that covers how much workers are paid above minimum wage. Steve Null from the SBC said, "There's a jobs AND wages crisis, and its connected. [Real estate] speculation and profiteering is causing inflation." 

2-The top-down economic policy started under Mayor Giuliani, but expanded as if on steroids under Bloomberg; As Null explained, instead of the city asking small biz owners 'How can we help you pay more [to your workers]?,' it ignores the environment under which they operate, permitting speculators to keep making bigger profits. "You can have better wages or higher landlord profits, but not both. You have to make an economic priority," Null said.

Let's not kid ourselves--we all know the main reasons small business after small business close in NYC--especially these days--are astronomical rent increases or a tenant being denied a new lease.

To help paint the picture, the SBC described some of the most common results when a commercial lease expires:

  • It's a death sentence for many long-established businesses, arts and cultural institutions, and for thousands of jobs;
  • It perpetuates sky-high rents, the changing character of city neighborhoods and loss of an energy and spirit to that community that can't be replaced;
  • The loss of opportunity for social mobility and critical first job experience for lower income families;
  • Countless empty storefronts on main street, with some spaces warehoused for years to maintain artificially high rents.

The mayor can change this immediately if he so chooses. After all, as previously written in EAP, Council Member Bill de Blasio was once a sponsor of the 'Small Business Jobs Survival Act' (SBJSA), which he called a means to fighting economic injustice. 

The SBJSA is intended to equalize the one-sided relationship between commercial tenants and landlords by bestowing tenants with rights: equal rights to negotiate and mediation, to a lease renewal, and to a lease that would cover a decent time span.

And this bill applies not only to retail tenants, but also cultural/arts organizations and professional offices--as opposed to at least one other proposal currently floating around. Unfortunately, these desperately needed rights seem to have disappeared from the mayor's brain.

It shouldn't be surprising given the deputy mayor for housing and economic development, who recently told a radio interviewer in a stunning example of cluelessness, "New Yorkers have a tendency to over-romanticize the city's rewrite history. Change is hard but change can also be great." 

How can someone with such authority and responsibility be so incredibly wrong? Then again, given her chosen and limited frame of reference--predominantly Goldman Sach's Urban Investment Group and Giuliani's HPD--I guess it's not that shocking.

Jeremiah Moss, creator of the Vanishing-NY blog and the #SAVENYC campaign, articulately explained why the DM is so deluded, in a segment I produced for WBAI radio's 'The Morning Show' on April 16:

I hear this argument a lot, that it's just all about nostalgia, and it's NOT all about nostalgia. It's not about the past really, it's about the present and a very real problem in the present of NYC losing its unique character. So, while many of the places we're losing are older--older places i think are like elderly people, the most vulnerable in this society--it's really about preserving and protecting what makes New York, New York. 

And that's not a nostalgic endeavor, that's about wanting to have a place with character, and we know NY is losing its character. We're hearing about it now everyday. We hear about it from celebrities. We hear about it from tourists. We hear about it from writers. It shows up in film... on Saturday Night Live. This is clearly something that most people agree upon...It's [the city] not there anymore, and it's disappearing faster and faster everyday.

Like clockwork, the Rent Guideline Board's (RGB) just-released preliminary increase numbers for stabilized lease renewals simply underscore how utterly meaningless the administration has been about affordability--and sadly, how beholden it is to the real estate industry. 

Last year's shenanigans were bad enough. But in a year where owners costs have demonstrably dropped, it seems as though our progressive mayor--with his total control of RGB appointments and the cover the RGB's own data offered--if he had wanted a freeze or negligent increases, the mayor could have easily gotten them.

Instead, we got 0-2 percent increases for one-year lease renewals and 0.5-3.5 percent for two. One tenant activist wrote: BDB/Alicia Glen Screw Tenants Again.  
This year the argument for a rent freeze, or even a decrease, and the accompanying data, are even stronger. While the freeze is still in play, the upper boundaries are even higher than last year. And for a two-year lease, the lower number.... is almost a full percentage point higher than last year's 2.75 percent. With the decrease in landlord expenses, especially fuel, a 0.5 percent increase is obscene. These ranges were set with the full approval of Mayor de Blasio. (Glen is the DM to whom I referred earlier.)

It should be noted the RGB's own 2015 Price Index of Operating Costs for rent-stabilized apartment buildings increased by a mere 0.5 percent. The federal government's 2015 cost of living adjustment (in this case, increase) was 1.7 percent.

How on earth are these ranges justified, especially for two-year renewals? This administration was welcomed by many who expected a deliverance after so many years of exclusively pro-landlord disproportionate increases. Disappointment shouldn't be the only response. People should be irate and inundating their Council Member, Speaker and Mayor with calls and emails. They should be marching on those offices. This cannot and should not be accepted as a fait accompli.
Don't forget #SAVENYC's rally/concert at Arlene's Grocery, in what remains of Manhattan's LES tomorrow, Saturday, May 2 @10pm. Admission is $5, with appearance by the very fabulous and entertaining NYC stalwart, performance artist Penny Arcade, and original NYC punk and front man of the Dictators-NYC (formerly the Dictators), Handsome Dick Manitoba. 

Having seen both perform several times, get ready for lots of fun. Because both are veterans of the city's one time thriving underground/alternative scene, prepare to also be schooled in why NYC's disappearing character is so damned important.
Update and Correction: The RGB's 2-year lease renewal range is 0.5-3.5 percent, not 3.5-5 percent. Additional information has also been added.