New York, NY—The $1.9 trillion stimulus bill passed last month provides substantial relief to small businesses, such as $25 billion for restaurants and bars. But one restaurateur, Peter Walsh, had to shutter his iconic Coogan’s Restaurant in Washington Heights because of the double hit of the pandemic and exorbitant rent increases. He joined a multi-community board program recently to talk about the necessary steps to sustain mom & pop businesses throughout the city.
Multiple community boards—1, 5, 6, 7, 8, 9, 10, 11 and 12—across Manhattan have collaborated to produce a series of programs that focuses on the changing housing market and how it affects the livability and character of neighborhoods. January’s program centered on increased housing market prices and affordable housing.
Last night’s program, billed as Pricing Out Mom & Pop: How Does the Changing Housing Market Affect Small Businesses, featured elected officials, business improvement district managers and small business owners and was moderated by Kyle Athayde, Community Board 6 Chair.
Athayde's first question to the panelists was directed to Jessica Walker, President and CEO of the Manhattan Chamber of Commerce. He asked whether the changing housing markets represent a threat or an opportunity to small business.
Walker said it depends on how nimble and innovative is the business.
“The housing market affects rents [and] right now we’re seeing as a result of the COVID-19 crisis the lowest residential average rents since March 2015,” said Walker.
“That actually could affect what the prices are in a specific area for commercial rents as well, and that could actually create some opportunities for small business that are looking to relocate to certain neighborhoods or looking to launch.”
Jessica Lappin is the President of the Alliance for Downtown New York, the country’s largest business improvement district (BID). Athayde asked Lappin what can small businesses do to adapt and survive in the context of fluctuations in the housing market.
Lappin said that the Alliance provides a variety of online tools to help downtown small businesses reach the approximately 64,000 residents who live within the Alliance’s district. For example, the Alliance publishes for free on its website internal research about a small business’s customer base.
“It’s been a really, really tough road and I don’t think there is anyway, I know this talk isn’t about COVID-19, but there’s no way to have a discussion about anything in terms of our economy right now that doesn’t touch upon COVID-19,” said Lappin.
“It’s been so hard for people to hang on and to survive, and I think, and I hope that as they adapt in the future using research, using tools, using social media, it’s going to be really key for them to understand who their audience is and reach them in new ways.”
Rose Pierre-Louis is the Chief Operating Officer for The McSilver Institute for Poverty Policy and Research at NYU. Athayde asked what impact does displacement of small business have on neighborhoods, and conversely, what impact does residential displacement have on small business.
Pierre-Louis first said that in places like Harlem, particularly Central Harlem, absolutely there has been residential displacement but at the same time there’s also been a tremendous influx of people taking advantage of a housing stock that is now referred to as the new Gold Coast.
Sadly, she said, longtime residents and small businesses who have stayed through the good, the bad and the ugly are being now being priced out.
“[When] looking at things like Area Median Income for neighborhoods like Harlem, I think it has had not only the opportunity to bring in new businesses and increase our housing stock but mom and pops that had been with us, [who] have been the character of our communities [are now displaced],” said Pierre-Louis.
Peter Walsh was then asked about what are some early warning signs, based on his 35 years as the co-owner of Coogan’s Restaurant, that a small business is going to be priced out of its neighborhood.
“You start talking to yourself, and you find out it’s an argument,” quipped Walsh.
But more seriously, Walsh noted, a telltale sign is when a restaurateur has to change the menu prices more than the usual amount.
“You like to do menu prices twice a year at the most, and optimally, only once per year. But to keep up with your food prices, rents and everything else—if you find yourself changing your menu prices more often, you have a problem,” said Walsh.
Walsh added that New York City was already a tough place to start a business pre-COVID.
“You have to ask yourself why would you want to have a small business in New York City? It is one of the worst cities to start a business—it’s ranked 69th in the ease in starting a business, 80th in operating a business and 88th in taxes—that’s really not an inviting list of numbers,” Walsh said.
Despite those numbers, however, Walsh still retains his entrepreneurial ambition. Even though he’s no longer a small business owner, nonetheless, he created the Coogan’s Community Fund to help support small businesses in the Washington Heights Community.