New York City, USA – Ronnie Jaramillo and Dana Morrissey own and operate several small restaurants in south and central Brooklyn. These include Chela, a Mexican restaurant, and Bar Chuzo, a “Latin bistro and cocktail bar.” However, hurdles have increased in recent years due to soaring rents and the effects of flooding.
They are watching the mayoral election closely because they feel New York City is becoming a tougher environment for small businesses like theirs.
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“New York City is a city that sells the American dream. But it doesn’t feel like that right now. I don’t feel like New York City is welcoming to business owners, I don’t feel like it’s protecting business growth and more jobs. I don’t think that’s the environment right now,” Jaramillo told Al Jazeera.
Early voting has already begun in New York City, and small business owners are keeping an eye on Zoran Mamdani, the likely next mayor, and how his policies will address the growing challenges facing them.
Mamdani’s relationship with the city’s business community is complicated. While his proposals for small businesses aim to ease financial burdens by reducing fines and fees, many still face high rents, limited relief, and climate-related risks that disrupt their operations on a daily basis.
Much of the interest in Mamdani’s candidacy stems from his focus on affordability. His campaign, for example, has prioritized freezing rents on rent-stabilized apartments and expanding housing development to alleviate the city’s rent shortage.
But on the commercial front, businesses continue to face tough challenges, with few safeguards against price gouging and neither Mr. Cuomo nor his opponent Andrew Cuomo’s campaign offering any concrete ways to address them.
“One of our stores literally got jacked and had to close. The rent went from $8,700 to $15,500…Unfortunately, there’s nothing to stop the landlord from doing anything. There’s no protection at all,” Jaramillo said.
“What I usually worry about is that you put a lot of money into a business, especially a restaurant, and all of a sudden you find that prices are going up. That’s definitely a negative. The problem is that there’s no regulation of that in our city at all,” said Mark Caserta, vice president of small business support at the Brooklyn Chamber of Commerce.
Mamdani told Al Jazeera that he is looking for ways to address rising rents in commercial real estate.
“We will certainly consider every possible measure within the administration to understand that we need to provide stability for all types of tenants, not just residential tenants. There are examples across the country where different approaches have been taken to ensure more stable rents for commercial tenants,” Mamdani told Al Jazeera at an event on Saturday.
One such case is Pennsylvania, which has a state-level program called the Office of Change and Opportunity, the campaign said.
But the program focuses on expedited permitting, not commercial real estate prices.
Mamdani is focused on reducing fines and fees for small businesses and appointing a mother-son czar who will help small businesses in the city resolve any problems that may arise.
Mr. Cuomo’s plan, by contrast, would further strengthen public-private partnerships, a strategy that has contributed to soaring rents over the past two decades. Cuomo’s campaign did not respond to Al Jazeera’s questions about its plans to address commercial real estate costs.
Under former Mayor Michael Bloomberg, who served three terms from 2002 to 2013, the city invested heavily in public-private partnerships to develop major corridors. Big developers bought up real estate, including buildings housing small businesses, giving corporate landlords more leverage to raise rents and relocate low-margin businesses.
“New York City’s public-private partnerships often neglect small businesses. Incentives and zoning benefits tend to favor larger developments, while independent retailers face rising rents, limited access to capital, and increased regulatory burdens. As a result, the mom-and-pop tenants who give neighborhoods their identity are priced out,” Bernadette Brennan, executive director of real estate firm Serhant, told Al Jazeera.
Even if a space isn’t filled right away, developers often retain high-income tenants, such as big box stores or high-end retailers, and leave it vacant rather than renting it to small businesses. Jaramillo says this undermines the cultural diversity that small businesses bring to a city.
“I think one of the things we love so much about New York City is the diversity of businesses and small businesses. We have a lot of friends who are small business owners, and many of them are struggling to make a living,” Jaramillo said.
Other business owners are also feeling the pressure.
Josue Pierre, owner of Rogers Burgers, a newly opened Caribbean-style burger joint in Flatbush, Brooklyn, a neighborhood with a large West Indian and Caribbean population, told Al Jazeera that while Mamdani’s plan is not perfect, he is encouraged by the candidate’s responsiveness to the concerns of small businesses, which he feels Cuomo lacks.
“Given those two options, I’m going to go with the candidate who’s actually open to the idea of doing something for small businesses,” Pierre said.
wage increase
Raising wages has been a centerpiece of Mamdani’s campaign, with overwhelming support among voters, with 72% of New Yorkers supporting a $30-an-hour minimum wage, according to Lake Research Partners. Mamdani has proposed raising the minimum wage to $30 an hour by 2030.
While supporting wage increases, Pierre also emphasized the importance of balancing labor costs and consumer spending.
“How you manage your workforce is very important because it can make or break you. But just like with rent, if they don’t have any disposable income, why would they come here and buy something? If working class people are going through a recession bubble while the rest of the economy is doing well, that’s not in our interest,” he said.
Jaramillo and Morrissey argue that rising wages could force restaurants to lay off workers or raise prices. Given the already high cost of living, this could reduce disposable income for customers to use at restaurants, threatening the survival of the business.
Mamdani’s campaign emphasized that reducing fines, fees and related costs for small businesses would put them in a better position to pay workers a living wage. He pointed to rising water and other utility costs as the main factor driving up costs, and shifted the blame to current Mayor Eric Adams.
“What we are hearing from these tenants is that in addition to their rent, they also have to deal with water bills that have increased by the highest amount in 13 years,” Mamdani told Al Jazeera.
“Mayor Adams gave a thumbs up to the scale that makes this city more expensive for tenants, homeowners and small business owners.”
Water prices will rise by 8.5% in 2024, the largest increase since 2011.
Mamdani has not made any changes to the wage plan.
climate concerns
Resilience to climate change is a growing concern among businesses, especially retailers, who have suffered significant losses from repeated floods in recent years. In 2023, 200 businesses in Brooklyn were damaged by flooding, according to the Brooklyn Chamber of Commerce. Many small businesses above ground were quickly flooded, and some residents living in underground apartments tragically drowned.
Bar Crudo, a now-closed restaurant owned by Jaramillo and Morrissey, was one of the hardest hit. The sewer backed up and flooded the restaurant, causing $15,000 in damage, of which only $5,000 was covered by insurance.
The National Climate Assessment reclassified New York City as having a humid subtropical climate. This category is partially defined by frequent and heavy rainfall.
Mamdani’s climate policy is ambitious and focuses on retrofitting 500 public schools to make them more climate-resilient and able to serve as emergency shelters. He also supports increasing the city’s use of renewable energy and reducing its reliance on fossil fuels.
But business owners like Mr. Jaramillo feel that while Mr. Mamdani’s plan is positive, it does not address the immediate threat that increasing flooding poses to small businesses in vulnerable areas.
Mamdani’s camp told Al Jazeera that one of the plans is to expand the city’s small business grant program, which helps small businesses invest in infrastructure so they can buy flood-proof storage space and generators.
Mamdani’s camp also told Al Jazeera that the goal is to build more parks as natural flood defenses to protect city streets and the shops that line them.
Hurdles for large companies
Mamdani faces significant opposition from powerful corporate interests. Many companies are wary of his proposed tax hikes, which include a corporate tax rate of 11.5%, up from the current 7.25% in neighboring New Jersey.
Any tax proposal would require approval from the governor. New York Governor Kathy Hochul recently endorsed Mamdani over Cuomo.
Some of New York’s wealthiest donors have contributed to the effort to defeat Mandani, including former mayor and Bloomberg LP founder Michael Bloomberg, who donated $5 million. Hedge fund manager Bill Ackman donated $1.2 million. Airbnb co-founder Joe Gebbia donated $2 million. And Alice Walton donated $200,000 to a political action committee supporting Mr. Cuomo.
Mr. Walton, who heads the Alice L. Walton Foundation, has limited ties to New York. Walmart does not have a store in the city and is based in Bentonville, Arkansas, although she bought a Manhattan condo in 2014, according to donor records. Al Jazeera asked her why she chose to donate to candidates despite her limited ties to the city, but she did not respond.
Republican candidate Curtis Sliwa claimed that several major donors had approached him about withdrawing from the race amid concerns that his long-term candidacy would hurt Mr. Cuomo’s chances of effectively competing against Mr. Mamdani. Despite Al Jazeera’s request, his campaign has not substantiated this statement.
After securing the Democratic nomination in July, Mamdani met with many of the city’s top business leaders through the Partnership for New York City, a group of 300 influential people.
“He (Mamdani) has made it very clear that the regime will not make unnecessary enemies against anyone. He will always meet with the leaders, listen to their concerns and cooperate as much as possible,” Mamdani’s campaign spokesperson Dora Pekek told Al Jazeera.
The New York Times said the private discussions also included JPMorgan Chase & Co. CEO Jamie Dimon, former UBS Chairman Robert Wolf and Kenny Burgos, president of the New York Apartment Association, a landlord group that supports Mr. Cuomo.
Representatives from Burgos told Al Jazeera that the discussion focused on “the severe distress in rent-stabilized buildings and the need for assistance with operating costs, particularly property taxes. Mr. Kenney feels his message was clearly communicated, and Mr. Zoran also understands the level of distress in older rent-stabilized buildings.”
“Jamie called me and said he loves New York City and wants to help whoever becomes mayor. It was a short but polite call,” a representative for Dimon told Al Jazeera.
