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Small business New York City Council street vendor permit bill – Crain's New York Business

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Legislation that would expand the number of street vendor permits by 4,000 during the next 10 years would be ruinous to mom-and-pop stores already struggling to pay rent and make payroll during the pandemic, business leaders said. 

“This could spell the end of small neighborhood business,” said Hank Sheinkopf, spokesman for the Latino Bar and Lounge Association. “No one knows what the [City] Council is thinking.”

The proposed legislation aims to expand the number of street vendor permits by 400 per year during the next decade, with 300 of those restricted to the outer boroughs. The measure also would create an advisory board to evaluate rules, as well as measures to crack down on illegal vending.

The bill proposes a new dedicated enforcement unit that would begin operations in September. The new advisory board would review rules related to the placement of restrictions on the street, the impact of open streets and open restaurants on street vending, and whether the use of sidewalk and street space is equitable and well-managed. 

“This is just pitting one business against the other and failing to address the underlying problems,” said David Estrada, executive director of the Sunset Park Business Improvement District. “This piece of legislation is a recipe of administrative failure, and it’s a call for noncompliance.”

The growth in the number of street vendors has concerned small-business owners and Business Improvement District leaders, who view the vendors as unfair competition because of their low operating costs. Street vendors in New York, who sell practically everything—including fruit, vegetables, clothing, cellphone accessories and personal protective equipment—don’t pay rent or workers’ compensation. In most cases they are sole proprietors.

The city has capped street vendor licenses at 3,000 since 1983. An additional 2,100 licenses are made available for seasonal permits, green carts for certain neighborhoods, borough-specific permits, and vendors who are veterans or disabled. But there are many illegal vendors, with numbers that likely reach into the thousands, according to small-business advocates. 

“When you look out your door and see people undercutting you and selling substandard merchandise, it does hurt,” Estrada said.  

Some New York brick-and-mortar retailers pay a 3.9% commercial rent tax, while legal street vendors pay $200 for a two-year permit. Illegal street vendors, of course, pay nothing.   

“A lot of the small businesses are directly impacted,” Estrada said. “These are small, family-run, locally owned sole proprietors and immigrant families struggling to get by.”

One reason the City Council is seeking to pass the bill is to create more accountability in the vendor market through a wider permit system.  

“They argue if everyone who wants a permit gets a permit then you’ve taken the economic incentive away from operating on this black market,” said Rob Byrnes, president of the East Midtown Partnership. “But that doesn’t really stand up.”

The increased number of permits would still leave a large demand, and the black market would continue to thrive, Byrnes said.

The bill has multiple co-sponsors in the council, including Margaret Chin, Brad Lander and Carlos Menchaca. 

“The call is clear: We need more permits to address the underground market and exploitation of immigrant workers; upgraded enforcement mechanism to halt overpolicing at the hands of the NYPD, all while upholding public safety, especially during a health crisis,” Menchaca said in a statement. “Intro-1116 will ensure that all stakeholders have a voice in a new advisory board in an ongoing effort to hear recommendations from the community.” 

The offices of Chin and Lander did not respond to a request to comment.

The enforcement aspect of the bill, which would remove the NYPD from regulating street vending, has drawn criticism from a consortium of small-business owners.

“The council’s bill would make that issue even worse by vastly expanding the number of street vendors in New York City at a time when restaurants and other establishments are already fighting a losing battle to stay afloat and keep their workers employed,” the owners wrote in a Jan. 12 letter to the council. “Without the ability to enforce rules against unlicensed vending, increasing the number of permits will be ultimately irresponsible.”

Critics trace the enforcement problem back to June 7, when Mayor Bill de Blasio announced he would be transitioning the police away from enforcing street-vendor regulations. The move followed widespread protests after the Minneapolis police killing of George Floyd.

“We will shift certain responsibilities away from the NYPD, including street vendor enforcement,” de Blasio wrote in a tweet. “Civilian agencies will move into the lead, de-escalating these interactions that overwhelmingly affect immigrants and communities of color.”

The enforcement issue remains in flux. The mayor’s office said Thursday that the bill would create the Office of Street Vendor Enforcement, led by the Department of Consumer and Worker Protection. 

Multiple agencies in the de Blasio administration have been responsible for enforcing illegal street vending, including the Police, Transportation, Sanitation and Consumer Affairs departments. 

De Blasio’s office said it is pushing the council to adopt changes that would protect brick-and-mortar businesses from having to compete with street vendors. 

Speaker Corey Johnson’s office said, “The bill is going through the legislative process.” 

The bill is set to be voted on when the council meets Jan. 28, the mayor’s office said. 

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