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Featured Article, Report, Resource filed under Independent Business | Written by Olivia LaVecchia | No Comments | Updated on Apr 20, 2016

New Report: How Rising Commercial Rents Are Threatening Independent Businesses, and What Cities Are Doing About It

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/affordable-space/

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ILSR’s new report examines how high rents are shuttering businesses and stunting entrepreneurship, and explores 6 strategies that cities are using to create an affordable built environment where local businesses can thrive. 

Image: Report cover.In cities as diverse as Nashville and Milwaukee, Charleston and Portland, Maine, retail rents have shot up by double-digit percentages over the last year alone. As the cost of space rises, urban neighborhoods that have long provided the kind of dense and varied environment in which entrepreneurs thrive are becoming increasingly inhospitable to them. Local businesses that serve the everyday needs of their communities are being forced out and replaced by national chains that can negotiate better rents or afford to subsidize a high-visibility location.

This new report from ILSR offers elected officials insights on what’s causing commercial rents to skyrocket, and explores six broad policy solutions, with practical examples, that cities can use to keep commercial space appropriate, accessible, and affordable for independent businesses.

The report finds that the sharp rise in rents is happening across a range of communities, with some of the most intense pressure falling on businesses in lower income neighborhoods. And the trend isn’t limited to retailers. The price of industrial space is rising rapidly too, jeopardizing a budding renaissance in urban manufacturing.

There’s a public interest in the commercial side of the built environment, the report concludes, and smart city policy has an important role to play in creating an urban landscape in which locally owned businesses can thrive.

Read: ONE-PAGE FACTSHEET  |  Press release  |  Full Report  |  MAPPING RISING RENTS

 

Introduction

For 22 years, Lisa Monson ran her business out of a building she rented in Salt Lake City’s 15th and 15th business district. The 2,800-square-foot space was a good size for her hair salon, and she liked being in a neighborhood of locally owned businesses.

Like many business owners, though, the more Monson continued to invest in her business, the more wary she became of losing her space. Her landlord wouldn’t offer her a long-term lease, and every three years, she faced a tough renegotiation. Meanwhile, national chains had started moving into the neighborhood, including a Starbucks and an Einstein’s Bagels that bought out a local bagel shop.

“It kept me in a place where I was completely at risk of being thrown out,” Monson explains. “I knew that if he got an offer for a lot more money, I wouldn’t be able to match it.”

The cost of commercial space is spiking upward around the country, driven both by run-away real estate speculation and the growing popularity of urbanism. As a new generation discovers the appeal of walkable and mixed-use neighborhoods,[1] demand for small commercial spaces in those neighborhoods is far outpacing supply, and rents are rising to match. Locally owned enterprises, which thrive in these areas, are increasingly threatened with displacement from the neighborhoods that they’ve made vibrant, and getting replaced by national chains that can negotiate better rents or afford to subsidize a high-visibility location. As high rents shutter longtime businesses, they also create an ever-higher barrier to entry for new entrepreneurs, stunting opportunity and leading to a scarcity of start-ups in cities once known for their business dynamism.

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Photo: Stacy Mitchell speaks at the 2016 Winter Institute.
Featured Article, Resource filed under Independent Business | Written by ILSR Admin | No Comments | Updated on Mar 4, 2016

Watch: Stacy Mitchell Speaks on the New Localism

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/watch-stacy-mitchell-speaks-on-the-new-localism/

ILSR’s Stacy Mitchell spoke about policy to shape the next phase of the local economy movement in this presentation at the 2016 Winter Institute. The annual conference and educational event, hosted by the American Booksellers Association, was held in Denver on Jan. 25 and 26. Continue reading

2016 Independent Business Survey Cover
Featured Article, ILSR Press Room, Report, Resource filed under Independent Business | Written by Olivia LaVecchia | No Comments | Updated on Feb 10, 2016

Independent Businesses Report Growing Sales and Hiring, but Policies Tilted in Favor of Large Companies Hold Them Back

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/2016-independent-business-survey/

The 2016 Independent Business Survey finds that independent businesses experienced brisk sales and a sharp increase in hiring in 2015, but that biased policies and other obstacles are limiting their success. Continue reading

Photo: Empty Walmart.
Featured Article filed under Independent Business | Written by Stacy Mitchell | No Comments | Updated on Feb 17, 2016

With 269 Stores Closing, Is this the Beginning of the End for Walmart?

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/with-269-stores-closing-is-this-the-beginning-of-the-end-for-walmart/

All great retail empires eventually fall. A&P did. So did Montgomery Ward. But Walmart’s recent announcement that it would close 269 stores may not be an initial stumble on a path toward demise so much as a move to abandon communities that it has decided simply aren’t worth the trouble. We look at both the bad and the good fallout from Walmart’s pullback, and how its closures are best explained as a side effect of its main strategy for dominating the economy: overbuilding regions to the point of not just destroying competition but cannibalizing its own sales, while communities bear the consequences. Continue reading

Photo: Main Street.
Featured Article filed under Independent Business | Written by Olivia LaVecchia | No Comments | Updated on Jan 12, 2016

New Studies Reveal 5 Reasons Policymakers Should Prioritize Local Business in 2016

The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/5-reasons-for-policymakers-to-prioritize-local-in-2016/

Recent findings from prominent economists, sociologists, and other researchers suggest that small, local businesses are critical to overcoming many of our biggest challenges, from reducing economic inequality to building resilient communities. We round up the new studies and what they tell us about why policymakers should focus on local business in 2016. Continue reading