Massachusetts restaurants, bars, retail shops, gyms, salons, and many other businesses face an unprecedented and existential threat from the COVID-19 pandemic. The necessary measures taken to reduce the spread of the virus — a combination of mandated closings and a general policy of social distancing — have resulted in an almost total loss of revenue for many businesses. The federal government is acting to provide relief to individuals, businesses, and state governments but, without targeted assistance, thousands of shuttered operators will never be able to reopen their doors when the threat from the disease subsides. State and local governments have a duty to step in.
The first priority of small businesses is to help ensure the well-being of our workforce, including more than 600,000 restaurant, retail, and personal-service workers across Massachusetts. As our doors have closed, many small-business owners have been forced to make heart-wrenching decisions to reduce hours, furlough workers, and lay off staff. Many don’t have the revenues coming in to make payroll, even after forgoing a paycheck and cutting other expenses. We’re grateful that the governor and the Legislature came together to waive the waiting period to collect unemployment and are thankful that the federal stimulus package will increase weekly unemployment payments significantly and help many businesses retain their workers during the crisis.
But to stay afloat long enough to reopen businesses and restore employees’ positions and hours, we need additional support. That’s why, on behalf of the restaurant, retail, and personal-service sector, we’re asking the governor and the Legislature to make commercial rent relief for shuttered and seriously impacted businesses a priority in the coronavirus bills now being drafted.
We have focused on rent relief because rent is the largest fixed cost for thousands of small businesses. It’s due every month. We add our voice to more than 80 local restaurant owners and operators who urged rent relief in a letter to Governor Baker last week. The Boston City Council is considering a rent moratorium during the crisis. Some landlords have stepped forward to waive or reduce rents and many tenants have rent abatement terms in their lease agreements that should kick in now. But business interruption insurance has, in most cases, failed to protect us, and it is increasingly clear that government support is needed to prevent the cascade of business closures we’re facing statewide.
For us, this is a question of fairness as well as survival. Without rent relief, seriously affected businesses will have to shoulder the high cost of this virus alone. By reducing rent, we can more fairly distribute the economic burden of fighting the pandemic, sharing the burden among tenants, landlords, and local governments together, so that everyone can make it through this crisis. We know that property owners have mortgages, property taxes, and other expenses, and local governments are stretched by the crisis, but a small business that can’t operate can’t afford to pay rent or taxes, and to expect it to do so is unfair.
The state should authorize an emergency tax relief program, designed to bring property owners and seriously impacted tenants, those with a significant and documented reduction in revenues, to the table and negotiate. For every $2 in rent relief offered to seriously-impacted tenants, commercial property owners would get $1 in state or local tax relief, up to a capped amount. The state could also work with banks to secure some extra flexibility on mortgage payments for participating property owners. Sharing the burden among tenants, landlords, banks, and local governments will maximize the chance that storefronts across the state can reopen for business.
The businesses most at risk fill a central and irreplaceable role in our local communities. These are the shops and galleries that define our Main Street shopping districts, the restaurants and bars at the heart of neighborhoods, and the yoga studios, gyms, and coffee shops that bring strangers together.
This is an opportunity for Massachusetts to demonstrate national leadership in supporting our shuttered small businesses and to ensure that when we are back on our feet, the local businesses that shape and support our communities will be able to reopen their doors and put people back to work.
Tiffani Faison is a chef and owner of four Boston restaurants in the Fenway. Jon Hurst is president of the Retailers Association of Massachusetts.