Many restaurant owners fear the approval of Intro 1116, to expand street cart permits, will oversaturate an already struggling market. Meanwhile, advocates and council members provide reassurance.
For Lee Seinfeld, owner two bars on Amsterdam Avenue, the time when he could afford fifty employees is a distant memory. Today, he has to make do with three, if his bar is open at all. “And I haven’t drawn a salary in a year,” he says.
With the anniversary of the first pandemic-related closures around the corner, Seinfeld has lost all hope in the future of New York’s restaurant industry, and he fears that his neighborhood, which he has seen prosper over the last four decades, will never be the same. Government support is lagging, leaving business owners at the mercy of their landlords. The Paycheck Protection Program loans that helped them through the first months of lockdown are long gone. While Seinfeld and some of his fellow business owners were lucky enough to arrange deals with landlords to cut rent costs, he knows the agreements cannot last forever. “They’re reducing it, not forgiving it,” he says. “When all of this is over, some of us will have hundreds of thousands of dollars in debt.”
Most analysts would agree with Seinfeld’s bleak assessment: it may be years before the city’s restaurant industry recovers. But there’s another concern which has Seinfeld feeling even more dispirited: Intro 1116, a bill approved by the City Council in late January. The measure will allow 4,000 new street vending permits over the next decade, lifting a cap that was established more than 35 years ago. Since then, an underground market for vending licenses has flourished, with some vendors paying exorbitant prices to rent them illegally. According to an estimate by The Street Vendor Project, only 15% of vendors operating today own a legal permit. The vote was welcomed as an important win by councilmembers, vendors and their advocates.
For Seinfeld, it’s a simple equation: more vendors mean more competition for fewer dining dollars. Jerome Barth, President of the Fifth Avenue Association, a consortium representing businesses in downtown Manhattan, agrees. “Vendors and stores operate on different sets of rules and costs, and the pandemic has made it impossible for restaurants to pay the bills. It’s a completely separate economic environment.”
The latest estimates confirm Barth’s assessment. In September, Bloomberg estimated more than 4,000 pandemic-related business closures, based on Yelp listings. Of these, restaurants and hospitality services have been hit the hardest. The New York City Economic Summary for February 2021 reports a 47% year-to-year drop in employment in the field. The public health pressures, the lack of foot traffic — as well as ever-changing, contradictory dining protocols — all have combined to make the situation untenable for thousands of restaurants across the city. Well aware of the grim situation, advocacy groups have been pushing relentlessly for support from the legislature, demanding the inclusion of a rent relief program in the 2021 state budget plan. The relief, however, is yet to come.
In this context, Intro 1116 has been interpreted as yet another blow to a struggling industry. For Jeffrey Bank, CEO of Alicart, which operates three restaurants across New York, allowing new permits in the midst of a pandemic “is like kicking someone when they’re down.”
Naturally, those who have spent years advocating for a broad reform of street vendor licensing in New York view the matter differently. The scope of Intro 1116 goes beyond the simple introduction of new vending permits. It aims to revamp a system that has been unchanged since 1983, and which is, according to critics, out of touch with the current reality of the restaurant and dining industry in New York. Council members have been crafting the bill for years, attempting to carefully balance the interests of both restaurant owners and vendors. Helen Rosenthal, the representative for Manhattan District 6, who co-sponsored the bill, says the widespread alarm surrounding it is largely a result of misinformation. In fact, she confirmed that areas will be thoroughly inspected before new permits are issued to prospective vendors, to make sure restaurants and food service businesses are protected. In addition, the bill creates an advisory board, which will allow restaurant owners a forum to voice their opinions.
Justin Brennan, a council member from Brooklyn’s District 43, expressed his understanding of the struggle of brick-and-mortar businesses, but hurried to reassure restaurateurs that, given time, Intro 1116 will play in everyone’s favor. Historically, regulation of street vending has been inconsistent and spotty. Under the current guidelines, the police department is charged with enforcement, but the rules are complex and often unclear, resulting in unfairness toward both business owners and vendors. Instead, the bill proposes the creation of a civilian Office of Street Vendor Enforcement, which will ensure annual inspection of 75% of vendors, focusing on areas with a high concentration of food businesses and grocery stores.
“Right now, it’s basically the Wild West out there for our food carts. Having a dedicated enforcement unit is what we needed for a long time,” Brennan said.
The experiences of many street vendors bear this out, and shed light on the drawbacks of the current system. Hui Jun Wang, who used to run a Chinese barbecue cart in Flushing, Queens, told the Street Vendor Project that she paid a total of $280,000 for her illegal vending permit. She and her sons were targeted by the police several times, but because they speak little English, they could never understand why. When the NYPD confiscated their permit in 2016, they had to turn to the informal market, incurring even more expenses. But Hui was among the few lucky ones. Eventually, she saved enough money to be able to rent a storefront, and was immensely relieved to be able to manage her business legally.
In 2019, a viral video of NYPD officers cuffing and harassing the “Churro Lady”, as she became known, sparked outrage about the hostility of law enforcement toward vendors. “She’s just trying to sell some stuff,” says the person recording the video, “she’s powerless.”
The pandemic has only exacerbated the situation, creating even more instability for these workers, who generally lack social and legal protection in their employment. According to a survey conducted by WIEGO — a network for the advancement of the working poor in the informal economy, especially women — 98% of respondents reported zero income in March and April of 2020. By June, 79% were still reporting no profits. Vendors were left in complete uncertainty, as access to government relief programs was limited, too. As WIEGO notes, most vendors did not qualify for programs such as Payroll Protection or Economic Injury Disaster Loans (EIDL) because they were self-employed, lacked payroll or documentation. “The gist is that 1.2 million New Yorkers haven’t received any unemployment support,” said Josh Bloom, community organizer of the group Jews for Racial and Economic Justice, which has played an active role in advocating for Intro 1116. “If the point is to keep people home not to spread the virus, why are we leaving them out on the streets?”
Many restaurant and small business owners showed understanding for the struggle of vendors. More than 60 of them co-signed a letter to speaker Johnson in support of Intro 1116. Among them was Marlow Collective, a restaurant group based in Brooklyn. “Ultimately, the idea that a street vendor is a deterrent for a restaurant is a scarcity mindset,” says Elizabeth Murray, Marlow’s HR director. In her words, the two complement each other, maintaining the vibrancy of commercial districts.
There is evidence to back this up. A handful of studies have attempted to analyze the relationship between the two business models in New York City, revealing that commercial corridors generally benefit from the presence of food carts, empowering restaurants too. For example, City Limits documented that on Brooklyn’s Fulton Street, when vendors were removed in 2001, brick-and-mortar food stores reported a 20% decline in sales. While advocating for Intro 1116, Josh Bloom of Jews for Racial and Economic Justice heard a lot about the importance of having vendors on the streets. “They bring more pedestrians into commercial areas and increase economic activity, so it’s in the interest of restaurants to have them around,” he says. “Moreover, seeing people on the streets, lining up for food from a cart, creates a sense of safety in a neighborhood.”
A resolution between the grievances of restaurant owners and the needs of street vendors may not come until the city’s financial system, more broadly — and its hospitality industry in particular — recovers. In today’s shattered economy, the fine line dividing brick-and-mortar businesses from street carts has become even thinner.
As a growing number of people have lost their jobs due to the pandemic, informal street vending has turned into a form of “creative resiliency”, a way to make ends meet. Even Hui Jun Wang, whose restaurant was receiving positive feedback, was unable to cope with rent prices, and, in the summer of 2020, was left with no choice but to begin selling from her cart again. The crisis has been equally harsh on both vendors and restaurant owners, revealing that they are, ultimately, all in the same boat.