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

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

graph-arrows2Olivia LaVecchia and Stacy Mitchell
April 2016

Executive Summary
The cost of leasing commercial space is soaring in many U.S.cities,threatening the future of independent businesses.In cities as diverse as Oakland and Nashville,Milwaukee 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 have been serving the everyday needs of their communities, sometimes for generations,are being forced out and replaced by national chains that can negotiate better rents or afford to subsidize a high-visibility location.In ILSR’s 2016 Independent Business Survey,59 percent of independent retailers reported being worried about the escalating cost of rent,with one in four describing it as a top challenge.The trend isn’t limited to retailers.The price of industrial space is rising rapidly too,jeopardizing a budding renaissance in urban manufacturing.This report examines what’s causing commercial rents to skyrocket and explores six broad policy strategies that elected officials and community leaders are proposing to address it.We find that the sharp rise in rents isn’t limited to affluent neighborhoods.It’s happening across a range of communities,with some of the most intense pressure falling on businesses in lower income neighborhoods.The problem is especially detrimental to people looking to start new businesses,further raising barriers to entrepreneurship and stunting economic dynamism.

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

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