Main Street retailers that define the character of Massachusetts’ 351 cities and towns are teetering on the brink of ruin without a state program providing rent relief.
Thousands of small businesses across Massachusetts were forced to close their doors by government mandate in response to the COVID-19 pandemic. Now, they face the possibility of never opening those doors again. Unable to continue operations, incoming revenue for these businesses has either been completely cut off or significantly reduced.
And yet their financial obligations continue to mount, including rent which is the largest fixed cost for most businesses, and it’s due every month. Government action and cooperation between tenants and property owners on rent relief is needed now to put these small businesses in the best position to reopen their doors once this emergency is over.
To date, small businesses have been focusing on protecting the well-being of their workforce. Restrictions on operations have forced small businesses owners to make tough decisions to reduce hours, furlough workers and lay off staff due to the lack of revenue to make payroll. Fortunately, various state and federal programs have been created for individuals, businesses and state governments, to help provide payroll relief and assist in the retention of workers.
Yet, programs to provide similar relief to cash–strapped businesses on rent have yet to materialize, leaving small businesses at the mercy of their landlords to provide flexibility voluntarily. Some landlords have already waived or reduced rent and many tenants have rent abatement terms in their lease agreements that should kick in now. However, a recent survey of the RAM membership indicated that only 50 percent of small businesses have successfully requested and received voluntary flexibility on rent from their landlord.
With half of our small businesses currently without recourse, the time is now for the adoption of a state–wide rent relief program to maximize the possibility of survival for all impacted small businesses. It would also ensure that existing workforce relief investments have not been made in vain in the event a small business taking advantage of them closes for good.
Inequitable Distribution of Burden
This is also an issue of fairness. This pandemic affects all of us, yet through no fault of their own, a disproportionate economic burden has been placed on our small businesses. By sharing this burden among tenants, landlords, banks and local governments a more equitable distribution can be achieved, giving everyone a chance of making it through this crisis. In doing so, we all will also benefit from a more robust and resilient economic recovery.
Failure to take action however will result in dark store fronts and empty Main Street properties. In turn, for each small business closed for good, there will be a property owner unable to make a mortgage payment, pay property taxes or other expenses, and a reduction in property tax revenue for local governments already stretched thin by this pandemic. Simply put, the economic burden currently borne by small businesses will ultimately shift to those we are now asking for help, but the revenue sources they need to meet their obligations, their tenants, will no longer be available.
Jon Hurst
The businesses most at risk are those that provide character and define our Main Streets. They are one-of-a-kind establishments that make each of our 351 cities and towns in Massachusetts unique, provide important employment opportunities to our neighbors, families and friends, and support our communities. It is now time for us as a commonwealth to provide support to them.
Massachusetts should take the lead nationally in providing rent relief to our struggling small businesses so they are prepared to reopen their doors and put people back to work when the time comes.
Jon Hurst is the president of the Retailers Association of Massachusetts.
