“Small businesses are part of what makes our communities special. Think of any neighborhood and you immediately think of a favorite local business. They hire locally and keep District dollars local,” said Councilmember Allen. “Small business owners are raising the alarm that the rent is too high and we’ve seen some businesses already forced to close their doors. These are the businesses and people who made DC what it is today.”
Today, Councilmember Charles Allen (Ward 6) introduced two bills aimed at supporting both long-time and new small and local businesses in succeeding in the District of Columbia.
Small and Local Business Assistance Amendment Act of 2019
This bill aims to ease the burden of rising property taxes that small business owners report as one of the most significant rising costs to doing business in the District of Columbia in three ways.
First, it creates a tax credit of 20 percent (capped at $10,000 annually) for rent paid or property taxes paid by a small, local business – which closely follows the Schedule H tax deduction for residential tenants by allowing tax relief based on the amount of a tenant’s rent that go toward paying the landlord’s property taxes. This will provide relief to local businesses who are feeling the pinch when rising property taxes are passed on from the landlord to their small business tenant.
Second, it would provide property tax relief to landlords who choose to rent all or a portion of their space to small, local businesses rather than a national chain – those properties would receive a 10% relief off of the total value of the property, capped at $100,000.
Finally, it would create a Small and Local Business Credit Enhancement Program within the Department of Small and Local Business Development to provide credit enhancement services for small and local businesses. The bill specifies one program in the bill – a rent guarantee for up to three years that will provide incentive for developers to lease their space to small and local businesses. The rent guarantees would be 100% in year one, 50% in year two, and 25% year three.
“Right now, many developers find it much easier to secure financing for a project if they sign leases with national tenants – even if they’d rather work with a small and local business. I want to change their calculation so that DC’s entrepreneurs and small business owners are the best option,” said Councilmember Allen.
The bill was co-introduced by Councilmembers McDuffie, Todd, Trayon White, Robert White, Nadeau, and Evans. It was co-sponsored by Councilmembers Silverman and Grosso.
Longtime Resident Business Preservation Amendment Act of 2019
This bill would provide assistance for “longtime resident businesses” that have been operating in the District for at least 20 years, or 15 years in the case of smaller businesses.
Businesses would have to show their continuous operation and support from the community it has served. Businesses that meet the criteria would be placed on a registry and be eligible for:
- grants up to $1.5 million or low-interest loans up to $2 million for repair or replacement of historic signs and facades or heavy equipment, other capital improvements, and operating costs and approved by the Department of Small and Local Business Development;
- rent stabilization payments of up to 10 percent of the average commercial rent for the census tract, if the longtime business is at a substantial risk of displacement.
This was inspired by a legacy business program in San Francisco. The District started a similar grant program this year, but this legislation would greatly expand the eligible businesses and the benefits provided. It would create a fund to provide the capital for grants and loans.
The bill was co-introduced by Councilmembers McDuffie, Todd, Evans, Robert White, Nadeau, Trayon White, Bonds, and Cheh. The bill was co-sponsored by Councilmembers Silverman and Grosso.