![\"Small](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/03\/37b9d9fe-aaf0-431f-98a4-d235579480f2-scaled.png\")
Juan Dela Cruz, owner of 77 Ave D Deli on the Lower East Side. (Photo by Brewer Roberts)<\/p>\nAs New York City housing costs continue to outpace incomes, the pressure ricochets through commercial corridors, pushing out some of the very businesses that define them.\u00a0<\/p>\n
Juan Dela Cruz, owner of 77 Ave D Deli on the Lower East Side. (Photo by Brewer Roberts)<\/p>\n
This story was produced as part of a\u00a0capstone\u00a0reporting project\u00a0at\u00a0NYU\u2019s Arthur L. Carter Journalism Institute, with editing by Professor Donna Borak.<\/p>\n
For decades, the 77 Ave D Deli has been one of the few constants on a block in the Lower East Side where almost everything else has turned over. Regulars call out to the owner, Juan Dela Cruz, before they even reach the counter on his tiny bodega, slipping into the familiar banter he\u2019s traded with his neighbors for 30 years.\u00a0<\/p>\n
But today, the chime of the register also masks a different rhythm: the slow squeeze that has him questioning how much longer he can hang on. His monthly rent has climbed to more than $11,000 a month, from roughly $2,000 when he first opened. Produce costs have spiked under new tariffs. Utilities and fees keep rising. And customers already drained by soaring housing costs are buying less.\u00a0\u00a0<\/p>\n
Cruz\u2019s struggle is no longer an outlier\u2014it\u2019s the new normal for New York\u2019s small businesses. As housing costs continue to outpace incomes, the pressure ricochets through commercial corridors, pushing out some of the very businesses that define them.\u00a0\u00a0<\/p>\n
The citywide storefront vacancy rate was 11.4 percent in March 2025, Department of Small Business Services officials testified to the City Council at the time<\/a>, similar to pre-pandemic levels. Manhattan had the highest vacancy rate, at 14.2 percent, followed by Brooklyn at 11.9 percent, Queens at 8.7 percent, Staten Island at 8.6 percent and 8.2 percent in the Bronx.<\/p>\n That\u2019s up from just a 4 percent citywide storefront vacancy rate back in 2004, according to the State Legislature, where lawmakers reintroduced a bill last month that would establish commercial rent control in the city<\/a>, creating a board to vote on annual rent adjustments for small business owner-renters.\u00a0<\/p>\n \u201cAs commercial rents have skyrocketed, unrestrained by any forces besides market demand, the landscape of New York City, defined so much by small businesses, has slowly been reshaped in favor of chains, eroding the character of the city in the process,\u201d reads the legislation, sponsored by Brooklyn State Sen. Julia Salazar. <\/p>\n The problem can disproportionately impact low-income communities and immigrant-owned businesses, the bill says.\u00a0But previous proposals to regulate commercials rents have failed to pass, and faced opposition from the real estate sector<\/a>. <\/p>\n Cruz has no plan if he\u2019s priced out. He cannot retreat to another borough or another neighborhood, because the same economic forces are at work there, too. \u201cThis is a Black and Latino community,\u201d he said, \u201cwhere we are \u2018unseen\u2019 and much goes unchanged.\u201d<\/p>\n Housing costs and commercial pressure move in lockstep\u00a0<\/p>\n The forces pushing Cruz out mirror the same ones reshaping his customer base.\u00a0<\/p>\n The median gross rent citywide has grown 21 percentage points faster than median renter income since 2006, according to the NYU Furman Center<\/a>. Nearly a quarter of Manhattan renters are now severely-rent burdened, spending more than half their income on housing. Once, merchants priced out of Manhattan would move to the next affordable borough, but those escape routes have closed for many due to the continuation and increase of high prices.\u00a0<\/p>\n The result: displacement radiates outward, sending longtime residents deeper into Brooklyn, into Queens, or across the river to New Jersey. <\/p>\n \u201cMy own family started being pushed out of Brooklyn in 2005,\u201d said Celestina Le\u00f3n, district manager for Brooklyn Community District 4 in Bushwick. \u201cVery few of my family members still live in the city because they didn\u2019t have stable, secure housing.\u201d<\/p>\n The trend can be seen in commercial rents, too. In Brooklyn\u2019s most desirable corridors, asking rents for retail space are as high as $245 per square foot, according to the 2024 Brooklyn Retail Report<\/a>. That\u2019s up 40 percent from a year earlier. Even modest commercial stretches saw double-digit increases.\u00a0<\/p>\n Commercial landlords, facing the chance to attract wealthier tenants, often wait out the market. That logic fuels a growing phenomenon: storefronts held intentionally vacant while owners wait for the highest bidder.<\/p>\n \u201cIf a bar can offer $10,000 in rent and the current bodega can only pay $5,000, the landlord will likely choose the higher payer,\u201d said Le\u00f3n. \u201cIt\u2019s simple economics.\u201d<\/p>\n And for the stores still operating, a tactic known as commercial tenant harassment\u2014cutting heat, ignoring repairs, sudden demands\u2014can be used to push out longtime businesses to make way for a higher-paying chain or trendy bar.\u00a0<\/p>\n New York technically outlawed this practice in 2016 under Local Law 77. But the law is largely symbolic: fewer than 30 cases have ever reached the New York Supreme Court, as small merchants lack the money, time, or legal support to sue.\u00a0<\/p>\n \u201cPoliticians who say they will do something, but they have been saying that before I got my store,\u201d Cruz said. \u201cAnd things are still getting worse, so you do the math.\u201d <\/p>\n On Bedford Avenue in Brooklyn, the same pattern is unfolding.\u00a0Demetrios Siafakas, whose family runs the Peter Pan Donut & Pastry Shop, says they\u2019ve survived only because the landlord worked with them and their customers stayed loyal even after moving away. <\/p>\n \u201cWe got lucky,\u201d he said. \u201cMany shops around us have not.\u201d<\/p>\n One of their regular customers, who overheard\u00a0Siafakas\u2019 conversation with a reporter, chimed in to share that he was among those forced to move out of the neighborhood due to rising prices. \u201cIt would be nice, but no way I have this kind of money anymore,\u201d the man said, motioning to the coffee and doughnut in his hand.<\/p>\n As rents rise, the character of streets shifts. Boutiques replace bodegas. Upscale cocktail bars take over former family-owned eateries. Many neighborhoods lose the businesses that kept them grounded\u2014and in turn, the residents who depended on them\u2014often replaced by national or global chains. Last year, apparel company Carhartt bought a 4,000 square-foot space for $11 million<\/a> on 132 Bedford Ave.<\/p>\n On Manhattan\u2019s Avenue C, Casa Adela, a beloved Puerto Rican restaurant operating for 50 years, is bracing for another rent hike. Owner Maritza Lopez was forced to raise her prices, again, this past September due to rising food and utility costs\u2014one she fears will price out her remaining regulars since the last increase.\u00a0\u00a0<\/p>\n Across the street, Lopez has watched long-term tenants disappear virtually overnight. One building was sold before it even hit the market. Around the corner, another restaurant, Rossy\u2019s Bakery, shuttered after 15 years last spring<\/a> with a \u201cFor Sale\u201d on its front door.\u00a0<\/p>\n Sink or swim<\/p>\n If COVID underscored anything, it was that neighborhood survival depends on its small businesses. \u201cThe lesson for us is that mixed-use communities are inherently more resilient,\u201d said Charles Yu, vice president of economic development at the Long Island City Partnership. \u201cWhen one part of the economy slows, others can help stabilize local activity.\u201d<\/p>\n The bodegas became a lifeline. The hardware store stayed open. The laundromat kept the block functional. These businesses weren\u2019t luxuries\u2014they were infrastructure.<\/p>\n \u201cWhen people started moving back and began working from home, more of daily life shifted closer to home as well, and that created a foundation for recovery,\u201d Yu said.<\/p>\n City Hall has tried to ease some of the pressure. The previous administration passed the City of Yes for Economic Opportunity<\/a>, which modernized zoning to allow a broader mix of businesses. Those changes helped reopen 8,850<\/a> new storefronts, including 500 that might have stayed vacant under old zoning rules, officials said last year. <\/p>\n When running for office, Mamdani <\/a>said he would fix systematic flaws that drive up costs for small businesses, including rapidly rising utility rates. Since being in office, he signed an executive order to ease rules and fees for small business owners.\u00a0<\/a><\/p>\n \u201cYou cannot tell the story of New York without our small businesses,\u201d Mamdani<\/a> said at the time.<\/p>\n But on the ground, the limits of the current policies are plain.\u00a0<\/p>\n \u201cThere is really nothing we can do about commercial rents directly,\u201d said Susan Stetzer, district manager for Manhattan Community Board 3, which spans the Lower East Side and part of Chinatown. \u201cThe city has regulations for affordable housing tied to tax benefits, but nothing equivalent for commercial spaces.\u201d\u00a0<\/p>\n To reach the editor, contact [email\u00a0protected]<\/a><\/p>\n![\"Rents](\"https:\/\/citylimits.org\/wp-content\/plugins\/trx_addons\/components\/lazy-load\/images\/placeholder.png\")
Source: American Community Survey, NYU Furman Center<\/p>\nCasa Adela in December. (Photo by Brewer Roberts)<\/p>\n