For Immediate Release: July 2, 2021
LOS ANGELES -- Yesterday, a Motion presented by Councilmember Nithya Raman exploring relief options for commercial rent debt passed the Los Angeles City Council. The motion seeks avenues to support small businesses at risk of eviction due to rental debt accumulated during the city-wide lockdown in response to COVID-19. Relieving commercial rent debt may prove crucial to protecting against a new surge of small business closures in Los Angeles.
“The pandemic precipitated the closure of thousands of small businesses in our city,” said Councilmember Raman. “For those who escaped permanent closure, their only lifeline has been the moratorium on payment of rent. With this motion, we can find a path to ensure their survival past the eventual end of the moratorium.”
The legislation gives 60 days for City Departments to report on the scale of rent debt among small businesses in Los Angeles and the predicted economic effects of small business closures related to rent debt evictions, with details on potential job losses and their distribution across racial and socio-economic groups.
“My wife and I have been running our family-owned dog grooming business for over four years, but now we're hanging by a thread. Due to the pandemic, we have accumulated over $25,000 in rent debt, and I have no idea how we will repay it,” said Mr. Lee, a Korean immigrant and owner of Debbie’s Grooming in Greater Wilshire. “Despite my efforts in applying, my business has not received any aid from local or federal sources. I'm glad that Councilmember Raman takes this issue seriously and is exploring potential solutions to relieve the rent debt of small businesses.”
The Motion additionally calls for recommendations from the City on the feasible actions Council can take to support small commercial tenants, such as incentivizing landlords to renegotiate leases and providing mediation services to facilitate this renegotiation.
This week, the City Council also approved $12 million in rent relief for small businesses. Councilmember Raman lauded this first step but argued that much more action will be required from the City. : “The commercial rent relief offered by the City is one piece of ensuring a full recovery for LA’s small businesses, but it’s not nearly enough given the depth and severity of the problem. With the information in these reports, we can ensure we are pursuing all measures available to support our vibrant small business community, which is absolutely essential to the post-pandemic recovery.”