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March 25, 2020
Featured Article

From Long Beach, CA to Rochester, NY, we are hearing from local government colleagues about the how they are responding to COVID-19. Here’s what they’re telling us.


ORIGINALLY PUBLISHED AT
LIVINGCITIES.ORG

In Kansas City, MO: “People are coming into our office to start businesses because they don’t believe the companies they work for will make it through the COVID-19 shut down. People are preparing to have something to fall back on or are getting serious about starting their new business venture full-time due to shut downs and layoffs, or not being compensated during their quarantine.”

Meanwhile in Saint Paul, MN, staff helped to ensure that people were able to line up six feet apart when visiting the Safety and Inspections office.

As a major purchaser of goods and services, the city of Philadelphia’s procurement team is working to make sure the city contracts and purchasing needs continue in a timely manner, relaxing restrictions where necessary to respond to time-sensitive purchases.

As policy makers, service providers and employers, city governments are working around the clock to develop executive orders that provide relief and support to their residents. These efforts include convening partners to coordinate local responses and mobilizing resources for community-based organizations to mitigate the impacts of the COVID-19 pandemic. In particular, cities are undertaking an overwhelming effort to prevent the small businesses (businesses with fewer than 500 employees) from closing down to prevent loss of income and jobs to the 59 million Americans they employ.

While the U.S. Government’s Small Business Administration is taking measures to work directly with governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted, Living Cities’ staff has been impressed with municipal efforts from around the country to support their local small businesses. From relief funds and executive orders, here is a growing list that we will update regularly and that we invite you to contribute to.

The types of support to local businesses include:

  • $500-10k grants
  • 0% interest loans
  • Commercial eviction moratorium and rent freezes
  • Waivers of late payment penalties for small businesses resulting from failure to file taxes
  • Waivers on permits and licensing fees
  • Financial support for employees
  • Deferred utility payment plans

Much more is needed. In fact, much more was always needed for businesses owned by people of color. That is why many of these relief and emergency efforts to deal with COVID-19 were already pilots implemented to support businesses owned by people of color, and in turn their employees. For example, last year in our City Accelerator, the City of Atlanta began helping business owners with downpayment assistance to manage the rising commercial real estate costs. And in New Orleans, we invested in a mobilization fund to help contractors meet payroll while waiting for payments to come in.

The impact of COVID-19 shutdowns and closures cuts deep for all, but similar to seniors and those with pre-existing conditions, for small businesses owned by people of color, COVID-19 can be fatal. And the impact on their communities can be devastating. Businesses owned by people of color, sometimes referred to as MBE (minority business enterprises) or DBEs (Disadvantaged Business Enterprises), generally tend to have smaller reserves and lines of credit. MBEs are often some of the only employers and service providers in their communities and are an important element of the value chain for larger companies. As such, they tend to be hit harder after disasters hit. FEMA estimates that nationwide, 40% of small businesses never reopen after a major disaster. Those numbers are undoubtedly much higher for businesses owned by people of color. That is why strategies need to be conscious of racial disparities that existed before the pandemic.

There are lots of terrific recommendations on how we can mitigate the expected record levels of unemployment, abandoned commercial properties, and reduced availability of products and services. And most of them are race neutral. But what if local governments:

  • Contracted with local firms owned by people of color that provide direct services in support of emergency relief efforts?
  • Provided technical assistance to help businesses make quick pivots on the line of products and services they develop or sell? For example, a rum distillery in Puerto Rico has shifted its production to making rubbing alcohol and a Long Beach distillery is making hand sanitizers.
  • Maintained commercial leases through payment freezes for up to 18 months for businesses without capital reserves or strong personal/business credit?
  • In addition to commercial and residential rent freezes, partnered with banks to provide mortgage relief for business owners who use their homes as equity?
  • Provided free childcare to health care workers, essential City employees, grocery store and restaurant workers similar to Sacramento’s efforts for first responders and essential workers?

The following measures are devoted to restaurants, as they are owned by, managed by or employ a significant number of people of color and are amongst the hardest hit industries due to social distancing enforcement:

  • Free or relaxed on-street parking rules and regulations to help food establishments accommodate curbside pick-up like in Memphis.
  • Delayed or cancelled monthly meal taxes that restaurants owe to state and local governments, such as Massachusetts has.
  • Waived zoning or permit restrictions to allow restaurants to temporarily offer an alternative to overcrowded supermarkets.

Many city governments had begun to step up to shore up enterprises owned by people of color through increased procurement, investment and policy-making before the pandemic. This crisis is an opportunity for local leaders and public servants to disrupt inequities by intentionally reducing the impact of COVID-19 on communities of color. See the NAACP’s Policy Recommendations to temper the impact of the pandemic on communities of color and their Action Tool Kit.

I have been repeating these words of the poet Gwendolyn Brooks a lot these past few weeks, “we are each other’s harvest; we are each other’s business; we are each other’s magnitude and bond.” While local governments are appropriately focused on implementing emergency measures, Living Cities remains a partner by serving as a national resource and connector to local governments, as we lay the foundation for the Closing the Gaps Network to welcome cities committed to addressing the racial income and wealth gaps exacerbated by the pandemic.

Elizabeth Reynoso is Associate Director of Public Sector Innovation at Living Cities. She works on the development of public sector strategies to foster promising public practices and accelerate the uptake of innovation across the country.

Rod Miller contributed to this piece. He is author of an upcoming guide for public sector practitioners based on what we learned by working with five cities in our City Accelerator on Local Business and Job Growth. It contains tactical approaches, tools, tips and metrics and lessons learned for city governments seeking solutions to support local, diverse businesses.