The free use of public sidewalks and streets by restaurants during the pandemic is about to come to an end as New York City lawmakers work to finalize a highly anticipated bill that will make outdoor dining permanent and transform the landscape of the city.
But the question is at what cost?
As part of the legislation, the City Council is expected to address the issue of how much restaurants should pay to use sidewalks and streets. The regulation could price city sidewalks and streets in the tens of thousands of dollars, adding another revenue generator for the city. It also comes as other cities, including Boston and Los Angeles, face backlash from restaurant owners over fees.
The urgency to establish a permanent program is growing as spring approaches. The Council is expected to develop an array of rules from design standards to seasons of operation. Negotiations over the final bill are underway between the Council and Adams administration.
Reading the tea leaves has been difficult. Reached for comment, both the mayor's office and Council declined to share their discussions. Council Speaker Adrienne Adams is set to deliver her State of the City speech on Wednesday, though there are no indications she will discuss the status of the bill.
According to recent reports, the arguments have ranged from which agency will run the program to whether outdoor dining structures will be allowed to operate year round.
The pricing element adds another wrinkle to the battle over public space that is driving the debate over outdoor dining. For opponents, there may be no price high enough for forcing residents to endure the noise and rodents associated with the dining sheds.
But transit and public space policy experts say that putting a price on curbside parking spots that currently comes at little or no cost for drivers is a welcome shift that recognizes the scarcity and value of public spaces.
“We basically give away the roadway right now for parking,” said Matthew Clarke, executive director of the Design Trust for Public Spaces, a nonprofit advocacy group. “For people who use those streets, what’s the cost of that, if any? And how do we support uses that we want to encourage, but also structure these around use of the street in a way that's fair and equitable?”
Prior to the pandemic, consent fees — the rent the city charges private businesses — for a 150 square foot sidewalk space cost $5,800 annually for a restaurant below 96th Street to the tip of Lower Manhattan, and $4,400 outside that area, according to a 2018 document from the city's Department of Consumer Affairs.
On top of that, business owners were required to pay $510 for a two-year license.
Consent fees for larger spaces can reach into the tens of thousands of dollars, with a 500 square foot sidewalk cafe costing nearly $20,000 annually in the most expensive areas in Manhattan, and $15,000 elsewhere.
If I can have this restaurant full and my outdoor dining full on a weekend, that's an additional server, a busser, and a person in the kitchen. Those are jobs.
During the pandemic, former Mayor Bill de Blasio waived the payments as a way of helping restaurants survive at a time when indoor dining was temporarily suspended. According to the city, the free outdoor dining program saved almost 11,000 restaurants and roughly 100,000 jobs.
Restaurant owners point out that they contribute to the city’s economy by paying taxes and employing immigrants and low-wage workers. In that context, they say the trade-off between street parking and outdoor dining seems more than fair.
“A car can park in a space maybe for a few hours, but we're talking about keeping somebody actually employed,” said Susannah Koteen, who owns three restaurants in Harlem. “If I can have this restaurant full and my outdoor dining full on a weekend, that's an additional server, a busser and a person in the kitchen. Those are jobs.”
Demand for outdoor dining space is expected to be great. Nearly 13,000 restaurants are participating in the city’s outdoor dining program.
In addition to considering the needs of restaurants and residents, the Council must weigh the costs of running the program as well as the value of generating a revenue stream that could fund other priorities.
“The city’s tax dollars do pay for a lot of important services,” said Kate Slevin, executive vice president at the Regional Plan Association, a nonprofit civic organization. “So I think that's one of the balancing acts that the Council is going to have to find here.”
But for the restaurant industry, the fees are coming at a moment where many are still cash-strapped or debt-ridden from the losses suffered during the pandemic.
“The city has a long history of using small businesses as an ATM,” said Andrew Rigie, executive director of the New York City Hospitality Alliance.
Rigie is joining public space advocates in urging the Council to make outdoor dining affordable to smaller restaurants by using a sliding permit scale and a cap on consent fees.
Although the bill is still in flux, the current version of the legislation proposes permit fees for sidewalk cafes similar to what they were before the pandemic. However, it caps the cost of permit for a “small sidewalk cafe” at $225 per license period.
If you price small businesses out of it, they’re not going to have it.
For roadway dining, the proposed fee is $255 per license period.
But the bigger question is how large the consent fees will be. As currently written, the Council bill states that consent fees for sidewalk cafes will be determined by a formula through the city’s rulemaking process. It does, however, specify that those for “small sidewalk cafes” shall not exceed $1,000.
The bill does not specify the consent fee process for roadway cafes.
There is one catch with the city’s rulemaking process that worries the restaurant industry. The agency in charge could potentially increase the fees over time without input from the Council.
Rigie pointed out that city lawmakers often say they want to build a more inclusive recovery.
“If you price small businesses out of it, they’re not going to have it,” he said.
