On March 7th, Covid-19 struck Washington, D.C. Four months later, the City has more than ten thousand cases, with a death count well over 500. The virus has insinuated itself into every financial system of the City. The D.C. Policy Center is reporting on the pandemic economy, and its terrible toll on small businesses.
Many D.C. entrepreneurs work in the hard-hit food and hospitality sphere, professional services, and the arts. Since March, some four in ten restaurants have closed. Those struggling to stay open have made substantial modifications. Many of their workers face unbearable rent and health insurance costs.
Even solopreneurs working remotely are feeling the pain. Independent content writers and local media contributors face increasing risks, as many of their clients and supporters are part of the small business community.
Responses From the Mayor and Council
A surge of pre-Covid activism resulted in D.C.’s new Universal Paid Leave Amendment. From July forward, D.C. businesses must offer workers two weeks of paid medical leave annually. After the pandemic took hold, the City also initiated several emergency provisions:
- A moratorium on late fees and evictions for commercial tenants.
- A freeze on commercial rents.
- Expanded unemployment benefits.
In addition, the City disbursed a number of microgrants — accessible cash injections for struggling small businesses — within its $25 million grant initiative.
Funds, of course, are finite. In April, Mayor Bowser signed an executive order implementing a government hiring freeze. The City is now poised to cut hundreds of millions from its next budget.
D.C. is already dealing with an income shortfall of more than $700 million for FY 2020, and revenues for FY 2021 are now forecast at $774 million less than predicted in pre-pandemic times.
Worse still, an enlarged deficit could ultimately bring back a control board, as WAMU pointed out, putting the Trump administration in charge of D.C. Is the Trump administration itself guiding D.C. into the trap? D.C. has so far received $750 million less from the federal CARES Act than expected, because Senate Republicans saw fit to deem D.C. a territory, cutting its funding to half of what a state would get.
Securing Our Futures
Mayor Bowser’s office has formed a ReOpen D.C. Advisory Group to return the City to work once the virus threat has sufficiently diminished. But one of the biggest threats to small business owners is reopening itself — in severe debt, and months behind in rent. The D.C. Policy Center observes that some small businesses are going month-to-month, trying not to commit to annual lease renewals.
So, what do small businesses need now, if they’re to survive the months and years ahead? Mainly, they need:
- Rent forgiveness, not delayed deadlines.
- Payroll tax abatement, to empower the small business community to retain staff.
- Relaxed loan approval criteria for commercial and residential loans.
- Interest charge waivers, at least until the virus threat has substantially diminished.
Laid off and precarious workers need rent abatement and creative access to interest-free financing. And because venture capital or bank loans do not always find their way to them, Black-owned businesses need support on a personal level. Most working people — migrants included, and gig workers, too — need to be acknowledged and assisted with rent, payroll, insurance, and other basic expenses.
Small business organizations and community residents have stepped up to fill gaps in government policies. Consider the Adams Morgan Partnership Business Improvement District, which reports that small business owners are coping with “up to an 80% drop-off in customers.” The nonprofit group promotes the #BuyRestaurantBonds campaign. Customers can purchase gift cards from struggling or closed businesses, then redeem them if they wish when a restaurant is back up and running.
Those who can afford to support any small and independent businesses can take the cue, and offer support where we can. The time is always right for dynamic empathy and mutual aid. But the need has never been more urgent than it is right now.
Colbert I. King, Opinion: Covid-19 Has Delivered a Sudden End to D.C.’s Booming Economy, Washington Post (April 10, 2020).
Ally Schweitzer, What A Second Wave Of COVID-19 Would Mean For The Local Economy, WAMU (June 3, 2020).
Kathryn Zickuhr, How COVID-19 Is Affecting Small Businesses in D.C., D.C. Policy Center (April 30, 2020).