Rent suffocates small businesses: «There are costs that they simply cannot compensate»

The increase in rents, both for housing and for commercial premises, is generating a major problem for the survival of small businesses. The Union of Workers’ Associations Self-Employed and Entrepreneurs (UATAE) warns that the increase in prices is subjecting thousands of self-employed workers to pressure that is increasingly difficult to assume, especially in large cities and in those areas where rents have registered greater increases.

UATAE calls for a joint approach to two problems that are usually analysed separately. For a self-employed person who needs an establishment to carry out their activity, the rent expense does not end at the door of their house: each month they must also bear the cost of the space in which they work. «You can sell more, work more hours or try to adjust expenses, but there are fixed costs that have reached a level that a small business simply cannot compensate,» says María José Landaburu, general secretary of UATAE.

THE IMPACT ON NEIGHBOURHOOD COMMERCE

The situation especially affects commerce, hospitality, hairdressers, workshops and numerous local services that need a physical space and cannot transfer their activity to a home or develop it exclusively online. UATAE warns that the price of premises is also modifying the commercial fabric of many neighbourhoods. When a traditional activity closes and the rental of the premises is unaffordable for another business, the chances of it being occupied again by an independent activity decrease.

«When a bookshop, a hardware store, a greengrocer or a bar disappears because it cannot pay the rent, we are not only talking about the closure of a business,» says Landaburu. «We are also changing the neighbourhood and recovering that fabric afterwards is extraordinarily difficult.» The organisation considers the effect that this situation has on those who want to start an activity to be particularly worrying.

In addition to the investment necessary to start a business, there are deposits, guarantees, renovations and rents that can turn access to a premises into the first major barrier before even raising the shutter.

UATAE CALLS FOR MEASURES TO CURB THE PROBLEM

For this reason, UATAE calls for opening the debate on the commercial rental market and studying specific measures to protect the continuity of small businesses and local activities. Among them, it proposes policies that encourage the release of empty premises on the market at reasonable prices, public or municipal intermediation mechanisms, aid linked to the maintenance of activities considered essential for neighbourhoods and greater use of the stock of publicly-owned premises.

The organization also calls for housing policies to take into account the reality of self-employed workers, whose income can vary considerably from month to month and who encounter added difficulties in proving their solvency despite having economically viable activities.

«We are talking a lot about who can afford to live in our cities, and it is essential to do so, but we have to start asking ourselves also who can afford to work in them,» says Landaburu.

For UATAE, both issues are increasingly related. If workers cannot afford the cost of housing and small businesses cannot afford to rent premises, cities end up expelling both those who live in them and a large part of the activities that serve them.