Rent increases are hurting small businesses across much of the United States, according to a recent Bank of America Institute survey. These difficulties are forcing some small business owners to consider new locations.
Last Data from Bank of America InstituteA recent US study, released in June, showed that about 43% of small businesses in the United States are unable to pay their rent in full on time. This is the highest level since the height of the Covid-19 pandemic in March 2021.
The rental problems faced by small businesses are largely concentrated in major cities, especially in the western part of the country, including Las Vegas, San Diego, and Denver. Some cities along the East Coast, such as Washington, D.C., also have similar problems.
Although these cities offer a lot of consumer traffic and other benefits to businesses, high rents have prompted some business owners to consider relocating.
Tim Baca, owner of Denver Crystal and Gems in Denver, Colorado, is one of the small business owners considering moving because of high rent. He told Fox Business,“I’ve also been looking at other states because there’s a lot of people moving from Colorado, from Denver, a lot of businesses, because the price is so high to run a business.”
Moving to a new city is a big change for a small business. But rent is often the biggest expense, so high costs in this area can make it nearly impossible for businesses to make a profit.
Inflation is driving up costs in many areas. But small businesses provide significant value to the communities they serve. So if they end up being pushed out of certain markets by high rents, communities and customers could suffer. However, if cities address this issue, or if rents start to fall as small businesses move to less expensive locations, it could open up more affordable options again.
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