The Street Vendor Opportunity BillA Proposal to Increase Economic Development and Promote Small

Business Growth by Revising NYC Laws on Street Vending

Introduction

Since 1866, when the first peddlers parked their pushcarts on Hester Street on theLower East Side, street vendors have been a hallmark of New York City.1 Wave afterwave of immigrants and entry-level entrepreneurs have used vending as asteppingstone to success on their way to realizing the American Dream.2 The primarilyJewish and Italian peddlers of yesteryear have today been replaced by Egyptians,Chinese, Mexicans, African-Americans, and many others–but vendors continue to be asymbol of our city’s ambition and culturalvibrancy.3 For the millions of loyal customerswho patronize them daily for their friendliness, convenience and low prices, streetvendors are also an indispensable part of life in our city.4

As long as there have been vendors in New York, however, merchants and real estateowners have sought to drive them off the streets.5 Over the past twenty years, thesebusiness interests have united into powerful Business Improvement Districts (BIDs),which have campaigned to limit vending to unprecedented levels. Big businesses, manyof which can trace their roots to the street, have pulled up the ladder behind them.6 At

1 See Suzanne Wasserman, The Good Old Days of Poverty: The Battle Over the Fate of New York City’s Lower East Side During the Depression, May 1990, at 168 (Attachment 1).2 See Balancing Safety and Sales on City Streets, New York City Department of Consumer Affairs, February 1991, at4 (Attachment 2); Karen Kreps, The Road to Riches: Success Can Start in the Street, N.Y. Daily News, January 6,1981 (Attachment 3).3 See Deborah Sontag, Unlicensed Vendors, Unfettered Dreams, N.Y. Times, June 14, 1993 (Attachment 4); PeterBlauner, Out of Africa: the Senegalese Peddlers of New York, New York Magazine, February 16, 1987 (Attachment5). Street vending has become a source of economic self-sufficiency and black pride in the African Americancommunity. See Regina Austin, “An Honest Living”: Street Vendors,Municipal Regulation, and the Black PublicSphere, 103 Yale L.J. 2119 (1994) (Attachment 6).4 A wealth of evidence demonstrates that, unlike big businesses, everyday New Yorkers love street vendors. A 2001survey of 834 New Yorkers found such wide broad support for street vendors that the vast majority of respondentswere opposed to police enforcement against them. See Crime, Police and the Community: A report by the CitizensCrime Commission of New York City, July 2001 (available upon request); Joseph Dolman,Rudy’s War on Vendors Is a Street Crime, Newsday, June 23, 1999 (Attachment 7) (describing the diverse range of New Yorkers, “from CEOs in their $2,000 suits to bike messengers in their spandex,” who line up for coffee from a vendor every morning); TrineGlever, Midtown Munchers, N.Y. Daily News, August 24, 1994 (Attachment 8) (interviewing New Yorkers aboutvendors); Wendell Jamieson, Golden Jeered in Street Vendor Raid, Newsday, July 24, 1991 (Attachment 9)(describing how New Yorkers came the defense of the vendors during a raid by Brooklyn Borough President HowardGolden); Dave Goldiner, City ban to cart off vendors, N.Y. Daily News, May 24, 1998 (Attachment 10) (“Many New Yorkers consider the carts an irreplaceable part of their lunchtime routine”). 5 See Daniel Bluestone, The Pushcart Evil: Peddlers, Merchants and New York City’s Streets, 1890-1940, Journal ofUrban History, November 1991 (Attachment 11); The Good Old Days of Poverty, supra note 1.6 See New York in Transition: Itinerant Peddlers and Vendors Everywhere, New York City Department of BusinessServices, November 1992 (noting that the founders of Sears & Roebuck and Gimbel’s department stores got their start vending) (available upon request); Sam Osman, Will a Peddler Be the Next R.H. Macy?, Newsday, August 17,1993 (Attachment 12).

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their urging, the City Council has restricted vending licenses, declared vast areas of thecity off-limits to vending, and raised vending fines to exorbitant levels. So manyobstacles have been put in place that street vending is no longer a viable path towardupward economic mobility.7

The Street Vendor Opportunity Bill8 will promote economic growth and small businessdevelopment by establishing a system whereby hard-working people can once againmake an honest living on the street. First, the Bill will revise the licensing cap to bringinto the system those vendors who are already on the street, but without licenses. Thiswill increase tax and licensing revenue to the city, reduce sidewalk congestion, andease the enforcement burden on the NYPD. Second, the Bill will establish a sensibleand objective system, in line with current city standards, for determining which sidewalksare too congested to allow vending. Finally, the Bill will adjust the penalty schedule tomake the fines paid by vendors more in line with fines paid by other small businesses.

License Restrictions

At the urging of merchant associations and chambers of commerce, in 1979 and 1983the City Council put limits, for the first time in New York City history, on the number ofvending licenses and permits issued.9 Food vending permits were reduced drastically,from almost 12,000 to only 3,000 –despite the fact that an estimated 25,000 pushcartsonce roamed our city’s streets.10 Merchandise licenses were arbitrarily capped at 853 –despite the fact that other large cities such as Los Angeles, Chicago, and Washington,D.C. do not have license ceilings.11 The vending community, which has always beenmade up primarily of recent immigrants and people of color, did not have enoughpolitical influence to oppose this dramatic assault on their livelihoods.12

These artificial ceilings have created such a long waiting list that that the Department ofConsumer Affairs (DCA) has not even taken new names since 1991. The limits havealso been counterproductive. While the big businesses that fought for the ban sought toreduce competition from vendors, many studies have since shown that vendors actuallyhelp the stores by drawing shoppers to commercial districts.13 Additionally, rather than

7 See Mariam Sami,Vendors Can’t Buy A Spot, N.Y. Times, August 24, 1997 (Attachment 13) (quoting a vendor whohad been driven from his vending spot and was planningto go back to Morocco: “I am an American citizen in the land of opportunity, but there isn’t any”). 8 See Street Vendor Opportunity Bill (Attachment 14)9 See Local Law 50 of 1979 (Attachment 15), Local Law 17 of 1983 (Attachment 16). Both laws were proposed by thebusiness community and passed at their urging. See Jill Smolowe, Merchants Propose a New Ban on StreetPeddlers, N.Y. Times, December 1, 1980 (Attachment 17); Memo from Susan Heilbron to Mayor Edward Koch re:Local Law 50 of 1979, September 7, 1979 (Attachment 18) (“faced with overwhelming support given by numerous merchant and civic groups, the Bill passed”). 10 See Barbara Ross, City & Vendors Cook up Plans to Restore Carts, N.Y. Daily News, November 27, 1994,(Attachment 19); New York Food Museum, www.nyfoodmuseum.org (Attachment 20).11 See Balancing Safety and Sales on City Streets supra note 2 at Attachment 2. Also, United States military veteransare not subject to the city’s licensing cap. SeeNY General Business Law, Article 4, § 32 (Attachment 21).12 For example, at a public hearing for Local Law 50 of 1979, not one vendor spoke out against the bill. See Transcriptof Public Hearing on Local Laws held before Mayor Edward I. Koch, September 7, 1979 at 4. (Attachment 22)13 Unfair competition is the most common complaint big businesses have against vendors. See Testimony of CaroleDevitt, New York State Food Merchants Association, August 20, 1979 (Attachment 23) (“food vendors compete

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easing sidewalk crowding, as the merchant associations had wished, the cap createscongestion by inviting a proliferation of unlicensed vendors. With no incentive to obeythe numerous time, place and manner regulations the city places on license-holders,unlicensed vendors tend to congregate in the most congested areas of the city, wherethey can sell their wares quickly while evading arrest.14

Numerous studies, including two city reports, have concluded that raising the licensingcap is a good idea.15 First, it will create jobs and stimulate economic development bypromoting entry-level entrepreneurship across the city. A recent report by the Center foran Urban Future recommended that the city reduce barriers to entry for immigrant andminority-owned small businesses, which are a vital engine for economic growth.16

Second, lifting the cap will increase city revenues from sales taxes and licensing fees.While licensed vendors are required to pay sales taxes before renewing their licenses,unlicensed vendors have no such incentive.17 Thus, by granting licenses to people whoare already vending, the city stands to collect up to $25 million every year in additionaltax proceeds as well as $2 million in licensing fees.18

Finally, raising the cap will minimize the significant strain on police resources that iscaused by criminal enforcement against unlicensed vendors. The NYPD arrests morethan 7,500 illegal vendors each year, costing as much as $15 million and furtherclogging our already overburdened criminal justice system.19 Rather than arresting andbooking these vendors, police resources can be better spent enforcing the numeroustime, place and manner restrictions that already exist to control sidewalk congestion.

unfairly with retail grocers who must comply with many regulations which vendors avoid”); George E. Jordan, 125th

Street Battle, Newsday, December 21, 1992 (Attachment 24) (referencing store owners who believe that vendors,who don’t pay overhead, compete unfairly with their prices); Isaac Armony, Merchants vs. Hobo Peddlers, N.Y.Downtown News, December 8, 1969 (“’Those peddlers are taking our business away,’ claim many storeowners”) (Attachment 25). However, many studies have shown that vendors actually help nearby stores. See John Gaber,Manhattan’s 14th Street Vendor Market: Informal Peddlers’ Complementary Relationship with New York City’s Economy, Urban Anthropology, Winter 1994 (Attachment 26); Hilary Russ, Sold Out: What happens to theneighborhood when street vendors disappear? City Limits, September/October 2002 (Attachment 27); The Good OldDays of Poverty, supra note 1 at 212 (“Ironically by 1940, the East Side business community, which had fought for ten years to remove the embarrassing pushcarts, now complained that their removal irreparably damaged their trade”). 14 See Balancing Safety and Sales on City Streets, supra note 2 at 25 (contrasting the behavior of licensed vendors,who have an incentive to obey vending regulations, and unlicensed ones, who often leave “in a hurried retreat from law enforcement”).15 See Balancing Safety and Sales on City Streets, supra note 2 at 23-27; New York in Transition, supra note 6 at 69.16 See Engine Failure: With Economic Woes That Go Well Beyond 9/11, New York Needs a Bold Vision To Renewthe City’s Economy, Center for an Urban Future, September 2003 at 27-29 (Attachment 28). See also William Mellor,Is New York City Killing Entrepreneurship?, Institute for Justice Report, 1997 (Attachment 29).17 See NYC Administrative Code § 20-455 (b)(4) (“[All applications for a license] shall require…proof that the applicant has obtained … a certificate of authority designating the applicants’ sales tax identification number and a tax clearance certificate”); §17-309 (b)(4) (same).18 See Linda Ricci, Urban America: Hawking Neighborhood Justice: Unlicensed Vending in Midtown CommunityCourt, 12 Yale L. & Policy Rev 231 (1994) (citing a New York City Department of Finance estimate) (Attachment 30).19 See Testimony of Robert Hettleman to New York City Council Committee on Consumer Affairs, April 7, 2003(Attachment 31). The cost of each arrest in urban areas, inclusive of police, court, and jail resources, has beenestimated at more than $2,000. See also Jeannine Munde, City Streetfight: Vendors vs. Retailers, Daily NewsRecord, May 31, 1985 at 4 (“The police department spent approximately $3 million in 1984 ridding the city of vendors…”) (Attachment 32).

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Closing Public Space

In addition to restricting licenses, big business interests have restricted vending bygradually limiting the public areas where vendors may vend. With the goal of eliminatingvendors entirely, the BIDs have pushed the city to carry out six rounds of street closingsover the last twenty years -- in 1988, 1994, 1995, 1998, 2000, and 2004.20 More than200 streets are now closed, and the list of restricted streets stretches 29 pages long.21

Huge swaths of the city, especially in midtown and downtown Manhattan, have beendeclared off-limits, even in wide plazas with little foot traffic.22 Indeed, it often seems tovendors that they have been outlawed “in all of the areas where it is financially viable.”23

Additionally, rather than spreading vendors evenly throughout the city, street closingsoften create congestion by causing vendors to crowd together on the few blocks thatremain open to them.24

The problem with street restrictions is that the city has never established any objectivecriteria for determining which streets are too congested.25 In 1995, the Giulianiadministration established the Street Vendor Review Panel, with three membersappointed by the Mayor and one by City Council. The Review Panel was charged withdeciding which streets should be declared off-limits, but with no objective criteria, theprocess soon became an exercise in political influence. Within four years of its creation,the Review Panel closed hundreds of blocks at the request of the BIDs, without openinga single block at the request of vendors.26 Its sole City Council member called theReview Panel process an “outrage” with “no input from elected officials,” while two lower courts declared that the Panel’s decisions were “arbitrary and capricious.”27

20 See Ken Foskett, Vendors have beef with Bill limiting them, N.Y. Daily News, March 18, 1988 (quoting arepresentative of the Fifth Avenue Association that “if we had our way, they would be totally eliminated,”) (Attachment 33); Janet Allon, Vendors: Congestion vs. Digestion, October 1, 1995 (“Midtown retailers and restaurants havelobbied the city for years to restrict all street vendors”) (Attachment 34); Dan Janison, More Vendors Curbed,Newsday, June 1, 1998 (the biggest force behind [the closings] was the Downtown Alliance, a well-heeled businessgroup”) (Attachment 35); Denny Lee, To Relieve Sidewalk Crowding, City Trims Street Vendors’ Hours, N.Y, Times,January 16, 2000 (Attachment 36); Joe Mahoney, Deal to Curb Peddlers OK’D, N.Y. Daily News, February 27, 2004(describing street closings in the area around Ground Zero) (Attachment 37).21 See 6 RCNY § 2-314 (Attachment 38).22 See, e.g., Broadway between 50th and 51st Streets; Sixth Avenue between 49th and 50th Streets; Third Avenuebetween 48th and 49th Streets; Water Street between Wall and Governor Streets; Gold Street between Spruce andFrankfort Streets (Attachment 39)23 See Testimony of Elinor C. Guggenheimer before City Council Committee on Consumer Affairs, October 6, 1976(Attachment 40); Fred Kent III & Andrew Schwartz, Save the Vendors, Change the System, N.Y. Times, June 6, 1998(Attachment 41) (decrying the elimination of vending in large sections of the city, declaring that New York’s vending regulations are embarrassingly out of date compared with other American cities).24 Gretchen Dykstra, NYC Commissioner of Consumer Affairs, has acknowledged as much. See Vendor Fact Sheetsubmitted by Commissioner Gretchen Dykstra to New York City Council Committee on Consumer Affairs, April 7,2003 (Attachment 42).25 See Testimony of Elinor C. Guggenheimer, supra note 20 at 4-5.26 144 blocks in midtown and downtown alone were closed in 1998. See Frankie Edozien, City Plans Ban on FoodCarts, N.Y. Post, May 24, 1998 (Attachment 43).27 See Testimony of Council Member Noah Dear, Street Vendor Review Panel Public Hearing, December 16, 1999,pp. 20-22 (Attachment 44), See Matter of Big Apple Food Vendors’ Association v. Street Vendor Review Panel, 224A.D.2d 219 (1st Dept. 1996) (Attachment 45);Matter of Big Apple Food Vendors’ Association v. Street Vendor Review Panel, 90 N.Y.2d 402 (1997) (Attachment 46).

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The Street Vendor Opportunity Bill will take the street closing decision out of thejurisdiction of the Review Panel and give it to the Department of Transportation (DOT),which already conducts pedestrian traffic surveys.28 In fact, the DOT already usesobjective, scientific criteria to ensure that newsstands do not cause excessive sidewalkcongestion. These standards, which take into account sidewalk width and pedestrianusage during peak periods, should be used for general vendors and food vendors.29

This will remove the street closing decision from the political process, while eliminatingthe current discrepancies whereby some streets are open to one type of vendor but notthe other. 30

Next, the Bill will refine the regulations on the location of vendors’ carts andstands.31

Prior to 1977, vendors were required to stay ten feet from regular store entrances, buttwenty feet from the entrance to any “theatre, movie house, sports arena, restaurant or other place of public assembly.32” The law made a commonsense distinction betweenentrances that saw heavy traffic and those that didn’t. In 1977, at the urging of thebusiness community, City Council changed the law to require that vendors keep atwenty-foot distance from all entrances.33 The present law sweeps too broadly andleaves no room for vendors on many city streets.34 By re-establishing the rationaldistinction between these two types of entrances, which is maintained in other similarlaws regarding sidewalk clearances from building entrances, the Bill will maintain thepublic safety while giving more vendors space to vend.35

Creating Fair Penalties

Finally, the Street Vendor Opportunity Bill will better align vending penalties with thosepaid by other small business owners. By adjusting the fine structure, the Bill will ensurethat illegal activities are deterred, but that vendors’ livelihoods are not destroyed for technical violations. Over the years, vending penalties have increased disproportionatelyto other offenses. For example, the maximum fine for sidewalk obstruction by retail

28 See NYC City Charter § 2903(a)(5) (giving the DOT the duty to “collect and compile traffic data and prepare engineering studies and surveys in regard to vehicular and pedestrian traffic”). See Midtown Manhattan PedestrianNetwork Development Project, June 2000; Lower Manhattan Pedestrianization Study, November 1997 (Availableupon request).29 See 6 RCNY 2-68(b)(6) which describes the required criteria for determining levels of congestion (Attachment 47).30 See supra note 21.31 For a complete list of current restrictions on the placement of vehicles, pushcarts and stands, see § 20-465(a)-(q)(Attachment 48) and § 17-315(a)-(t)(Attachment 49).32 See Memo from Joel Morrison to the Committee on Consumer Affairs re: Int. No. 1021, April 4, 1977 (Availableupon request).33 See Local Law 77 of 1977 (Attachment 50).34 In fact, the “twenty-foot rule,” as it is known, is a leading complaint of vendors surveyed, second only to police harassment. See Results of Survey from First Annual Vendor Convention, November 18, 2003 (Attachment 51).35 For example, the law regulating newsstand location distinguishes between retail building entrances (only five feetrequired) and entrances to larger establishments like houses of worship, governmental buildings, hotels, officebuildings and theaters (fifteen feet required). See 6 RCNY 2-68(b)(5) supra note 29. Similarly, the recently amendedState law regulating disabled veteran vendors differentiates between regular commercial entrances and those to any“theatre, movie house, indoor sports arena, or place of worship or school.” See NY State General Business Law,§35a(7)(h)(Attachment 52).

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stores is $100, but vendors who obstruct the same sidewalk can be slapped with $1,000penalties.36 This type of discrepancy is unfair and unnecessary.

First, street vendors are more poorly equipped than other small businesses to pay suchoutrageous sums. The average vendor in New York makes only $80 per day, moneywhich is spent on rent, food and clothing for themselves and their families.37 At this rate,it takes many months for a vendor to earn enough to accumulate $1,000 to pay off asingle ticket. With complex vending regulations38 and arbitrary enforcement39, even law-abiding vendors get many tickets. This penalty system is too severe. Indeed, the currentfine structure has already put many hard-working vendors out of work.40

In addition, vendors earn so little money that deterrence can be achieved by lesspunitive measures. Rather than fines of up to $1,000, the Vendor Opportunity Bill willcap the maximum fine at $150, with a graduated penalty system that accumulatesviolations over a one-year period, not two years as is currently done.41 Vendors will stillbe required to pay their fines each year before renewing their licenses, guaranteeingresponsible behavior. Together, these measures will create a reasonable fine systemthat ensures compliance, while not unnecessarily crippling vendors for punitive reasons.

Finally, the Bill will take the control over penalty levels out of the hands of theEnvironmental Control Board (“ECB”), which has acted unfairly and arbitrarily toward thevending community, and give it back to City Council where it belongs. In 2003, with nonotice to vendors, the ECB quadrupled vending fines to their maximum allowable levelsunder the ranges established in the Administrative Code. A State Supreme Court judgerecently ruled that this fine increase was “unfair and clearly undemocratic” because the ECB failed to allow public input, as required by the City Charter.42 While the courtordered a temporary fine decrease, the City has announced its plans to increase them,once again, after a hearing is held on November 18, 2004. With the bad faith the ECBhas already shown vendors, such action should not be allowed. By eliminating the

36 See NYC Administrative Code § 16-122(h); See also § 20-472 (c)(2) and § 17-325, which set a range of vendingfines following a multiple offense schedule of up to $1,000 per violation (Attachment 53).37 According to a 2004 survey of 100 downtown Manhattan vendors, the average vendor earns only $11,000 per year.Report pending publication; Survey results are available upon request.38 See New York City Council Press Release, Oct. 9, 2003. Commissioner Gretchen Dykstra and Councilman PhilipReed have denounced the complexity of current vending regulations. “The regulations are so convoluted that lawyers can barely understand them,” Reed told the Committee on Consumer Affairs. In April, Dykstra stated that “the City’s vending laws are like an onion. It has many layers, and after a while, one can’t help but cry”) (Attachment 54). See also Elizabeth O’Brien, City Pays Damages to Two Soho Street Art Vendors, The Villager, July 9-15, 2004 (“Police,politicians and others have called for a revamping of the city’s complex vending laws, some of which date back to the 19th century…‘There are so many rules,’ said Rick Lee, community affairs officer for the First Precinct. “I hope they have more clear-cut guidelines and language”) (Attachment 55). 39 See Brad Hamilton, You Dirty Dogs: Big Fines Hide Flaws in Vendor Inspections, N.Y. Post, July 18, 2004 (hot dogvendor claiming to have gotten 46 tickets in six months, and continued to receive them despite his prior violationshaving been dismissed) (Attachment 56).40 See Nina Bernstein, Court Rules in Vendors’ Favor, Declaring a Fine Increase Illegal,N.Y. Times, Sept. 29, 2004(describing Peruvian hat seller who had become so fearful of getting tickets that she was forced to stop vending)(Attachment 57).41 The Sanitation and Sewer Codes aggregate penalties using a one-year term, while the Department ofTransportation Rules use only six months. See The City Record, October 15, 2004, pp. 4357-4358.42 See Ousmane v. City of New York, No. 402648/04 (order of J. Edmead, dated October 4, 2004)(Attachment 58).

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current ranges, the City Council will create a fixed and fair penalty schedule that treatsvendors as equals to other small business owners, while maintaining an effectivedeterrent system.

Conclusion

The Street Vendor Opportunity Bill will foster small business development and economicgrowth by giving vendors--our smallest of small businesses—the tools they need toenrich New York’s diverse economy, as they have for centuries. To make an honest living, vendors need valid licenses, streets on which to vend, and penalties that do notthreaten their very existence. While acknowledging that reasonable regulations arenecessary, the Street Vendor Opportunity Bill recognizes that powerful corporateinterests have nearly eliminated a New York tradition of street level entrepreneurship.By returning to vendors the chance for upward economic mobility, the Bill will create apowerful engine for growth whose effects will reverberate in every corner andthroughout every neighborhood of New York City’s economy.