Rent increases are pricing small businesses out of business
Not only is rent going up for housing across the nation, but small businesses are also feeling the pinch.
A study by the Bank of America Institute found that rent increases are being felt most by small businesses in the West, where the average percentage of rent payments in May was more than double the national average.
The latest data from April showed around 43% of small business owners in the United States were unable to pay their full rent on time.
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The study stated that the number hasn’t been this high since the height of the Covid-19 pandemic in March 2021. The report explains that rents are pricier now, largely because of inflation.
Some small business owners in Denver said it has been hard to keep up with the rent increases.
Tim Baca, owner of Denver Crystal and Gems, said he has owned his shop for three years, but his rent payments have never looked like they do now.
"The cost of rent has been very high and very unpredictable," Baca said. "I have been looking for a new location. It's been very difficult. Rents are very high right now."
Baca said he's had to raise some of the prices of his goods to keep up with inflation, and that some items have now become too expensive to sell. Baca said he is fortunate he has a good flow of customers who have helped keep his business running.
That hasn't stopped him from looking elsewhere, though.
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"I have been looking also in other states because there's a lot of people moving out of Colorado, out of Denver, a lot of businesses, because the price is too high to run business," Baca said.
Up to 20 cities across the nation have seen an increase in their rent over the past year.
Small businesses in Las Vegas, San Diego and Washington D.C. make some of the biggest payments.
Matt Megyesy, one of the owners of Mutiny Information Café in Denver that sells comic books, coffee and other items, said he worries about rent increases, too.
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"It's always on our mind of looking for another place that's maybe a little bit cheaper, maybe a little bit smaller," Megyesy said. "You don't see the buildings growing with the rent increases. Say we have the air conditioning of a building from the 1980's."
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Megyesy said his store has been open more than a decade, and that he hopes the city builds more homes in the area so more consumers of his products move in.
"Until those people are here, it's just wishful thinking," Megyesy said.