Small restaurants continue to feel economic crunch from outdoor dining regulations

Originally written October 14, 2024.

The outside of White Maize. Image credit: Isabella Japal.

Dining Out NYC, the latest rendition of the city’s outdoor dining program, requires a new permit process that some smaller restaurants fear will hurt their business.

Outdoor dining sheds that were initially embraced during the pandemic were eventually removed because of the trash, traffic and disruptions they created. Now, Mayor Eric Adams’s new Dining Out NYC initiative requires restaurants to obtain permits to operate tables outside. For smaller restaurants, the application process can be costly. But if they don’t get permit approval, losing outdoor dining hurts their bottom line and the workers who rely on the additional tips that outdoor tables bring.

“The outdoor dining doubles the amount of tables and really helps with tips,” said Olivia Ray, a server at Westville Chelsea on Seventh Avenue, one of eight chains in the Westville Restaurant Group, which successfully obtained a Dining Out NYC permit.

Under Dining Out NYC, restaurant owners are expected to pay a non-refundable licensing fee ranging from $1,050 to $2,100. The difference in costs depends on if the permit is for a sidewalk cafe, roadway cafe, or both. Once an application is approved, business owners then pay a refundable security deposit from $1,500 to $2,500. Then a “fee rate” must be paid to the city based on the square footage of the outdoor dining area during the restaurant’s operating hours. These costs are in addition to the ones required to build the dining structures, and eventually take them down and keep in storage from November to April , as required under the Dining Out NYC program. 

Kathyana Jalfra, owner of White Maize, a Venezuelan restaurant with locations in Chelsea and Brooklyn, said she can’t afford to apply to the new permit program. At her Brooklyn venue, Jalfra noticed a 10 to 20% decrease in revenue when she had to remove her outdoor dining tables because of a city construction project. “People really loved that house,” said Jalfra, who added that the city did not reimburse her for taking down her shed.

As for White Maize’s location in Chelsea, the restaurant has undergone several changes to remain in operation. The eatery offered to-go service along with outdoor dining until August 3, when the Dining Out NYC shed removal deadline took effect. White Maize operated as a to-go establishment until it converted to a full-fledged indoor restaurant at the end of September.

“Customers come up and go, ‘Oh my god, you don’t have any seats?…I’ll go eat at another place,’” said Jalfra in reference to when White Maize was operating under a to-go capacity.

Andrew Rigie, the executive director of The New York City Hospitality Alliance, a restaurant and nightlife advocacy group, acknowledges the challenges small businesses are facing but believes Dining Out NYC is much better than the pre-pandemic Sidewalk Café program that he said cost even more money. 

Rigie added that there is still room for Dining Out NYC to change and accommodate smaller restaurants. “The city can always go back and [change] the program as needed to ensure that it meets the goal of being the biggest and best outdoor dining program anywhere in the country,” he said.