Small Business & Anti-Displacement Economics in Seattle#

Nearly 95% of Seattle businesses have 50 or fewer employees, and small businesses are the economic and cultural backbone of the city’s neighborhood commercial districts. (Seattle OED: Commercial Affordability Advisory Committee Report (PDF)) As Seattle’s economy has grown — driven largely by technology-sector expansion — rising commercial rents, redevelopment, and lease non-renewals have displaced longstanding businesses, particularly those owned by immigrants and people of color. This guide covers the scale of small business displacement, the city’s commercial affordability programs, community benefit agreements, and the advocacy organizations working to keep neighborhood businesses in place.

The displacement problem#

Who is displaced#

Small business displacement disproportionately affects immigrant-owned, BIPOC-owned, and legacy businesses. Neighborhoods with high displacement risk — the Chinatown-International District, Central District, Rainier Valley, and Columbia City — are home to many of the city’s most culturally significant commercial corridors. When a longstanding Ethiopian restaurant, Vietnamese grocery, or Black-owned barbershop closes, the loss is economic and cultural. (The Urbanist: What Could Rapidly Growing Seattle Do to Reduce Small Business Displacement?)

While BIPOC residents account for nearly 38% of Seattle’s population, BIPOC businesses receive only 14% of the city’s purchasing and contracting spend. (Seattle Innovation Hub: Reforming City Buying to Drive Equity)

How displacement happens#

Commercial displacement operates differently from residential displacement. Small business tenants typically have fewer legal protections: commercial leases are freely negotiable, and there is no just-cause eviction requirement for commercial tenants. Although Washington’s statewide rent control preemption (RCW 35.21.830) applies only to residential structures, Seattle has not enacted commercial rent control — the CAAC considered and rejected it in 2016. Displacement occurs through several mechanisms:

  • Rent increases: Landlords raise rents beyond what small-margin businesses can absorb, sometimes doubling or tripling rates at lease renewal. The Commercial Affordability Advisory Committee reported in 2016 that Seattle retail rents had risen 28% in the prior four years. (Seattle OED: CAAC Report (PDF))
  • Lease non-renewal: Property owners decline to renew leases in order to sell the building, redevelop the site, or attract higher-paying tenants. Small businesses that lease their space do not have relocation rights similar to residential tenants — a landlord seeking to sell or redevelop can simply terminate the lease in accordance with its terms. (The Urbanist: What Could Rapidly Growing Seattle Do to Reduce Small Business Displacement?)
  • Redevelopment: Buildings housing small businesses are demolished for new mixed-use or residential construction. While new buildings often include ground-floor commercial space, the replacement spaces are typically larger and more expensive than what existed before. The CAAC found that 25% of existing buildings had available spaces under 1,000 square feet, compared with only 20% of buildings under construction or proposed. (Seattle OED: CAAC Report (PDF) | OED Bottom Line: Tenant Improvement Fund Recipients)
  • Changing neighborhood character: As wealthier residents move in, consumer preferences shift and legacy businesses lose their customer base even if they retain their lease. In the Chinatown-International District, the cumulative impact of new luxury development has threatened the viability of longstanding culturally specific businesses. (International Examiner: What Can Stem the Wave of Development Threatening CID? | MRSC: Dealing with Housing Displacement)

History#

2007: Dearborn Street community benefit agreement#

In 2007, developers proposed a $300 million regional shopping mall with 565 housing units on the 10-acre Goodwill Industries site at the intersection of S. Dearborn Street and Rainier Avenue S. — at the crossroads of Little Saigon, the Central District, the International District, and North Rainier Valley. Community groups feared the development would displace Vietnamese small businesses and change the character of surrounding neighborhoods. Puget Sound Sage joined neighborhood councils, small businesses, and labor unions to negotiate a community benefit agreement (CBA) with the developer.

After nearly two years of negotiation, the 2008 agreement included 200 units of low-income housing (including 50 family units), $1.8 million for small business and nonprofit support in Little Saigon, restrictions on chain retail, $200,000 for traffic mitigation, and commitments to family-wage employment with prioritized local hiring. The project was canceled during the 2009 recession, but the Dearborn CBA was the first legally binding community benefit agreement in the Puget Sound region and established a template for future negotiations. (Puget Sound Sage: Dearborn CBA)

2016: Commercial Affordability Advisory Committee#

Mayor Ed Murray convened the Commercial Affordability Advisory Committee (CAAC) — 16 economists, small business owners, developers, and arts community members — to address rising commercial rents during Seattle’s tech-driven growth boom. The committee’s September 2016 report found that about 94% of Seattle businesses had 50 or fewer employees and that rapid redevelopment was replacing small-scale leasable spaces with larger, less affordable ones. Key recommendations included:

  • A commercial affordability tax abatement modeled on the MFTE residential program, providing property tax exemptions to landlords who lease to qualifying small businesses at below-market rates
  • Advocating that King County tie property tax assessments to building income rather than surrounding market values
  • A commercial affordability fund for low-cost financing
  • Zoning changes to promote small-scale commercial pockets in residential areas
  • Stronger design guidelines encouraging small storefronts in new development
  • Further study of legacy business support — which led to the Legacy Business Program

The committee considered but rejected commercial rent control. (Seattle OED: CAAC Report (PDF))

2019: Legacy Business Program launches#

The Office of Economic Development launched the first annual Legacy Business Program, recognizing small businesses that have operated for at least 10 years and made significant cultural contributions to their neighborhoods. One business is selected from each of the seven council districts each year and receives public recognition, a commercial lease and succession planning toolkit, and marketing and legal consultation. The program grew out of a 2017 study funded at the initiative of Councilmember Lisa Herbold. (OED Bottom Line: Legacy Business Program Launch)

2020: COVID-19 commercial protections#

In response to the pandemic, Seattle enacted emergency protections for small business tenants:

  • March 2020: Mayor Durkan signed an emergency order halting evictions of small business and nonprofit tenants (businesses with 50 or fewer employees) for non-payment of rent. The order also prevented landlords from charging late fees, interest, or other penalties during the moratorium. (Ryan Swanson: Seattle Creates Protections for Small Business and Nonprofit Tenants)
  • April 2020: The City Council passed Ordinance 126066 (sponsored by Herbold and Morales), imposing a moratorium on commercial rent increases for qualifying small businesses and requiring landlords to negotiate repayment plans for overdue rent. Repayment schedules could not require more than one-third of late rent in any month, and no late fees or interest could be charged. (Seattle City Council: Rent Hike Moratorium for Small Businesses)
  • August 2020: The moratorium was extended through December 31, 2020.
  • OED launched the Small Business Stabilization Fund, distributing $10,000 grants to 469 small businesses affected by COVID-19. OED also partnered with Communities Rise and Perkins Coie to create a Commercial Lease Amendment Toolkit helping small businesses renegotiate leases. (OED Bottom Line: Lease Amendment Toolkit)

2021: Seattle Restored program#

OED launched Seattle Restored, a partnership with the Good Business Network of Washington (formerly the Seattle Good Business Network) that matches small business owners, artists, and entrepreneurs with vacant commercial storefronts for pop-up shops, art installations, and artist residencies. The program prioritizes BIPOC and women-owned businesses. (Seattle OED: Seattle Restored)

2024: Business Community Ownership Fund#

Mayor Harrell, OED, Grow America, and JPMorgan Chase launched the Business Community Ownership Fund (BCO Fund), a first-in-the-nation program backed by a combined $20 million investment. The fund acquires commercial real estate and establishes LLCs where multiple business owners become members, purchasing the property they occupy. Participating businesses secure lease rates below market value with no future increases. The fund prioritizes BIPOC, immigrant, women, and LGBTQIA+ business owners in high-displacement-risk neighborhoods including the Chinatown-International District, Central District, and Southeast Seattle. (Mayor’s Office: BCO Fund Launch)

The first two BCO Fund properties opened in 2024: La Union Studio, a BIPOC-owned interior design firm in Mt. Baker, and Marjorie’s, a beloved restaurant in the Central District that had closed in 2023 and reopened in its new location with over $2 million in BCO Fund investment. (Seattle Medium: Marjorie’s Reopens)

City programs and tools#

The Office of Economic Development (OED) administers most of Seattle’s small business and commercial affordability programs. OED’s commercial affordability strategy focuses on making it affordable for small businesses to start, stay, and grow in their communities. (Seattle OED: Commercial Affordability)

Tenant Improvement Program#

OED’s Tenant Improvement Program provides forgivable loans (0% interest, forgivable after one year of continued operations) to small businesses for signage and equipment. In 2025, the program offered up to $15,000 for exterior signage and up to $50,000 for commercial equipment. Eligible businesses must be independently owned, have fewer than 50 employees, and earn less than $2 million in annual revenue. The program prioritizes businesses in high-displacement-risk neighborhoods and those owned by BIPOC or women entrepreneurs. Funding comes from the JumpStart Payroll Expense Tax. In 2024, the program invested $1.66 million supporting 35 businesses. (Seattle OED: Tenant Improvement Program | OED Bottom Line: 2024 Year in Review)

Business Community Ownership Fund#

The BCO Fund is described in the history section above. As of early 2025, the program is in its pilot phase and accepting project proposals through December 2026. (Seattle OED: BCO Fund)

Seattle Restored#

The Seattle Restored program connects small business owners and artists with vacant storefronts for pop-ups, art installations, and artist residencies. The program is a partnership between OED and the Good Business Network of Washington. (Seattle OED: Seattle Restored)

Legacy Business Program#

The annual Legacy Business Program recognizes businesses with 10+ years of operation that have made cultural contributions to their communities. Winners receive lease planning toolkits, marketing consultation, and legal assistance. (OED Bottom Line: Legacy Business Program)

The Liberty Project#

The Liberty Project provides coaching and mentoring to minority-owned small businesses through partnerships with local universities. In its first year, the program served 45 businesses. (OED Bottom Line: 2024 Year in Review)

Accounting and Business Program#

OED’s small business consulting program provides free accounting, legal, and technical assistance. In 2024, the program delivered more than 3,000 hours of free consulting services to Seattle-based small businesses. (OED Bottom Line: 2024 Year in Review)

SAIL Initiative#

The SAIL (Safety, Activation, Investment, and Livability) initiative is a place-based investment strategy coordinating multiple city departments to address cleanliness, safety, and economic revitalization in targeted neighborhoods. The 2026 proposed budget includes funding for small business support in Little Saigon as the first SAIL pilot neighborhood. (OED Bottom Line: 2026 Proposed Budget)

Business Improvement Areas#

Seattle has 11 established Business Improvement Areas (BIAs), with six additional BIAs in development as of 2024. BIAs are self-taxing districts where property owners collectively fund maintenance, marketing, safety, and beautification for their commercial area. (Seattle OED: BIAs)

WMBE contracting#

Mayor Harrell issued an executive order in November 2023 expanding City contracting equity for women- and minority-owned business enterprises (WMBE). The City spent nearly $228 million with WMBE firms in 2022 for consulting and public works contracts. (Mayor’s Office: WMBE Executive Order)

Community benefit agreements#

A community benefit agreement (CBA) is a legally binding contract between a developer and a community coalition in which the developer commits to specific obligations — such as affordable housing, local hiring, small business support, or restrictions on chain retail — in exchange for the community’s support of the project. CBAs emerged nationally in the late 1990s, with the first full CBA negotiated for the Los Angeles Staples Center development in 2001.

Seattle’s most prominent CBA was the 2008 Dearborn Street agreement (described in the history section above). Although that project was canceled, the CBA model remains an active tool in the region. Puget Sound Sage continues to advocate for CBA frameworks in major developments, and the organization received a $250,000 grant in 2025 to support community-led stewardship of land in the Chinatown-International District. (NWAF: Puget Sound Sage CID Grant)

CBAs are distinct from city-mandated requirements like MHA or design review. They are negotiated directly between developers and community groups, and their enforceability depends on the specificity of the contract language. Effective CBAs include clear metrics, timelines, and enforcement mechanisms.

Advocacy organizations#

  • Puget Sound Sage: Research, policy, and community organizing for equitable development, transit justice, and good jobs. Led the Dearborn Street CBA negotiation and continues advocacy for community benefit agreements and anti-displacement policy.
  • Ethnic Business Coalition: Nonprofit established in 2014 supporting immigrant- and minority-owned small businesses in Seattle through outreach, business assistance, marketing, and policy advocacy. Serves communities in the CID, Capitol Hill, Central District, Rainier Valley, South Park, and West Seattle.
  • Good Business Network of Washington: Nonprofit (formerly Seattle Good Business Network) that partners with OED on Seattle Restored and other local business programs, connecting over 3,400 businesses and organizations statewide.
  • SCIDpda: Seattle Chinatown International District Preservation and Development Authority, managing 559 units of affordable housing and commercial space in the CID.
  • Africatown Community Land Trust: Acquires and stewards land to preserve the Black community in the Central District, including commercial space for Black-owned businesses in projects like the Liberty Bank Building.

Data sources#

Seattle OED Small Business Data#

OED publishes annual year-in-review reports with data on program investments, businesses served, and commercial affordability metrics.

Access: OED Bottom Line Blog

Seattle Open Data Portal#

Over 500 datasets across all city departments. Business license data, permit records, and economic indicators can be filtered by neighborhood.

Access: data.seattle.gov

Office Market Reports#

Quarterly reports from commercial brokerage firms tracking office and retail vacancy rates, absorption, and rental trends across the Seattle-Bellevue market.

Access: Kidder Mathews: Seattle Retail Report | Cushman & Wakefield: Seattle-Bellevue MarketBeats

SBA Small Business Profiles#

The U.S. Small Business Administration publishes annual state and metropolitan area profiles with business counts, employment data, and ownership demographics.

Access: SBA: Washington Small Business Profile

Key statistics#

MetricValue
Seattle businesses with 50 or fewer employees~95%
BIPOC share of Seattle population~38%
BIPOC share of City purchasing/contracting spend14%
Commercial retail rents increase (2012-2016)28%
Small Business Stabilization Fund grants (COVID-19)469 businesses
Tenant Improvement Program investment (2024)$1.66 million
BCO Fund total investment$20 million
BCO Fund properties opened (2024)2
OED free consulting hours delivered (2024)3,000+
City WMBE contracting spend (2022)~$228 million
Business Improvement Areas (established)11
Business Improvement Areas (in development, 2024)6

Sources: Seattle OED: CAAC Report (PDF) | OED 2024 Year in Review | Mayor’s Office: BCO Fund | Seattle Innovation Hub: WMBE

Last updated: February 2026