The city’s red-hot residential real estate market is heating up the action in another area of the New York economy: business startups.
The evidence can be seen every day on the fifth floor of 42 Broadway. There, people line up outside the Department of Consumer Affairs Licensing Center to apply for licenses in 55 different business categories.
For the third year in a row, the home improvement contractor license is the one they ask for most.
“There are a lot of people now wanting to open businesses,” says Dino Franco, a DCA community assistant whose desk is the first stop in the process. “A lot of them want to be home improvementcontractors.”
The crowds that come and go all day in these nondescript offices form a microcosm of the city’s small business economy. The DCA issues 60,000 licenses annually in categories ranging from auctioneer to tow truck driver. The DCA issues an additional 40,000 licenses on behalf of the city Department of Health and Mental Hygiene.
The DCA’s aim is to protect consumers by ensuring that businesses follow basic rules of commerce-or that they lose their licenses and suffer fines if they fail to do so.
The most popular permits issued in recent years have included licenses to deal in secondhand merchandise, operate an electronics shop, and have a “stoop line stand,” a sidewalk display where grocery store owners can sell their fruits and vegetables.
Business creation tends to peak in bad times, as layoffs push former workers to try their hand at entrepreneurship.
With the city’s economy in an upswing, business formation is dropping. In the first six months of this year, the number of licenses issued in the top categories has declined, compared with the same period last year. Secondhand dealer licenses, for example, dropped 11%, to 3,677.
The sole exception was licenses for home improvement contractors, which soared to 7,263, a gain of 20% compared with the number a year ago.
Some of the increase in the home improvement category can be attributed to stepped-up enforcement against unlicensed contractors, says a Consumer Affairs spokeswoman. But the contracting licenses’ first-place position among the 55 categories can also be traced to recent robust sales of apartments and houses.
“With the low interest rates, many people have purchased properties and are looking to fix them up,” says Jim Bazquez, a telecom engineer from Miami who was at the DCA office to apply for a home improvement license. He hopes to relocate to Manhattan and open a contracting firm as soon as possible.
“There’s a window of opportunity right now,” he adds. “Interest rates are going back up, and some people need to do improvements if they want to turn their property.”
As has always been the case in New York, a high percentage of those starting businesses are immigrants.
According to a survey the DCA conducted last summer, roughly four out of 10 license applicants questioned spoke a language other than English at home. Of those, the greatest number spoke Spanish, followed by Chinese, Russian, Arabic, Korean and a dozen other languages.
A carpenter named Paul, who declined to provide his last name, is typical of many people turning in their paperwork. A Polish immigrant who has been working for the same Brooklyn contractor for the last seven years, he plans to start his own contracting business.
“I’m trying to move up on my own,” he says.
He still has plenty of work to do. The requirements for a home improvement contractor license are among the stiffest. In addition to being fingerprinted, posting a $20,000 bond-or putting $250 into a DCA trust fund-and paying $100 for a two-year license, he also must pass a 50-minute written exam on the rules and regulations of his profession.
The DCA’s Web site warns that licenses requiring exams can take eight weeks or more to process.
Paul the carpenter remains undaunted.
“Little by little, I’ll get there,” he says.