In NYC that'd be tough. Those businesses go through a lot of money to survive. A single restaurant near me on the 2nd ave route, back in 2010, was paying $50k/month just in rent. That was just 1 diner. And on taxpayer's expense?

By what, magic?

Most businesses sign long-term leases, often 10 years. Landlords are under no legal obligation to offer rent breaks while construction is underway.

In fact, landlords would probably prefer the businesses go under so they can sign more lucrative deals post-subway construction -- see the current NYC store vacancy problem: http://www.nydailynews.com/opinion/change-math-keeping-nyc-s...

You're assuming the area will become undesirable during construction and landlords will be forced to offer cheaper rates to lure tenants, but as we see above more likely they'd prefer to wait. Especially if a subway is about to be built there.

That's how it goes in other countries: if the construction work lasts longer than N days and affects a business, there is a compensation.