Small restaurant's rent -- low, in retrospect (3,4)
I believe the answer is:
tea room
'small restaurant's' is the definition.
(I've seen this before)
'rent low in retrospect' is the wordplay.
'rent' becomes 'tear' ('tear' can be a synonym of 'rent').
'low' becomes 'moo' ('moo' can be a synonym of 'low').
'in retrospect' is a reversal indicator.
'moo' reversed gives 'oom'.
'tear'+'oom'='TEA-ROOM'
(Other definitions for tea room that I've seen before include "Where light refreshments are served" , "Small restaurant or cafe" , "Place for light refreshments" , "Place in which a cuppa is served" .)