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Rent Control for Commercial Property Coming to NY

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Brooklyn Councilman Stephen Levin is working on rent control for commercial locations. It would apply to office space, retailers and manufacturers. Photo Credit: Wikipedia.org

By Howard M. Riell

Brooklyn Councilman Stephen Levin is working on rent control for commercial locations. It would apply to office space, retailers and manufacturers.

In an interview with Crain’s New York Business, Levin said the proposal would, if enacted, create a process very similar to the residential rules in use throughout the city.

“The rules would apply to commercial leases for stores and offices of less than 10,000 square feet and industrial spaces smaller than 25,000 feet that expire on or after January 1, 2020,” noted Crain’s. “The bill is a radically different approach to the issue of escalating rents and shuttered storefronts than the long-debated 2018 Small Business Jobs Survival Act, which Mayor Bill de Blasio and previous mayors have labeled unconstitutional.”

“It’s a complex problem,” Levin told Gothamist.com. “We think it’s time to introduce this into the conversation.” He said the proposal bill offers a “clear and predictable framework for rental increases in commercial spaces… It’s fair to property owners. We’re certainly not taking away their livelihoods. We’re saying there has to be some fair rubric in all of this to allow smaller businesses to compete for their existence.”

In July, noted habitatmag.com the New York City Council okayed legislation designed to allow the city government to keep accurate records on retail vacancies. “Not long afterwards, council members approved wider protections for commercial tenants, prohibiting landlords from harassing small business owners based on their age, race, gender, and immigration status.”

Lena Afridi, who works with United for Small Business NYC, said in a statement that “We are looking forward to getting real, meaningful protections to end the displacement of small businesses in immigrant communities and communities of color.”

Unrented storefronts have been a major issue for a long time across the city. New York City comptroller Scott Stringer said in September that research had shown the rate of empty and vacant storefronts across the five boroughs had skyrocketed by nearly 50 percent over the past decade, rising to a high of 5.8 percent in 2017.

Using never-before analyzed data, Comptroller Stringer’s new report found that the dramatic rise of retail vacancy citywide – which doubled to over 11 million square feet between 2007 and 2017 – has been fueled by the growth in online shopping, rising commercial rents, and burdensome regulatory hurdles. The rise of online retail in particular has dramatically reshaped the mix of New York City’s retail space away from traditional retail stores in favor of service-oriented establishments such as restaurants, barbers, and exercise studios, contributing to the growing vacancy trends as landlords, retailers – and the City bureaucracy – struggle to adjust.

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