RSA Targets New Bill Which Revives Old Issue
The idea of commercial rent control has been revived at the City Council and has raised numerous questions by the rental housing industry and even critical elected officials.
Back in the 1980s, RSA spearheaded an industry-wide effort that led to a failed attempt by the City Council to enact some form of commercial rent control. After over 30 years, the Council, attempting to carry the momentum of the State Legislature’s enactment of the Housing Stability and Tenant Protection Act (HSTPA) of 2019, is once again seeking legislation that would create commercial rent control throughout the City.
Council Member Stephen Levin of Brooklyn, a known pro-tenant activist, has introduced Intro. 1796, which would establish a system of commercial rent regulation applicable to retail businesses of 10,000 square feet or less, manufacturing businesses of 25,000 square feet or less, and professional businesses or other offices of 10,000 square feet or less. Furthermore, the Mayor would be responsible for establishing a Commercial Rent Guidelines Board and appointing seven members to the Board that would annually establish guidelines and the rate of rent adjustments for these particular commercial spaces.
Council Member Levin and various City elected officials such as Comptroller Scott Stringer have argued that the growing number of vacant retail spaces in the City is a result of rising rents of these spaces. However, RSA and other rental housing industry representatives have argued that the rising trend of vacant retail spaces comes as a result of drastic changes in how customers prefer to shop, preferably on the Internet on websites such as Amazon. Additionally, data has proven that retail vacancy rates are driven by rising property taxes and longer wait times for approvals by government.
The bill, which is in its extremely early stages, is yet to have a hearing by the Council Committee on Small Business. However, several elected officials, such as Mayor Bill de Blasio and Council Speaker Corey Johnson, have already expressed concern with the proposed legislation, especially from a legal point of view. Although nine additional Council Members have signed on to support Council Member Levin’s bill, it is unclear whether or not it will receive enough support to pass the entire Council.
RSA is concerned that since 38 of the current 52 Council Members are term limited at the end of 2021, many of these pro-tenant Members will seek to pass some form of commercial rent control in order to tout such a major accomplishment as they leave their Council seats and pursue other elected positions.
A hearing date has not been scheduled for Intro. 1796. However, RSA, the Real Estate Board of New York (REBNY), and other industry-wide representatives are prepared to fight against the proposed bill. We will keep you apprised on future developments.