New York City Business Leaders Join Forces in Opposition to City Council’s Proposed Commercial Rent Control Legislation

 

Intro 1796’s Commercial Rent Control Plan would establish a Commercial Rent Guidelines Board that would set annual lease increases on retail, professional service, and manufacturing storefront spaces.  

The following organizations voiced unified opposition to Intro 1796’s proposed commercial rent control plan.

 “This proposal fails to address the increasing burdens facing small businesses and will force successful ones to flee the city. NYC’s Department of City Planning and the City Comptroller both recently reported that the issue of retail vacancies is not a citywide problem. In fact, data shows that retail vacancy rates are driven by rising property taxes, longer wait times for government approvals, e-commerce and various other factors.” James Whelan, President, The Real Estate Board of New York,” stated James Whelan, President, The Real Estate Board of New York.

“The small businesses we speak to cite many factors that negatively impact their current condition, starting with overburdening government regulations and the added costs of implementing a significantly higher minimum wage and paid sick time”, said Randy Peers, President & CEO, Brooklyn Chamber of Commerce. “Rent increases come up, but it really depends on the type of business affected, and is more pronounced in some commercial districts than others.  It seems to me we should be looking at a comprehensive set of reforms in a true effort to save our neighborhood small businesses, rather than pit one industry against another.”

"While well meaning, the legislation being introduced in the City Council that would implement commercial rent stabilization across New York City would have unintended consequences that would hurt small businesses throughout the five boroughs. Though designed to benefit mom and pop shops, this legislation actually favors large chain stores over small businesses. It makes it incredibly difficult for successful small businesses to move into larger spaces, hindering their growth. We encourage the City Council to scrap this misguided legislation, and look forward to working with lawmakers to come up with a proposal that helps New York City's small businesses grow and thrive," said Thomas J. Grech, President & Chief Executive Officer, Queens Chamber of Commerce.

Jessica Walker, President and CEO, Manhattan Chamber of Commerce stated, There is no question that additional steps must be taken to help more small businesses survive in New York. Distracting and divisive proposals like commercial rent control, which is likely unconstitutional and certainly would have negative unintended consequences for small business tenants, are not helpful.”

"There's no question we must do more as a city to support small businesses and reduce storefront vacancies, but this bill wouldn't achieve either of those goals -- and would actually harm the very small businesses it purports to help,” said Downtown Brooklyn Partnership President, Regina Myer. “Rather, the Council should use the tools already at its disposal to alleviate pressure for commercial tenants, starting with reevaluating real estate taxes. We look forward to continuing the discussion with the Council and the City about this critical issue for Downtown Brooklyn." 

Jessica Lappin, President of the Alliance for Downtown New York said, "Small locally owned businesses are the backbone of New York City and what make it different from other places around the globe.  They employ New Yorkers and give our neighborhoods character. Their importance is hard to overstate. And today, they face a myriad of challenges. The pressure of e-commerce alone is enormous. But beyond that, while rent is a factor, what we hear most from struggling business owners are complaints about bureaucracy and unresponsive city agencies, crippling property tax assessment increases, over regulation, scaffolding that obscures storefronts, traffic, and aggressive enforcement."

“Many apartment building owners rely on their commercial rents to keep their buildings viable as property taxes and other operating expenses continue to rise while legislators continue to enact laws that limit residential rents. Commercial rent control is just another misguided attempt by our legislators to solve an issue with an unworkable solution. Just look at 50 years of failed housing policies that still have not provided affordable housing to low-income families in need,” said Joseph Strasburg, President, Rent Stabilization Association.

“This proposal would create a significant hardship for the cooperatives and condominiums that have commercial spaces. The residents of co-ops and condos pay New York taxes and have to live in the building but commercial tenants may live in another city or state and not care about the quality of life of the residents. This proposal would force residents to live with a commercial space that they may not want in their building,” stated Mary Ann Rothman, Executive Director, The Council of New York Cooperatives and Condominiums.

"Commercial construction creates a considerable economic impact on New York. According to our latest Retail Construction Report, landlords and businesses have invested $2.5 billion through renovations and alterations over the past four years,” said Carlo A. Scissura, Esq., President & CEO, New York Building Congress. “This bill could disincentivize landlords from making these kinds of improvements to their properties and will limit the ability of property owners to make independent decisions."

Last year, The New York City Bar Association determined the New York City Council has no legal power to enact commercial rent control.