Future of commercial rent regulation unclear
by Sara Krevoy
Dec 26, 2019 | 2607 views | 0 0 comments | 196 196 recommendations | email to a friend | print
After 37 years in business, popular Sunnyside joint Dave’s Bagels shut its doors for good this past summer. The neighborhood bagel shop’s fate followed the closure of two adjacent businesses on Queens Boulevard.

With skyrocketing rents and property taxes, unstable leases and nowhere to turn for help, many small business owners across the city are worried for the future of their establishments.

“So many people go through and sacrifice a lot to open small businesses and maintain them,” said Paul Longo, owner of Brookside Market and Ida’s Nearabout across the boulevard from where Dave’s Bagels once stood. “It’s tough when you’re such an integral part of building a neighborhood to then go eight or 10 years and face a 100 percent rent increase, forced out from a neighborhood you helped make so desirable.”

“Our local mom-and-pop stores are the lifeblood of every neighborhood in New York City,” said Councilman Jimmy Van Bramer during a recent press conference outside of the now-vacant storefront that was once home to Dave’s Bagels.

Particularly in Queens, many small businesses are owned and operated by immigrants. These enterprises not only employ residents and generate tax revenue for the city, but they are also a crucial component of what makes neighborhoods feel like home.

“When local small business owners are known to the community, the community falls in love not just with the store, but with the owner and with the staff and it’s really what binds us together,” Van Bramer continued.

The councilman and Longo were accompanied by other local small business owners, activists and residents to support the City Council’s proposed commercial rent control bill, introduced by Councilman Stephen Levin of North Brooklyn in November.

If passed, it would create a rent guidelines board for commercial properties much like the one that regulates apartment rents.

The City Council-appointed board would oversee rents for retail and offices spaces of 10,000 square feet or less, as well as manufacturing spaces up to 25,000 square feet.

It would determine an initial rate, and then calculate subsequent rent fluctuations based on factors of commercial real estate taxes, sewer and water rates, and operating and maintenance costs.

Lawmakers say the legislation is intended to address concerns heard from small business owners, tenant advocates and community organizations for years.

“The board would set the allowable increase, freeze or decrease each year, protecting against the sudden and dramatic rent increase we continue to see, and which businesses and neighborhoods cannot bear the cost of,” said Elizabeth Adams, legislative director for Levin’s office.

Supporters of the bill also site its potential benefits for landlords in keeping commercial rental spaces filled.

A recent city Comptroller report indicates the city’s commercial vacancy space doubled to 11.8 million square feet between 2007 and 2017, with many neighborhoods seeing vacancy rates at nearly 20 percent.

“This is the cost of rising rent without a regulated system, balance or a reasonable increase based on what makes sense for the neighborhood,” Adams added, pointing out that if landlords are allowed to charge whatever rents they see fit, those who can afford these prices will be corporate giants like Apple and Amazon, which make most of their money from online business.

“That cannot be our bar, that cannot be our metric for how we set rent,” she said. “It needs to be based on our communities and local businesses.”

Opponents of the bill, however, are adamant it would in fact do the opposite of what is intended.

Real estate experts say the commercial rent legislation would prevent property owners from offering capital assistance to businesses for improvements on their spaces when they first move in, paving the way for financially anchored chain stores to take over.

Additionally, opponents claim the proposal ignores data outlining the myriad of factors plaguing small businesses, such as city agency delays, strict building regulations and a growing internet retail landscape.

A statement by Steven A. Soutendijk, executive managing director of the retail services group Cushman & Wakefield reads:

"The City Council’s proposal for commercial rent control would do far more harm than good for small businesses across the five boroughs,” read a statement by Steven Soutendijk, executive managing director of the retail services group Cushman & Wakefield. “This misguided bill would actually tip the scales even further in favor of big corporate chain stores over local mom-and-pop shops, while also ignoring the real regulatory and market-based problems that drive retail vacancies.”

Comments-icon Post a Comment
No Comments Yet