The Real Estate Board of New York has joined a coalition battling a city proposal to introduce commercial rent regulation.
The full city council is set to hold a hearing on October 22 on the Small Business Jobs Survival Act, legislation tabled by councilman Ydanis Rodriguez that would guarantee commercial tenants who are fully compliant with the terms of their leases an automatic 10-year renewal option.
If the tenant and landlord cannot agree on a rental rate for the extension, the dispute would automatically be kicked into mediation or arbitration, if necessary.
“Commercial Rent Control ignores market conditions and would hurt the economy,” said REBNY president John H. Banks.
“We hope any legislation put forward by the City Council to purportedly help small businesses will be legal, based upon data and not anecdotes, and actually create jobs for small businesses rather than perpetuate the endless government regulations and laws that are an ever-increasing burden to small business.”
Banks was speaking as a member of the coalition that includes business leaders, property owners, housing advocates and home owners who argue at Intro 737’s commercial rent plan would harm 100,000 co-operative households by revoking their legal right to control commercial space in their own buildings.
The protestors also claim it would make it harder to include ground floor retail space in new affordable housing developments.
Steven Soutendijk, chairman of the REBNY Retail Committee, said, “Intro 737 is a hammer in search of a nail. Ostensibly the intent of this bill is to improve a retail market that has been struggling with macro-economic challenges like the rise of e-commerce and the global challenges of national retailers, but the marketplace has already corrected, and will continue to do so organically.
“Property owners are already incentivized to lease their ground floor retail space at market rents and there is already a ʻvacancy taxʼ for those owners in the form of property tax and mortgage payments. 737, with its onerous arbitration provisions, will make it even more difficult to get deals done and will do nothing to fill empty storefronts.”
Jolie Milstein, president and CEO of the New York State Association for Affordable Housing said the City Council should consider alternative approaches to supporting small businesses across the five boroughs.
“The de Blasio administration has sought to expand opportunities for vibrant ground-floor retail in new affordable housing projects – but Intro 737 would roll back that progress and make it more challenging to integrate and manage commercial space in these developments,” she said.
Ronald S. Zeccardi, president, Building Owners and Managers Association of Greater New York, added,
“This proposed bill has been around for decades without ever moving, because generations of lawmakers have identified its fatal flaws.”
Legal experts have called Intro 737 unlawful because New York City has no legal power to enact commercial rent control under the City Charter, state Constitution or state law.
Other members of the coalition include the Council of New York Cooperatives and Condominiums, the Alliance for Downtown New York, the Grand Central Partnership, East Midtown Partnership and the Rent Stabilization Association.
The City Council hearing has been set for October 22 .