BILL NUMBER: S8319
SPONSOR: SALAZAR
 
TITLE OF BILL:
An act to amend the administrative code of the city of New York, in
relation to enacting the "New York city small business rent stabiliza-
tion act"
 
PURPOSE OR GENERAL IDEA OF BILL:
To create a rent stabilization program for small businesses in New York
City.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section one is the short title.
Section two amends the New York City Administrative Code to add a chap-
ter fifteen, entitled "commercial rent stabilization", which:
-Defines terms used in the chapter.
-Creates a commercial rent guidelines board, with nine members appointed
by the mayor and establishing the authority and responsibilities of the
board.
-Establishes provisions, procedures, standards, and enforcement proce-
dures for stabilization of rent for commercial space.
-Provides for the collection of fees from landlords of each relevant
commercial space.
-Establishes a process for seeking adjustment of the initial rent.
-Establishes guidelines relating to renewal of leases.
-Prohibits retaliation by a landlord against a tenant for assertion or
exercise of rights under this law.
Section three is the effective date.
 
JUSTIFICATION:
Rent stabilization is one of the most successful public policies in
place in New York. It protects millions of New Yorkers from displace-
ment, stabilizes property values, keeps communities whole, and lowers
the cost of living overall. Despite the ways in which rent stabilization
has been weakened over the decades, the cost of living crisis would be
acutely worse without rent stabilization, and millions of New Yorkers
would not be secure in their housing, upending the social fabric of the
metropol- itan region.
Unfortunately, there is no similar program available for small busi-
nesses. Unconscionable rent increases and the lack of any right to lease
renewal have allowed commercial landlords to pursue profit without any
concern for the value small businesses contribute to their communities.
Historic enterprises and small businesses forming the cornerstones of
neighborhoods have been forced to shutter in the face of arbitrary rent
increases. As commercial rents have skyrocketed, unrestrained by any
forces besides market demand, the landscape of New York City, defined so
much by small businesses, has slowly been reshaped in favor of chains,
eroding the character of the city in the process. This trend has also
increasingly denied New Yorkers a venerable path towards building commu-
nity wealth through local entrepreneurship.
This is a high-rent problem. As rents increase, only large chains can
afford commercial spaces, and the number of vacant storefronts in New
York City has increased to over 11%, from 4% in 2007. Although vacancy
rates are predictably the highest in high-rent areas, such as lower
Manhattan and downtown Brooklyn, they also rise to above 20% in low-in-
come census tracts, owing to a disconnect between high commercial rents
and the incomes needed to support them. Similarly to residential rents,
while they decreased slightly in some neighborhoods in the aftermath of
the COVID-19 pandemic, commercial rents rose in majority non-white
neighborhoods. In a survey of 100 small business owners in lower Manhat-
tan, the Bronx, and Queens, rising rents was the foremost concern, with
two-thirds of respondents indicating that their rent had increased by
more than 10% in the previous year. Between 2007 and 2019, retail rents
increased by 22% on average, and more than 50% in some neighborhoods.
Between 2019 and 2021, median retail rent increased by 23% in Brooklyn,
14% in the Bronx, and 9% in Queens. More than 77% of immigrant small
business owners report being overburdened by their rent.
High commercial rents directly contribute to New York's cost of living
crisis. In order to stay open, businesses are forced to raise prices in
order to pay ever-increasing rents. Restaurants, grocery stores, barber-
shops, hardware stores and other innumerable businesses upon which New
Yorkers depend for regular or daily necessities have been forced to
significantly raise prices to meet high rents, helping cause the prices
of goods and services to skyrocket in recent years.
The lack of commercial rent stabilization contributes to other social
ills. Storefronts tend to be vacant for extended periods of time, rang-
ing from a year to a year and a half or longer. Commercial leases are
typically longer than residential leases, and so landlords prefer to
write off vacant properties as a tax loss and hold out for tenants who
can afford high rents rather than lower rents to sign a new lease as
soon as possible. Extended periods of vacancy can deter new businesses
from opening nearby, invite vandalism, and lower neighboring property
values.
 
PRIOR LEGISLATIVE HISTORY:
New bill in the Senate.
ASSEMBLY:
2023- 2024: A4255 (O'Donnell) - Referred to Cities.
2021- 2022: A1192 (O'Donnell) - Referred to Cities.
2020: A10281 (O'Donnell) - Referred to Cities.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:-
Minimal. The FY2025 adopted budget expenses for administering the
substantially equivalent Rent Guidelines Board for the City of New York
was $676,200.
 
EFFECTIVE DATE:
This bill is effective thirty days after it shall have become law.