The New York City Council’s proposal to impose rent stabilization on certain commercial properties – including those found in many co-ops and condominiums – is “terrifying” to the city’s real-estate interests, the New York Post reports.
“It is New York City adopting an anti-business agenda that would create a sense of political risk and discourage investment,” an unidentified “prominent owner” tells the paper.
The new bill, intended to combat the spread of vacant retail space across the city, focuses on small retailers, office tenants, and manufacturers. It would create a nine-member Rent Guidelines Board for these commercial spaces, similar to the board that sets rent increases for apartments. This board would set initial rents and then calculate yearly increases for retail and office tenants under 10,000 square feet and for manufacturing tenants under 25,000 square feet.
“They are completely ignorant,” declared Joanne Podell, an executive vice chairman at the brokerage Cushman & Wakefield. “I don’t believe the people aren’t well meaning, but they have no experience in retail and how it works.”
Meanwhile, Jim Whelan, president of the Real Estate Board of New York, contends it’s a “myth” that the abundance of vacant storefronts in the city add up to a retail crisis. “Two recent reports found there is no city-wide vacancy crisis,” Whelan writes in Real Estate Weekly. “Both ity Comptroller Scott Stringer and the Department of City Planning determined the issue of retail vacancies is isolated to certain corridors and caused by a variety of factors.” According to the planning department’s report, these factors include “the rise of ecommerce, demographic shifts, real estate market trends, local building stock, and other conditions that may vary from street to street.” High rents, apparently, are not a factor.
According to the comptroller’s study, longer wait times for government approvals is a major factor. It states: “The share of Department of Buildings alteration permits unapproved after 30 days is a significant driver of retail vacancy.”
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