Brooklyn councilmember talks details of commercial rent bill

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Landlords are turning down the potential for a commercial rental regulator, while some small businesses are lining up for support. Councilor Steve Levin, who tabled the Board Establishment Bill two years ago, is trying to get it passed before the end of his term in two months. PoliticsNY spoke to the councilor to get a feel for what the bill is really about.

After a hearing on Friday September 17, Levin PoliticsNY said he was still hopeful.

“This is nothing more than a level playing field when their lease expires,” said Levin.

The bill creates a seven-member committee for commercial rental guidelines, similar to the Council for Housing Rental Guidelines, and would set guidelines for rental adjustments in commercial spaces annually.

Both landlords and tenants have suffered from the pandemic, both on the commercial and the rental side. Workplace closures have deprived tenants of the ability to pay rent and eviction moratoriums have prevented landlords from enforcing rent payments.

One supporter, Natasha Amott, shut down her Williamsburg business because of a rent increase around the same time Levin was doing the bill. Even though she sees rents falling during the pandemic, she knows she cannot rely on them.

That’s what Levin says he wants to address – the uncertainty, lack of flexibility, and foresight companies can have when their lease expires.

“Landlords often pay lower rents, then increase them as the business becomes more successful, and make capital improvements. You don’t want this to go away, ”Levin said.

“Commercial tenants have very little leverage in negotiations,” he continued.

Amott said its main competitor are national and multinational companies willing to pay higher rent. Small businesses have different considerations. “If I had accepted this 44% rent increase, it would limit my employees’ wages,” Amott told Politics NY.

She added that the prices for her products would be higher at Whisk, her homeware store. “I didn’t feel very good about any of these scenarios,” she said.

The board that Levin wants to create would create rules for how much the rent in commercial parks can go up each year.

Here’s how the Housing Policies process works now, to take a look at how the commercial might fare:

The Rental Policy Board examines factors such as current tax rates, operating costs, availability of finance, and the total supply of housing and vacancy rates. They then hold meetings, hearings and voting sessions where they listen to input from the public and industry experts. Then they vote on the rental guidelines for rental contracts.

“That doesn’t guarantee them the right to renew,” Levin clarifies.

There are things that work in the current framework, says Levin. “It’s a dynamic marketplace … you don’t want that to go away.”

The New York Real Estate Board has spoken out against it. Tell the real deal that it would hurt property owners after already suffering from the pandemic.

As long as vacancies are high, property owners and small business owners will suffer. Office space and retail vacancies in particular hit a 30-year high last May. Whether or not this trend continues depends on the negotiations the two of them conduct.