As Council assesses small business legislation, commercial rent stabilization bill is introduced

Retail vacancies have been a problem in the city in recent years. (Photo by Gabe Herman)

BY GABE HERMAN | It’s been over a year since the City Council held a hearing on the Small Business Jobs Survival Act (SBJSA), and while some advocates have expressed frustration that the bill has still not passed, officials say further work is being done to assess its impact, and new legislation has been introduced aimed at protecting small businesses.

The SBJSA would include giving commercial tenants rights to a lease renewal and provide arbitration in deciding rent increases. Speaker Corey Johnson has said the bill has legal issues and is problematic because it doesn’t distinguish between large and small businesses. He has also said the bill would hurt mom and pop shops who don’t have a lease, and which are largely immigrant-owned.

When Johnson was recently asked for comment about the bill, a spokesperson said, “Small businesses are the backbone of our economy. They are what make New York, New York. In August, we approved several proposals to help businesses by providing much-needed support and information. Currently, the city lacks the data necessary to make informed policy decision and the storefront database bill will tackle this issue heads on. The Council is continuing to work on a number of complex policy proposals, including the Small Business Jobs Survival Act.”

The August actions from the Council included regular collecting of information about storefront businesses, including vacancy rates; creating online guides for small business owners to help them understand rules and laws that apply to them; and requiring training and education to small businesses about issues like regulatory compliance, efficiency and marketing.

Johnson’s office also pointed to a bill passed in September that would strengthen commercial tenant harassment laws. And Johnson has said he is working with advocates and community groups, to try to move forward on issues related to small business.

Julian Hill, supervising attorney at TakeRoot Justice, which provides research and support to community groups in the city, said that no single bill will solve all of the small business issues.

“Could SBJSA have helped some of the clients I’ve worked with? Absolutely,” Hill said, but he added that it won’t necessarily be a solution in every scenario.

Vacant spaces last year in the West Village. (Photo by Gabe Herman)

Hill said he supports collecting more data about the retail vacancy issue in the city. He noted that back in the 1940s, when commercial rent stabilization was being worked on, it was based on data and reports showing the problem in the city.

“I think it is a good idea to have that information so we can figure out what might be an ideal solution,” Hill said.

Too much regulation is a problem that some small businesses say they are facing, according to Hill. “I do hear the concerns around the ways in which some regulations are affecting small business clients I deal with, and how that can create certain burdens,” he said, which can include matters like permits and obtaining certain licenses.

Hill said that commercial tenants in the city don’t have the same protections as residents, and there is often an assumption that businesses have more knowledge about law and policies, but there may be situations where a small business owner doesn’t speak English, and may sign a lease without understanding it.

“For commercial tenants, it’s like the Wild West,” Hill said. He said he would like to have predatory provisions in leases outlawed, such as a deficiency provision, where if a commercial tenants can’t pay the full lease and has to leave the space early, the full terms of the lease must still be paid to the landlord if another tenant doesn’t move into the space.

A new bill was introduced in the Council in November which would create commercial rent stabilization for small businesses, similar to the system in place for city residents. Under the bill, a seven-member board would establish annual rent rates and adjustments for the businesses.

When Speaker Johnson’s office was asked about this new bill, a spokesperson said, “The bill is going through the legislative process.”

Hill said that TakeRoot Justice had limited involvement with the bill’s prime sponsor, Council Member Stephen Levin, about the legislation. Hill said that small businesses who have been in place for decades can suddenly see large rent increases, and he said, “I do think that this type of legislation would be helpful for sure.”

With the SBJSA being re-introduced last year after decades, Hill said, and other bills aimed at addressing small business issues, he said it’s a positive sign. “It’s evidence that people are starting to see the importance of small businesses as employers of people who live in those neighborhoods, and for us being able to provide support.”

Hill added that he’s optimistic that the issues are being taken more seriously. “None of the bills are perfect,” he said, “but I definitely think we’re moving in the right direction.”