How Bad Is NYC's Vacant Storefront Problem? Council Wants To Know

With a perceived uptick in vacant storefronts in parts of the city getting more attention, the City Council’s small business committee held a hearing Monday to consider a package of proposals to address the growing problem. Legislation discussed at the hearing included bills to require that landlords report storefront vacancies to the city and provide legal assistance to small businesses facing eviction—though not the contentious Small Business Jobs Survival Act, which had its own hearing last fall—with local elected officials and advocates mostly expressing positive sentiments about the proposed reforms.

One of the bills discussed Monday, Intro 1473, would mandate commercial landlords submit properties that become vacant to the city Department of Small Business Services, imposing a penalty of a $1,000-per-week fine on property owners who fail to do so. Another, Intro 1472, would mandate that the city compile a storefront-properties online database, which would include information on rent, size and permitted use.

These bills are intended to begin to address “high-rent blight,” where local businesses leave retail spaces because they can no longer afford their landlords’ asking price, and end up not being replaced. By gathering information, the council could gain insight into the city’s retail vacancy problems, as it considers and potentially tweaks the SBJSA. Council Speaker Corey Johnson in a prepared statement said the package of bills discussed Monday are a “critical part of the City Council’s ongoing efforts to help small business” in the city.

The hearing comes after years of debates of the SBJSA, which would give retail tenants the right to a 10-year lease renewal and provide tenants with third-party arbitrators if necessary. Last October, the council held a marathon deliberation on the legislation, which was first proposed 30 years ago and last discussed at a hearing in 2009, when then-Council Speaker Christine Quinn never brought it up for a vote despite the bill being sponsored by a majority of councilmembers. The bill now has 30 sponsors, enough to pass if it were to be brought to vote; the council has been meeting with SBJSA advocates, Politico NY reported Monday, and work on the legislation is ongoing.

Manhattan Borough President Gale Brewer, who cosponsored the bill requiring landlords report the vacancy status of storefront properties and has been sounding the alarm on commercial vacancies in recent years, talked up the benefits of having a definitive accounting of empty storefronts.

“This database will identify vacancy trends throughout the city, spot areas where vacancies are rapidly increasing, and identify specific property owners and managers who demonstrate a pattern of forcing out small business,” Brewer said at the hearing. “Everyone I talk to about this issue agrees: We need a database.”

The city’s small business agency was on board, as well.

“While we continue to review the details of the legislation, we share many of the council’s goals in offering it,” said SBS Commissioner Gregg Bishop. “We agree that more data is needed to better fully understand the scale of commercial vacancies and address them.”

He added that a registry would be an “important part of the effort” of passing a vacancy fee, a state-level policy the de Blasio administration is pushing.

Advocates and stakeholders also chimed in on several other bills that would expand commercial tenants’ rights and crack down on unscrupulous property owners. Intro 1410, for example, would institute a three-year pilot program in which landlords would be required to obtain a “certificate of no harassment” before the Department of Buildings gives them permission for new construction. Intro 1470 would lend legal assistance to small business tenants at risk of being evicted. And Intro 1471 would mandate that SBS provide “training and counseling” to small businesses.

Lena Afridi, director of economic development policy at the Association for Neighborhood Housing and Economic Development, said the legislative package is an “exciting response” to years of tenants-rights advocacy for small businesses.

“While both residential and commercial tenants in New York are at risk of landlord harassment and subsequent displacement, commercial tenants lack meaningful rights and protections,” said Afridi. “It’s past time the city acknowledges this reality by clearing defining the rights of commercial tenants and taking necessary action to protect those rights.”

Mohamed Attia, co-director of the Street Vendor Project, testified that, under current laws, landlords have “absolute power” to do whatever they please. He said “skyrocketing” commercial rents, dealing with “harassment” from landlords, and difficulty affording requisite legal services make it difficult for immigrants like him to start and maintain their own businesses. This, he said, has led to people who owned restaurants becoming street vendors instead, because they cannot afford to renew their leases.

While the lion’s share of comments from stakeholders and local elected officials said mom-and-pop stores needed added protections, committee chair Mark Gjonaj had other priorities in mind. Gjonaj questioned SBS’s Bishop about what the councilmember said was an “arcane maze” of burdensome regulations harming businesses, which according to Gjonaj has gone unaddressed in the years since de Blasio took office.

“We haven’t removed a single requirement or a burden on small business. We’ve only added in the last four years,” he said, ticking off paid leave, the minimum wage, health care costs, and fines for trivial infractions like sign lettering as difficulties for less well-capitalized businesses, which he argued was a main driver of retail struggles, not a paucity of regulations. “When do we realize that too much is too much?”

Gjonaj went on, “To me it seems they’re the piggy bank that we constantly go to, to draw water from, for a tax base and revenue source. When will this administration truly value our small businesses as a partner?"