As we discussed last week, housing activists and struggling small businesses have united in pursuit of commercial rent controls to stave off the growing vacancy rate of New York City’s storefronts, which has doubled in the last decade. Unsurprisingly, landlords and other members of the real estate industry reacted adversely, per the New York Post. The real estate industry contends that limits to commercial rent increases will discourage investment and maintenance—the same claims typically lodged against residential rent controls. Real estate experts quoted in the article also argue that landlords who have been keeping storefronts empty do not benefit from the lack of occupants—they continue to have mortgage and maintenance fees. While there’s no doubt that landlords seeking the best rental rates are subject to the same impersonal market forces like any other actor, the end result of rent increases in the past decade has arguably been a lose-lose for landlords, businesses, as well as ordinary New Yorkers contending with fewer stores and eyesores to boot. Critics of the proposed law also argue that the type of oversight board or panel that would adjudicate proper rent increases would be unable to make accurate evaluations of the market due to its limited size and resources, arguing the more decentralized current system is more sensitive to price fluctuations and real costs. [1]
In other real estate news, NYU’s Furman center released a report showing that eviction rates have fallen approximately 8 percent citywide since 2010, although the Bronx stands out among the five boroughs as the only one in which evictions have actually increased, with the city’s poorest borough now seeing a startling 39 percent of all evictions in New York City. [2]
Finally, documents filed last week show that a major new development is planned in Flushing—a 19-story mixed-use building that will feature around 300,000 square feet of residential and commercial space apiece. The site sold for $115 million two years ago, and stands along at least two other large-scale projects slated for the Queens neighborhood known for being home to the city’s largest Chinatown as well as many other Asian and Eastern European immigrant communities. [3]
[1] Weiss, L. (November 2019) Commercial rent ‘stabilization’ bill terrifies real estate industry from NY Post https://nypost.com/2019/11/19/commercial-rent-stabilization-bill-terrifies-real-estate-industry/?utm_campaign=iosapp&utm_source=mail_app Accessed November 20 2019
[2] Plitt, A. (November 2019) Evictions are on the decline in NYC—but not in the Bronx from Curbed NY https://ny.curbed.com/2019/11/19/20971269/new-york-rent-eviction-filings-furman-center Accessed November 20 2019
[3] Small, E. (November 2019) Another megaproject coming to Flushing from The Real Deal https://therealdeal.com/2019/11/14/another-megaproject-coming-to-flushing/?utm_source=Sailthru&utm_medium=email&utm_campaign=NY%20Weekly%20-%2011.18.19&utm_term=New%20York%20Weekly Accessed November 20 2019