With the defeated pied-à-terre tax in its rearview mirror, the real estate industry is now gearing up to soften the bite of the city’s so-called commercial rent control legislation.
The Real Estate Board of New York is working to propose alternatives to the City Council’s Small Business Jobs Survival Act (SBJSA). The legislation would give commercial tenants a right to a lease renewal, and would have an arbitrator set the rent when a property owner and commercial tenant disagree when it comes time to renegotiate a lease.
“This could be a dramatic thing if it gets approval, and the other side is gearing up and we need to also,” Ackman-Ziff Real Estate Group’s David Robinov, co-chair of REBNY’s Sales Brokers Committee, said at the trade group’s annual cocktail party Tuesday evening.
Opponents to the proposal refer to it as commercial rent control, a term those who support the measure reject on the basis that the proposal doesn’t limit rents the way rent control regulation does for residential apartments.
Robinov said REBNY is looking to propose alternatives to the legislation, such as a tax abatement or credits landlords would receive for giving tenants below-market leases.
REBNY is also working on a social media campaign to push back against the measure. The New York City Bar Association has also come out against the bill.
“We’re not going into this just saying, ‘Stop everything,’” Robinov said. “But it’s really a big deal.”
REBNY spokesperson Jamie McShane said the city’s retail environment is going through a period of transition “primarily due to macro-market forces and increasingly unfriendly local regulations. We will continue a dialogue with elected officials and community stakeholders about how to best support small businesses.”
The lobbying group employed a similar strategy last month, when it proposed a mansion and transfer tax as an alternative to the state’s proposed tax on pricey second homes.
In that policy debate, Wlliam Lie Zeckendorf made a special trip up to Albany with his own lobbyist, a personal friend of Assembly Speaker Carl Heastie, to make his case against the pied-à-terre tax.
And that could be a strategy the real estate industry looks to repeat.
REBNY’s Board of Governors – a group of more than 150 of the most powerful owners, broker and attorneys in the city – recently held a breakfast and encouraged more members to make personal trips up to Albany.
“One of the things that we are not necessarily aware of is that we are badly outgunned with the number of lobbyists that people who oppose us have versus the number we have,” Savills’ Woody Heller, co-chair of REBNY’s Sales Brokers Committee, said at Tuesday evening’s party.
The real estate industry finds itself in a challenging time, as public opinion has become increasingly combative.
Politicians and lawmakers are pledging not to take campaign contributions from industry donors. And in Albany, the newly empowered Democratic majority is focused on a package of sweeping changes to the state’s rent regulation laws.