Small Business Jobs Survival Act Sows Division at City Hall Council Holds Public Hearing on Much-Debated Bill

A rally held at City Hall about SBJSA on October 22, 2018 (Mike Odenthal)

Things got somewhat contentious at City Hall earlier this week over proposed legislation that would impact both the city’s commercial tenants and landlords, amid the ongoing trend of small and beloved neighborhood businesses closing down due to high rents.

On Monday, the City Council held a public hearing to debate the merits of the Small Business Jobs Survival Act (SBJSA), a bill that proposed to establish a 10-year minimum for leases and right to renew, in order to allow small businesses adequate time in which to establish themselves at a particular location; grant commercial tenants more agency when negotiating renewal by turning landlord/tenant disagreements over to third-party arbitration; and restrict landlords from passing property taxes down to businesses.

The bill’s supporters argue that such legislation would prevent rent gouging by landlords, prevent job losses as a result of businesses from going under to excessive rent increases, maintain a level playing field for business owners, and preserve the character of the neighborhood.  However, opponents, particularly the real estate industry, characterize it as commercial rent control that would impede neighborhoods’ natural evolution--not to mention that the bill itself also raises constitutional questions. In addition to the real estate industry, the de Blasio administration opposed the SBJSA.

Duking It Out

At the hearing, John Banks, the president of the Real Estate Board of New York (REBNY)  said, as The Real Deal reported: “This legislation will do nothing to solve the underlying issues behind storefront vacancies, and instead would have a catastrophic impact on our local economy.” He also said the SBJSA would kill jobs, “ensure homogenization of retail,” and make property owners reluctant to take on new and small businesses. Banks also claimed that the city had no legal authority to pass the bill, and that the industry would challenge it.

City Council Speaker Corey Johnson pushed back on Banks’ claim over the city’s jurisdiction on the issue. “We have some legal authority. We’ll figure out what that authority is,” he told Banks at the hearing. He also acknowledged that the bill would not be “a silver bullet,” and it has to be presented in a way that doesn’t include all commercial businesses, which this current version of the legislation does. “It’s not perfect,” he said of the bill. “It should not treat a WeWork in the same way as a bodega.”

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