Senate Bill S5549

                                 
BILL NUMBER: S5549

SPONSOR: CLEARE
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to prohibiting
exemptions for owners of vacant or unoccupied storefront properties

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would incentivize owners of commercial storefronts to enter
into leases with prospective tenants instead of keeping storefronts
vacant for years while holding out for better deals.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends the real property tax law by adding a new section 498,
which prohibits exemptions for owners of vacant or unoccupied storefront
properties if such property has been vacant or unoccupied for at least
two years.

Section 2 establishes the effective date.
              

 
JUSTIFICATION:

The proliferation and persistence of vacant storefronts is a significant
problem in many neighborhoods throughout the five boroughs. Long-term
storefront vacancies deaden streetscapes, making communities less
vibrant and giving rise to quality-of-life and public safety challenges.

One reason that storefronts remain vacant for long periods is that
owners seek long-term leases at high asking rents, even if either or
both of the desired duration or amount is more than the market can bear.
An owner may determine that the rental income lost by keeping a property
vacant for some period will be less than the cost, over many years, of a
reduction in the rent.

The goal of this bill is to change these economics for owners by
increasing the cost of keeping commercial properties vacant for many
years, through the prohibition of property tax exemptions for such prop-
erties. Faced with the loss of valuable tax exemptions, owners may be
more willing to enter into leases with prospective tenants, even if the
terms are at a discount. By filling vacant storefronts, we can revital-
ize commercial thoroughfares, improve quality-of-life, and boost small
business activity.

 
PRIOR LEGISLATIVE HISTORY:

A.10132 (2017-18): Referred to real property taxation.

A.4963 (2019-20): Referred to real property taxation.

A.4412 (2021-22): Referred to real property taxation.

A.1685 (2023-24): Referred to real property taxation.

 
FISCAL IMPLICATIONS:

Net savings, as fewer property tax exemptions will be granted.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to assessment
rolls prepared on the basis of taxable status dates occurring on or
after such date.