Daily News: NYC Pols Propose Tax Breaks for Landlords Who Go Easy on Small Businesses’ Rent

On August 16, 2020, Shant Shahrigian of the Daily News covered legislation proposed by Senator Kavanagh and his State and City colleagues. The COVID-19 Small Business Recovery Lease Act, bill S8904, would provide for tax abatements for property owners who negotiate affordable leases with their commercial tenants. The article highlights the need for immediate action to help struggling businesses to survive in the coming months and years. The full text of this story is below; the original version is available via the link above.
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NYC pols propose tax breaks for landlords who go easy on small businesses’ rent
By Shant Shahrigian
August 16, 2020

As small businesses across the city struggle to make rent, some local lawmakers are pushing to give landlords tax breaks if they provide more lenient leases.

Landlords would get property tax abatements if they renegotiate leases and limit annual rent increases under the proposal from Councilmen Brad Lander (D-Brooklyn) and Keith Powers (D-Manhattan), state Sen. Brian Kavanagh (D-Brooklyn) and Assemblywoman Yuh-Line Niou (D-Manhattan).

They’re proposing a one-two combo of bills in which the state legislature would authorize the city to provide the landlord incentives.

“So many of our businesses were facing challenges of rent affordability before,” Lander told the Daily News on Sunday. “Now they’re facing giant arrears and overwhelming anxiety about their stability for the future.

“If we want them to survive, we have to show up.”

Under the proposal, landlords would get 10 years of tax breaks if they and small business tenants agree to new leases that renegotiate arrears, or overdue rent, and limit future rent hikes. If the state gives the city the power to oversee such deals, landlords would have a year from passage to apply for tax breaks.

Lander noted the legislation would lay out guidelines for qualifying for the tax break, the exact level of which was yet to be determined — and that the city wouldn’t get involved in every negotiation.

Though the tax exemptions wouldn’t be big enough to cover all of the overdue rent, Lander called the plan a win-win.

“The model here is about sharing the pain,” he said. “Small businesses have borne too much of it and how to apportion it to the city on the one hand and landlords on the other — that’s what the idea is here.”

In a July survey of landlords of rent-stabilized buildings, more than 60% with commercial tenants on the ground floor reported they didn’t get rent, according to the Community Housing Improvement Program.

“We have already seen far too many of our local businesses closed and had too many of our community members laid off,” Niou said in a statement. “It is necessary that we ensure that our remaining small businesses and small business owners who have been financially impacted by the COVID-19 are able to continue to maintain their commercial space through negotiated leases and long-term affordable rents.”

Legislation to create a board to limit how much landlords can raise rent on small businesses has stalled in the City Council. Lander is a co-sponsor of that bill, but said action must be taken now.

“We have an immediate crisis,” he said. “We need something right now to prevent thousands and thousands of small businesses from going out of business.”