Having wrecked residential housing via rent regulation, some New York pols now want to do likewise to commercial space. Yet a new report shows how the market does pretty well regulating itself.
The report, out last week from the Real Estate Board of New York, shows lower average asking rents this fall compared to last fall for retail space in 11 of Manhattan’s 17 main shopping districts. That has prompted “an uptick in leasing activity and a stabilizing market.”
Rents on Fifth Avenue, for example, fell between 5 percent and 9 percent, while those on Madison between 57th and 72nd streets dropped a full 22 percent. REBNY says an abundance of vacant space helped fuel the declines.
Yet, ironically, as rents were dropping, the brilliant City Council began to consider a bill to inflict rent regulation on commercial landlords. Under the bill, a panel would have to OK rent hikes on storefronts under 10,000 square feet and manufacturing sites under 25,000 square feet.
The rationale? “Time and time again, we’ve seen businesses shutter … due to rent increases,” argues Brooklyn Councilman Stephen Levin, who pushed the bill.
Of course, as The Post’s Steve Cuozzo has noted, stores close for many reasons — like the growth of online shopping — that often have little do with rent. And when too many close and landlords get stuck with property not generating income, they do the obvious: They lower the asking rent.
Meanwhile, REBNY says retailers “are becoming more innovative” in using brick-and-mortar space — to showcase products “in conjunction with their e-commerce and marketing efforts,” for example.
If Levin & Co. really wanted to help shops in the city, they’d stop hitting them with hefty taxes and government mandates, like paid leave and elaborate rules on hiring. The last thing anyone needs, though, is intervention in a market that would do far better without it.
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