Restaurateurs in New York City could have an easier time finding affordable new locations under an unusual plan aired by Mayor Bill de Blasio on Friday for curbing business rents and storefront vacancies.
The mayor mentioned during his weekly radio address that he’s ready to fight for a “vacancy tax” on commercial sites that remain vacant. He described the measure as a way of pressuring landlords to accept lower rents, since holding out for a higher monthly fee would expose them to an extra levy on real estate that isn’t generating revenue. Their profits could be severely cut, depending on the size of the charge.
The owners of prime commercial sites often let sites sit vacant, sometimes for years, until they can find a tenant with deep enough pockets. Prominent local restaurant groups such as Union Square Hospitality Group and BR Guest have balked at renewing leases because of the new rents demanded by their landlords.
“They’re looking for some top-dollar rents,” de Blasio said in his weekly broadcast on the local public radio station, WNYC. “I think there should be penalties for landlords who do that.”
One in five storefronts sits empty in many prime neighborhoods of Manhattan because of the warehousing, according to local news reports. The overall vacancy rate for the borough has doubled over the last five years, the City Council noted in a report issued at the end of 2017.
De Blasio indicated during the broadcast that he regards the vacancy tax as a priority that “I’m ready to fight for,” but mentioned the plan in the context of his ongoing budget fight with the government of New York state. The city and state have a complex financial arrangement, where matters usually left to municipalities are subject to approval by lawmakers in Albany.
The mayor has a notoriously strained relationship with New York Gov. Andrew Cuomo, even though both are Democrats and unabashedly liberal. Opposition from Albany could thwart de Blasio’s plan.