De Blasio is considering a vacancy tax for landlords who leave their storefronts empty

April 2, 2018

In the “it’s about time” department, the New York Post reports that Mayor Bill de Blasio is considering a tax that would discourage retail landlords from letting their properties sit vacant, depriving potential local businesses of opportunity while giving the middle finger to neighborhood morale. Addressing the rising number of vacant storefronts in just about every neighborhood in the city, the mayor said Friday on WNYC that he would like to see a penalty in place for landlords who leave storefronts sitting unoccupied, presumably waiting for big-ticket tenants who have yet to materialize.

The mayor said on “The Brian Lehrer Show,” “I am very interested in fighting for a vacancy fee or a vacancy tax that would penalize landlords who leave their storefronts vacant for long periods of time in neighborhoods because they are looking for some top-dollar rent; they blight neighborhoods by doing it. That is something we could get done through Albany.”

Recent studies have pointed out what any observant pedestrian can see: The fact that retail corridors even in the most prosperous and burgeoning Manhattan and Brooklyn neighborhoods–like Bleecker Street in the Village–are experiencing double-digit vacancy rates. Vacancy rates have reached 27 percent on Amsterdam Avenue on the Upper West Side and 20 percent along stretch of Broadway in Soho (five percent or less is considered “healthy”). Even with real estate on a seemingly never-ending upswing and neighborhoods booming, many of the city’s bustling corridors resemble ghost towns, with storefront after storefront shuttered for what seems like years.

According to a December City Council report, Manhattan’s overall vacancy rates jumped from 2.1 percent to 4.2 percent between 2012 and 2017. The report pointed a finger at property owners demanding stratospheric rents at a time when brick-and-mortar business are dealing with the strains of competition from online retailers. “Many landlords prefer to wait for area rents to increase before committing their real estate to long-term leases with relatively fixed terms. If these landlords have deep pockets and large property portfolios, it may make more financial sense to claim a tax loss on vacant property than to rent at a non-optimal value.”

Local residents who complained when chain stores appeared say the swaths of vacant storefronts after old-time tenants or new ones just getting a foodhold have had to move out are worse. “This neighborhood is just so blah. First it was cute little self-own shops, then it turned into Burberry, Coach and Juicy, and now these stores sit empty. Even my kids even notice,” said one West Village resident of over a decade.

The mayor said a vacancy fee or tax was one among a “whole host of things” he’s battling for as part of the new budget package. When contacted, the mayor’s office told the Post that the idea was still in the planning phases.

Manhattan Borough President Gale Brewer has been advocating for just such a tax since last year, citing the discovery that there were 188 empty storefronts on Broadway, with the highest number in Morningside Heights. She also supports a requirement–currently being considered by City Council–that landlords with empty commercial spaces register in an official database so the city can keep track of the vacancies.

[Via NYPost]


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