Socialists take aim at commercial rent

Nearly seven years after state legislators strengthened residential rent stabilization laws in New York City, and two years after they approved “good cause” eviction around the state, democratic socialist lawmakers are looking to add new protections for commercial tenants in the city. But while the push this year at the state level is new, the prospect is an old one with a rocky history.

State Sen. Julia Salazar and Assembly Member Emily Gallagher introduced legislation to create a rent stabilization system for New York City commercial tenants at the end of last year’s legislative session. This year, they’re making a concerted push for what they are now dubbing the Small Business Rent Stabilization Act. 

Former Assembly Member Danny O’Donnell originally introduced the bill in 2020. But he never picked up any co-sponsors in his chamber, nor a counterpart in the state Senate to sponsor it in the upper chamber. O’Donnell retired at the end of 2024, leaving behind the bill which Gallagher took over with Salazar coming on as its first state Senate sponsor. 

The bill would create a nine-member Rent Guidelines Board, similar to the existing one for residential tenants, with each member appointed by the mayor. This board would have oversight to set rent increases for all commercial properties in the city with leases signed after the law takes effect. The proposal would also create the right to a lease renewal, with 10 years as the automatic term for that renewal, unless the landlord can show cause why the lease should not be renewed.

Salazar previously championed the Good Cause Eviction Act, and sees commercial rent stabilization as similarly tackling the same problems around affordability. “We have a very high vacancy rate, significantly higher than residential properties – storefront vacancy rate – in New York City,” Salazar said. “So I would say that the connection is really affordability and a need to level the playing field for both commercial and residential tenants.”

The fight for commercial rent stabilization is hardly new. A New York City Council bill known as the Small Business Survival Act, which dates back to the 1980s, would create the right to a 10-year lease renewal, though it does not include the other aspects of the current state proposal due to restrictions on local control over rent laws. Although city lawmakers have approved a slew of other measures meant to help keep small businesses afloat, the city-level Small Business Survival Act has faced opposition from previous mayors and Council speakers.

What’s also new is that the state bill’s champions are democratic socialists, unlike O’Donnell. Both Salazar and Gallagher are members of the Democratic Socialists of America and are recognized as part of the cadre of socialists in office. In the state Senate, fellow democratic socialist Kristen Gonzalez is currently the only other co-sponsor of the bill. In the Assembly, DSA members Phara Souffrant Forrest and Sarahana Shrestha are two of the three members to have signed on so far.

The legislation has support among members of the small business community, creating something of an unusual alliance between two factions that generally don’t see eye-to-eye. “I think that it demonstrates how powerful the demand is for commercial rent stabilization that basically a coalition that has not previously formed is able to emerge and demand this together,” Salazar said. 

New York City Mayor Zohran Mamdani – famously – is also a democratic socialist supported by DSA. But as a member of the Assembly, he never signed on to previous versions of the commercial rent stabilization bill. A spokesperson for Mamdani did not return a request for comment about whether he would join his former DSA legislative colleagues in backing the measure.

Commercial rent stabilization has previously faced opposition from the real estate industry, and this time is no different. “This is a complex issue that can't be solved with a magic pill – in this case a poison pill – of blanket price controls,” said Ann Korchak, board president of Small Property Owners of New York. She cited factors including e-commerce and access to public transit as other reasons besides high rent that are forcing retail renters to struggle. “Capping the income of small property owners when the expenses and costs to operate and maintain our buildings rise astronomically year-over-year hasn't been the answer on the residential rental side, and it certainly isn't the solution on the commercial retail side either,” Korchack said.