Why Commercial Rent Regulation Is Needed

By Raanan Geberer
Originally from Brooklyn Daily Eagle, 2006

The recent news of the closure of the Musicians General Store, the musical-instrument store in Cobble Hill, is saddening–but hardly unique.
In another example, in Manhattan, an entire block of stores on Eighth Avenue north of 14th Street, including the Cajun jazz club, one of the few places to hear 1920s-style jazz in the city, was forced to close down. Don’t forget, also, what happened to the Bottom Line and CBGB’s. And the same thing is happening to many small neighborhood restaurants.
What’s going on here?
Nine times out of ten, the owners of these buildings are kicking out these stores in hopes that a chain store will move in. Many large retail chains, it seems, have no limit on what they are going to spend. For example, where I live, you have a Duane-Reed, a CVS and a Rite-Aid within three blocks of each other. The market clearly isn’t big enough for all three, but there they are. And there is a second Duane-Reed coming five blocks away!
I have nothing against chain stores. For years, chain stores such as the A&P and Woolworth’s co-existed with small "mom-and-pop" stores. In many underdeveloped areas, chain stores have played an important, valuable role in bringing these neighborhoods back to life–for example, look at the Lowe’s in Gowanus.
But in general, however, building owners have let themselves be carried away with dreams of easy money and quick fortunes, not just a reasonable profit. Forest City Ratner, in its Atlantic Terminal and Atlantic Center malls, has allocated space only to chain stores, without any set-aside for local merchants.
Under these circumstances, the idea the "owning your own business" is the ultimate dream for people has turned out to be a cruel joke.
Quite a few years ago, a former City Council member, Stan Michaels, who represented Washington Heights, sponsored a measure to introduce commercial rent regulation in this city. Needless to say, it failed. When I asked his assistant about it a year or so later, I was told that there was no support for it, and that efforts were being concentrated on lowering taxes for commercial buildings so that the owners wouldn’t have to charge such high rents.
Whoever made the last argument doesn’t understand human nature. While there are doubtless some ethical businesspeople, there are as many, or more, who are not. As the influence of traditional ethics, religious faith and civic responsibility wanes, it is increasingly replaced by an attitude of "I’m going to get as much for myself as I can, and to hell with everybody else." That’s why the government must step in as an arbiter among diverse groups (in this case, store-owners and commercial building owners) who would destroy each other otherwise.
This is why the idea of commercial rent regulation should be revived.