S 8319: Enacts the "New York city small business rent stabilization act" instituting a commercial rent control system in the city of New York; creates the commercial rent guidelines board.

  
  STATE OF NEW YORK ________________________________________________________________________ 8319 2025-2026 Regular Sessions  IN SENATE June 2, 2025 ___________ Introduced by Sen. SALAZAR -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the administrative code of the city of New York, in relation to enacting the "New York city small business rent stabiliza- tion act" The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "New York city small business rent stabilization act". 3 § 2. Title 22 of the administrative code of the city of New York is 4 amended by adding a new chapter 15 to read as follows: 5 CHAPTER 15 6 COMMERCIAL RENT STABILIZATION 7 § 22-1501 Application. This chapter applies to all leases and rental 8 agreements for commercial spaces that are renewed, renegotiated, or 9 entered into on or after July first, two thousand twenty-five. 10 § 22-1502 Definitions. As used in this chapter, the following terms 11 shall have the following meanings unless the context requires otherwise: 12 a. "Administering agency" shall mean any city agency, office, depart- 13 ment, division, bureau or institution of government, the expenses of 14 which are paid in whole or in part from the city treasury, as the mayor 15 shall designate or establish to implement and enforce the provisions of 16 this chapter. 17 b. "At-will tenant" shall mean a tenant, subtenant, lessee, sublessee, 18 or any other persons lawfully entitled to use or occupy any commercial 19 premises without a written lease or other rental agreement, who has paid 20 rent to a landlord for at least six months. 21 c. "Board" shall mean the commercial rent guidelines board established 22 by subdivision a of section 22-1503 of this chapter. 23 d. "Chain business" shall mean an establishment that is part of a 24 group of establishments that share a common landlord or principal who EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09129-03-5 
 S. 8319 2 1 owns at least thirty percent of each establishment where such establish- 2 ments: 3 (1) engage in the same business; or 4 (2) operate pursuant to a franchise agreement with the same franchisor 5 as defined in section six hundred eighty-one of the general business 6 law. 7 e. "Commercial space" shall mean a space used or occupied for non-re- 8 sidential purposes pursuant to a valid commercial lease or other rental 9 agreement and any space that can be so used pursuant to law or regu- 10 lation. 11 f. "Commissioner" shall mean the head of the administering agency. 12 g. "Landlord" shall mean any owner, lessor, sublessor or other person 13 entitled to receive rent for the use or occupancy of any commercial 14 premises, or an agent thereof. 15 h. "Pass-along" shall mean any taxes, sewer, water or utility fee, or 16 other operating charges apportioned to a tenant in connection with the 17 use or occupancy of any commercial space, but shall not include any 18 charges that are individually metered to reflect the tenant's exclusive 19 use of such space, including water, sewer and utility fees. 20 i. "Rent" shall mean any consideration, including but not limited to 21 pass-alongs, received by the landlord in connection with the use or 22 occupancy of any commercial space. 23 j. "Services" shall mean those facilities which enhance the use of the 24 commercial premises, including, but not limited to, repairs, mainte- 25 nance, painting, heat, hot and cold water, utilities, elevator service, 26 security devices and patrols, furnishings, storage, janitorial and land- 27 scaping services, refuse removal, insurance protection, parking spaces 28 and facilities in common areas of the building or parcel in which the 29 rental unit is located. 30 k. "Tenant" shall mean a tenant, subtenant, lessee, sublessee, or any 31 other persons lawfully entitled to use or occupy any commercial prem- 32 ises. 33 § 22-1503 Commercial rent guidelines board. a. There shall be a 34 commercial rent guidelines board consisting of nine members appointed by 35 the mayor as follows: 36 (1) One public member to serve as the chairperson of the board; 37 (2) Two members representing commercial tenants which are not chain 38 businesses; 39 (3) Two members representing commercial landlords, at least one of 40 whom shall be a landlord owning ten or fewer commercial spaces; and 41 (4) Four additional public members, each of whom has at least five 42 years of experience in finance, economics, real property management, 43 community organizing, or community development, which shall not include 44 commercial landlords or persons who are employed by or representing a 45 business improvement district. No public member of the board may own or 46 manage any commercial rental property affected by the board's orders or 47 be an officer in any organization representing tenants or owners. 48 b. The members of the board, except the chairperson, shall serve stag- 49 gered terms of two years. Four members of the board originally 50 appointed, comprising one member representing tenants, one member 51 representing landlords and two public members, shall serve until January 52 first, two thousand twenty-eight. The other members of the board 53 originally appointed, excluding the chairperson, shall serve until Janu- 54 ary first, two thousand twenty-nine. Thereafter, all members shall 55 serve two-year terms on the board until their successors have been 
 S. 8319 3 1 appointed and qualified, except the chairperson, who shall serve at the 2 pleasure of the mayor. 3 c. The mayor shall fill any vacancy that may occur in the same manner 4 as the original appointment. A member of the board, other than the 5 chairperson, may only be removed by the mayor for cause after an oppor- 6 tunity to be heard in person or by counsel, in the member's defense, 7 upon at least ten days written notice. 8 d. The chairperson shall be the chief administrative officer of the 9 board and shall have the authority to employ, assign and supervise the 10 members of the board and enter into contracts for consultant services. 11 The commissioner shall cooperate with the board and may assign personnel 12 and perform such services in connection with the duties of the board as 13 may reasonably be required by the chairperson. 14 e. The members of the board shall be compensated on a per diem basis 15 for no more than fifty days per year at a rate to be determined by the 16 mayor, and the chairperson shall be compensated on a per diem basis for 17 no more than one hundred days per year at a rate to be determined by the 18 mayor. 19 f. The board shall establish initial guidelines for commercial rent 20 adjustments by the first of July next succeeding appointment of the last 21 member of the board. Thereafter, the board shall establish annual 22 guidelines to be filed in accordance with subdivision g of this section. 23 In determining whether to adjust rents for commercial spaces subject to 24 the commercial rent stabilization provisions of this chapter, the board 25 shall consider, among other things: 26 (1) The economic condition of the commercial real estate industry in 27 the community board district, including such factors as: 28 (i) commercial real estate taxes and sewer and water rates; 29 (ii) gross operating and maintenance costs, including but not limited 30 to insurance rates, governmental fees, fuel and labor costs; 31 (iii) costs and availability of financing, including effective rates 32 of interest; and 33 (iv) the overall supply of commercial spaces and overall vacancy 34 rates; 35 (2) Relevant data from the current and projected market values of 36 commercial rentals in the community board district; 37 (3) The socioeconomic and demographic changes in each community board 38 district based on the most recent available data, including but not 39 limited to changes in: 40 (i) the median income level; 41 (ii) education; 42 (iii) race; 43 (iv) ethnicity; and 44 (v) home ownership; and 45 (4) Any other relevant data available to the board. 46 g. Not later than July first of each year, the board shall file with 47 the city clerk its guidelines for the preceding calendar year, and shall 48 accompany such findings with a statement of the maximum rate or rates of 49 rent adjustment, if any, for all commercial spaces subject to the 50 provisions of this chapter authorized for leases or other rental agree- 51 ments commencing on the first of October next succeeding or within 52 twelve months thereafter. Such guidelines and statement shall be 53 published in the city record. 54 h. Prior to the annual adjustment of the level of rents provided for 55 under subdivision f of this section, the board shall hold at least two 56 public hearings for the purpose of collecting information relating to 
 S. 8319 4 1 all factors set forth in subdivision f of this section, and any other 2 relevant information as may be necessary for establishing the annual 3 adjustment guidelines. The board shall provide notice of the date, time 4 and location and a summary of the subject matter of the public hearings, 5 to be published in the city record daily for the period beginning eight 6 days prior to the hearing date, and at least once in one or more newspa- 7 pers of general circulation at least eight days immediately preceding 8 such hearing date. 9 i. Maximum rates of rent adjustment shall not be established more than 10 once annually for any commercial space subject to the provisions of this 11 chapter. Once established, no such rate shall, within the one-year peri- 12 od, be adjusted by any surcharge, supplementary adjustment or other 13 modification except as provided in section 22-1508 of this chapter. 14 j. The administering agency shall publish a form lease required to be 15 used by landlords in establishing new tenancies after the effective date 16 of this chapter. 17 § 22-1504 Stabilization provisions. a. Upon execution or renewal of a 18 lease for commercial space, the annual rent charged for the new lease 19 term shall not exceed the initial legal regulated rent or legal regu- 20 lated rent adjusted pursuant to section 22-1508 of this chapter until 21 such time as a different legal regulated rent shall be authorized pursu- 22 ant to guidelines adopted by the board established under section 22-1503 23 of this chapter. No landlord subject to the provisions of this chapter 24 shall charge or collect any rent that exceeds the initial legal regu- 25 lated rent or legal regulated rent adjusted pursuant to section 22-1508 26 of this chapter until such time as a different legal regulated rent has 27 been authorized pursuant to guidelines adopted by the board. For any 28 lease exceeding one year, the rent charged for any subsequent year shall 29 not exceed the legal regulated rent as authorized pursuant to the most 30 recent guidelines adopted by the board. If the rent charged for the 31 first year of the new lease is less than the initial legal regulated 32 rent or the legal regulated rent adjusted pursuant to section 22-1508 of 33 this chapter, the rent charged for any subsequent year shall not exceed 34 the first year's rent adjusted by the rate authorized pursuant to the 35 most recent guidelines adopted by the board. 36 b. The initial regulated rent for a commercial space subject to the 37 provisions of this chapter is the rent charged in the lease or other 38 rental agreement for such commercial space in effect sixty days prior to 39 the effective date of this chapter. 40 c. The initial regulated rent for a commercial space subject to the 41 provisions of this chapter, that is not subject to a lease or other 42 rental agreement on the effective date of this chapter, shall be the 43 rent charged in the last lease or other rental agreement for such 44 commercial space in effect prior to the effective date of this chapter. 45 However, if a claim alleging commercial tenant harassment pursuant to 46 chapter nine of this title is brought against a landlord by the previous 47 tenant as the means by which the vacancy was effected and such previous 48 tenant's claim is upheld by a court of competent jurisdiction, such 49 landlord shall be liable for damages up to ten times the proposed new 50 lease's monthly rent or fifty thousand dollars, whichever is greater, to 51 be payable to the previous tenant, in addition to consequential damages 52 and any other remedy available at law or equity. 53 d. Upon a finding of commercial tenant harassment pursuant to chapter 54 nine of this title, the rent for the new tenant shall be no higher than 55 the rent that could have been charged to the previous tenant pursuant to 56 subdivision a of this section, retroactive to the beginning of the new 
 S. 8319 5 1 tenancy. All other terms and conditions of the lease shall conform to 2 the provisions of subdivision a of this section. 3 e. If a tenant is an at-will tenant, such tenant has the right to 4 request a written lease agreement that shall conform to the provisions 5 of subdivision a of this section and be a monthly rent equivalent to the 6 amount such tenant is paying at the time of such request. The landlord 7 of an at-will tenant shall provide a written lease offer within ninety 8 days of receiving such a request for a written lease. A landlord shall 9 only be able to refuse to provide a written lease or evict an at-will 10 tenant based on the provisions under section 22-1510 of this chapter, 11 except for the provision set forth in paragraph two of such subdivision. 12 § 22-1505 Enforcement and procedures. a. Subject to the conditions and 13 limitations of this section, any landlord who, upon the complaint of a 14 tenant, is found by the commissioner, after a reasonable opportunity to 15 be heard, to have collected an overcharge above the rent authorized for 16 a commercial space subject to the provisions of this chapter, is liable 17 to such tenant for a penalty equal to three times the amount of such 18 overcharge. If the landlord establishes, by a preponderance of the 19 evidence, that the overcharge was not intentional, the penalty shall be 20 the amount of the overcharge plus interest assessed from the initial 21 date of such overcharge. After a complaint of rent overcharge has been 22 filed and served on a landlord, the voluntary adjustment of the rent 23 and/or the voluntary tender of a refund of rent overcharges shall not be 24 considered by the commissioner as evidence that such overcharge was not 25 willful. 26 b. The legal regulated rent for purposes of determining an overcharge 27 is the rent indicated in the annual registration statement filed and 28 served upon the tenant six years prior to the most recent registration 29 statement, or, if more recently filed, the initial registration state- 30 ment plus, for each case, any subsequent lawful increases and adjust- 31 ments. The commissioner, in investigating complaints of overcharge and 32 in determining legal regulated rent, shall consider all available rent 33 history which is reasonably necessary to make such determinations. As to 34 complaints filed within ninety days of the initial registration of a 35 commercial space, the legal regulated rent is deemed to be the rent 36 charged on the date six years prior to the date of the initial registra- 37 tion of the commercial space or, if the commercial space was subject to 38 this chapter for less than six years, the initial legal regulated rent 39 plus, in each case, any lawful increases and adjustments. Where the rent 40 charged on the date six years prior to the date of the initial registra- 41 tion of the commercial space cannot be established, such rent shall be 42 established by the commissioner based on, among other things, the 43 factors set forth in paragraph one of subdivision f of section 22-1503 44 of this chapter. 45 c. Complaints under this section may be filed with the commissioner at 46 any time, however any recovery of overcharge penalties shall be limited 47 to the six years preceding the complaint. 48 d. In addition to applicable penalties, a landlord found to have over- 49 charged a tenant may be assessed the reasonable costs and attorneys' 50 fees of any necessary proceeding and interest from the initial date of 51 the overcharge at the rate of interest payable on a judgment pursuant to 52 section five thousand four of the civil practice law and rules. 53 e. A tenant may, upon the expiration of the period in which the land- 54 lord may institute a proceeding pursuant to article seventy-eight of the 55 civil practice law and rules, file and enforce an order of the commis- 56 sioner awarding penalties in the same manner as a judgment. 
 S. 8319 6 1 f. The commissioner shall promulgate all rules and regulations neces- 2 sary for the implementation of this section. 3 § 22-1506 Rent registration. a. Each landlord of a commercial space 4 subject to the provisions of this chapter shall register such space with 5 the administering agency within one hundred twenty days of the effective 6 date of this chapter and annually thereafter using forms prescribed by 7 the commissioner and including copies of all leases and riders thereto. 8 The information to be provided on such forms shall include the follow- 9 ing: 10 (1) The name and address of the building or group of buildings or 11 development in which such commercial space is located and the tenant 12 thereof; 13 (2) The number of commercial spaces belonging to such landlord in the 14 building or group of buildings or development in which such commercial 15 space is located; 16 (3) The number of commercial spaces in such building or group of 17 buildings or development subject to the provisions of this chapter; 18 (4) The rent for the commercial space charged on the registration 19 date; and 20 (5) The square footage of each commercial space named pursuant to 21 paragraph one of this subdivision. 22 b. Within thirty days of the registration of a commercial space, the 23 administering agency shall mail a copy of the registration forms submit- 24 ted by the landlord of the commercial space and a complete rental histo- 25 ry for the unit to each tenant of such commercial space. The rental 26 history shall include, if applicable, any overcharges, rent adjustments, 27 the effective date of any new and collectible rents, and any tax bene- 28 fits or financing programs that apply to the building. The administering 29 agency shall inform the tenant of such commercial space of the registra- 30 tion and of the tenant's option to apply for an adjustment of the 31 initial rent pursuant to section 22-1508 of this chapter within thirty 32 days of such registration. 33 c. A landlord of a commercial space subject to the provisions of this 34 chapter who fails to register such space within one hundred twenty days 35 of the effective date of this chapter shall be in violation of this 36 chapter and subject to a civil penalty for each month until such 37 violation is corrected as follows: 38 (1) For the first six-month period, one hundred dollars per month; 39 (2) For the second six-month period, two hundred fifty dollars per 40 month; 41 (3) For the third six-month period, one thousand dollars per month; 42 and 43 (4) For the fourth six-month period and for each month thereafter, two 44 thousand dollars per month. 45 d. For a second or subsequent violation of this chapter involving the 46 same unit, the commissioner may impose and recover a civil penalty for 47 each month until such violation is corrected as follows: 48 (1) For the first six-month period, two hundred dollars per month; 49 (2) For the second six-month period, four hundred fifty dollars per 50 month; 51 (3) For the third six-month period, two thousand dollars per month; 52 and 53 (4) For the fourth six-month period and for each month thereafter, 54 four thousand dollars per month. 55 e. In any year where an owner fails to provide a complete, accurate 56 registration, the owner shall be prohibited from any increases to the 
 S. 8319 7 1 rent from the previous registered lease until all missing registrations 2 are filed and false registrations corrected. 3 § 22-1507 Fees. a. The department of finance shall collect from the 4 landlord of each commercial space registered pursuant to section 22-1506 5 of this chapter an annual fee in the amount of one hundred dollars for 6 each commercial space subject to this chapter, in order to defray costs 7 incurred in administering this chapter. 8 b. Failure to pay the fee imposed by subdivision a of this section 9 shall constitute a charge due to the city. All such fees due to the city 10 constitute a debt recoverable from the landlord and the city may 11 commence an action or proceeding, file a lien upon the building or take 12 any other lawful action for the recovery of such fees. 13 § 22-1508 Application for adjustment of initial rent. Notwithstanding 14 any other provision of this chapter, a tenant or landlord may, within 15 sixty days of receipt of the notice of registration pursuant to section 16 22-1506 of this chapter, file with the board an application for adjust- 17 ment of the initial legal regulated rent for such commercial space. In 18 the event of such an application, both the owner and the tenant shall be 19 notified and given a chance to respond to the application within thirty 20 days. The board may adjust such initial legal regulated rent upon a 21 finding that the presence of extraordinary circumstances materially 22 affecting the initial legal regulated rent has resulted in a rent which 23 is substantially different from the rents generally prevailing in the 24 same area for substantially similar commercial spaces. 25 § 22-1509 Manner of service. All papers and notices which, pursuant to 26 the terms of section 22-1510 of this chapter are required to be served, 27 shall be served by a process server, or shall be sent by first-class 28 mail and certified mail, return receipt requested or by any express mail 29 service. 30 § 22-1510 Rental guidelines. a. All leases of a commercial premises 31 may be renewed at the option of a tenant who did not lose the right to 32 renew a lease under the grounds described in subdivision d of this 33 section. Such lease renewals shall be for a minimum term of ten years, 34 provided however, that at the tenant's option, and with the written 35 approval of the landlord, a lease of shorter or longer duration may be 36 selected. 37 b. No period of lease extension required by this chapter shall extend 38 beyond the landlord's lawful ability to rent the premises to the tenant, 39 where such ability is limited by: 40 (1) the obligation to rent the premises to a third party pursuant to a 41 bona fide lease entered into prior to the effective date of this chap- 42 ter; 43 (2) the exercise by a third party of a bona fide option to rent the 44 premises provided that such option was given prior to the effective date 45 of this chapter; or 46 (3) any other lawful reason arising prior to such effective date. 47 c. A tenant shall lose the right of renewal and a landlord may refuse 48 to renew a lease only on the following grounds: 49 (1) The tenant has persistently delayed rent payments without cause. 50 For the purpose of this subdivision, "cause" is defined as the withhold- 51 ing of rental payments by the tenant due to the alleged violations of 52 the rental agreement by the landlord. In order for the landlord to be 53 excused from renewal on this ground, the landlord must have served the 54 tenant at least three prior notices during the term of the lease for 55 demand of payment within thirty days, and then show that such lessee has 56 not paid within such thirty-day period. The landlord shall not serve 
 S. 8319 8 1 such notice unless the rent payment was in arrears for a minimum of 2 fifteen days; 3 (2) The tenant uses the commercial premises in a manner substantially 4 different from that described in the lease; 5 (3) The tenant conducts or permits any form of illegal activity on the 6 premises; 7 (4) The tenant has substantially breached any substantive obligation 8 under the current lease and has failed to cure such breach within thirty 9 days following written notice to cure by the landlord; 10 (5) Upon the termination of the current tenancy, the landlord intends, 11 in good faith, to demolish or substantially reconstruct the premises or 12 a substantial part thereof, or to carry out substantial work or 13 construction on the commercial premises or substantial part thereof 14 which they could not reasonably do without obtaining possession of the 15 commercial premises. The landlord shall notify the tenant of their deci- 16 sion to reoccupy the commercial premises at least one year prior to the 17 termination of the lease. In the event that the lessor fraudulently 18 invokes this justification for a refusal to renew a commercial lease, 19 the defrauded tenant may collect treble damages for any loss suffered as 20 a result of such action; 21 (6) The current tenancy was created by the subletting of the property, 22 whereby the prime tenant did not notify the landlord by certified mail 23 of the subtenant's existence and did not obtain the written consent of 24 the landlord. This ground is void if the landlord and tenant had agreed 25 in the lease to allow subleasing rights without the consent of the land- 26 lord and all obligations of the prime tenant on the issue, were in 27 compliance; 28 (7) It has been determined by the administering agency or by a civil 29 court of competent jurisdiction that the tenant is a gross and persist- 30 ent violator of New York city tax laws, of any license obligations 31 related to the use of the premises or of any laws of the city of New 32 York; or 33 (8) Upon the termination of the current tenancy, the landlord intends 34 to occupy the retail premises in order to carry out its own business, 35 which cannot be the same type of business that the current tenant is 36 operating. The landlord shall notify the tenant of their decision to 37 reoccupy the premises at least one hundred eighty days prior to the 38 termination of the lease. In the event that the landlord fraudulently 39 invokes this justification for a refusal to renew a commercial lease, 40 the defrauded tenant may collect treble damages for any loss suffered as 41 a result of such action. 42 § 22-1511 Retaliation. No landlord shall in any way retaliate against 43 any tenant for the tenant's assertion or exercise of any rights under 44 this chapter. Any such retaliation may subject the landlord to a suit 45 for actual and punitive damages, injunctive relief, and attorneys' fees. 46 § 22-1512 Waiver. No provision in any lease, rental agreement, or 47 agreement made in connection therewith which waives or diminishes any 48 tenant's rights under this chapter is valid. 49 § 22-1513 Inconsistency with other laws. If any provision of this 50 chapter is inconsistent with, in conflict with, or contrary to any other 51 provisions of law, such provision of this chapter shall prevail over 52 such other provision. 53 § 3. Severability. If any clause, sentence, paragraph, section or part 54 of this act shall be adjudged by any court of competent jurisdiction to 55 be invalid and after exhaustion of all further judicial review, the 56 judgment shall not affect, impair or invalidate the remainder thereof, 
 S. 8319 9 1 but shall be confined in its operation to the clause, sentence, para- 2 graph, section or part of this act directly involved in the controversy 3 in which the judgment shall have been rendered. 4 § 4. This act shall take effect on the thirtieth day after it shall 5 have become a law. Effective immediately, the addition, amendment 6 and/or repeal of any rule or regulation necessary for the implementation 7 of this act on its effective date are authorized to be made and 8 completed on or before such effective date.