The City has the legal authority to suspend rents for commercial tenants impacted by the pandemic and stabilize commercial rents in the long term.
By Paula Z. Segal, Cheryl Walker and Catherine Humphreville
May 15, 2020
Having reduced her restaurant to take-out only because of COVID-19 while retaining all her employees, Norma of North Brooklyn is seeing 30% of her usual revenue. She has not been able to apply for government loan and grant programs because her small restaurant does not have the staffing capacity to complete detailed application forms and financial disclosures. Recently, Norma watched her landlord evict a neighbor through self-help. Out of fear, she agreed to the landlord’s proposal that she pay 50% of her rent with a promise to pay the remainder in the future. Once restaurants like hers can reopen, they do not foresee operating near previous revenues, let alone at a capacity that allows servicing additional debt.
On March 22, Governor Cuomo’s New York State on PAUSE ordered all non-essential businesses to close to protect the public from COVID-19 transmission during the declared “State disaster emergency.” See N.Y. S. Exc. Ord. 202 et seq. Even those allowed to remain open must dramatically scale back their operations, and their customers have been ordered to stay home.
The City has the legal authority to suspend rents for commercial tenants impacted by the pandemic and stabilize commercial rents in the long term. See N.Y. Const., Art. IX (home rule powers); N.Y. Mun. Home Rule L. §51 (providing that home rule powers “shall be liberally construed”); N.Y. S.L.G. §20(5) (same)…
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Paula Z. Segal, Cheryl Walker and Catherine Humphreville each work at not-for-profit legal services providers providing counseling for free to low income small businesses. Paula and Cheryl are at TakeRoot Justice; Catherine is at Brooklyn Legal Services Corporation A.