The City Council has approved and is now implementing a new law requiring commercial building owners to register rental details for retail, restaurant and service-sector storefronts and second floor spaces with the City. Commercial properties that are already filing their Real Property Income & Expense (RPIE) statement will see this as an additional component to the required filing once it becomes available in mid-February.
Property owners will need to provide information about all occupancies or vacancies that have occurred during the preceding year. This information will include the start date and expiration or renewal of the lease, rent increases contained in the lease, lease concessions, the amount of rent and the economic activity conducted at the premises. Detailed information about vacancies will need to be provided, including dates and details of any construction during the vacancy. Information will need to be filed by owner-occupied businesses as well.
Owners of 1-3 family buildings with commercial tenants who do not normally file RPIE statements, will now do so if their ground floor or second floor commercial premises was vacant or owner-occupied for any period during the prior year. We do not yet know if these owners will also be required to complete all portions of the RPIE and report income and expenses for the entire building.
Property owners should note: There is a penalty for not filing the required information.
Where is this all leading? Within 6 months of gathering this information, the Department of Finance must establish a public online searchable database containing the reported information. It will contain the number of properties with median and average duration of leases, term to expiration, size of rentable floor area, rent, vacant, under construction and the like. This resource will be a boon to brokers and landlords.
This bill was approved as part of a package to address struggling small businesses, training of small business owners, better guidance of City permits and strengthen data collection. While hailed as a “first of its kind” law and an effort to accurately measure vacancies and come up with solutions for filling them, the City’s efforts heretofore have been limited and less than effective.
Urban planners have always preached that street-level commercial activity on residential blocks add to safety, security and quality of life for residential occupants. Whether this will provide solutions to a deepening problem within the City, or just provide another opportunity for penalizing those who do not comply, remains to be seen.
