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New Bill Aims to Save Small NYC Businesses Facing Eviction, Including Restaurants

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Small businesses would be given free legal counsel for an eviction case if the bill is passed

Ultra High Retail Rents In Manhattan Create Increase In Vacant Storefronts Throughout Affluent Sections Of City
 An empty storefront in the West Village
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Small, independently owned restaurants facing eviction may soon get access to free legal help if a new bill proposed today gets signed into law — the latest legislative effort to level the playing field between landlords and the city’s small businesses.

City Councilman Mark Levine plans to propose the legislation today, which would help small businesses fight back against landlords trying to evict them by connecting them to a lawyer free of charge, the WSJ reports. The bill, which applies to commercial tenants including restaurants, is modeled after the Right to Counsel bill that was signed into law in 2017, giving residential tenants access to free legal counsel under similar circumstances.

More and more NYC businesses are closing due to evictions; last year, an average of 153 stores closed each month, up from 143 per month in 2017, though that includes businesses outside of restaurants, according to the WSJ. Levine argues that providing these businesses with a lawyer — many of which can’t afford one on their own — can help keep them afloat.

The lawyer would not only represent the tenant in court, with hopes of pushing off the eviction, but also help the business negotiate better terms like a feasible payment plan for unpaid rent. The bill would apply exclusively to independently owned small businesses. Since the original Right to Counsel bill went into effect, residential evictions dropped 14 percent between 2017 and 2018, the WSJ reports.

Levine’s proposal is yet another attempt to help protect commercial tenants against landlords in NYC.

Last year, a push to give all businesses both big and small the right to a 10-year lease renewal once their lease was up spurred a heated debate. Dubbed the Small Business Jobs Survival Act, that bill also aims to give tenants the right to arbitration if a rent increase is deemed to high.

Supporters argue that the bill, which is still undergoing review, can help save the thousands of mom-and-pop shops that are closing due to peaking rents. Yet some say the law could unintentionally deter landlords from working with smaller tenants like restaurants, in turn favoring big, seemingly reliable businesses like banks instead.

Commercial rent is a tough landscape to navigate in NYC — especially for restaurants that aim to spend no more than 10 percent of their revenues on rent. Many are faced with huge rental hikes once their 10-year leases expire, the new rate of which better corresponds to the surrounding neighborhood’s real estate prices but largely outpaces the restaurant’s financial capacity. Other risings costs, such as labor, have been impacting restaurants in recent years as well.

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