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Cornell Law Review

Keywords

Small businesses, Commercial rent regulation

Abstract

This Note surveys the current status of small businesses and commercial tenant law in New York City and discusses whether or not the Small Business Jobs Survival Act (SBJSA) and commercial rent control are constitutional in light of current regulatory takings jurisprudence. Part I surveys the history of land use regulations in the city, the introduction of residential rent control, and the city's brief flirtation with commercial rent control in the mid-20th century. Part II explains the decline and current state of small businesses and the commercial law regime in the city, including the SBJSA proposal. Part III describes the origins and current state of regulatory takings law in light of the Supreme Court's 2017 decision in Murr v. Wisconsirt Part IV evaluates whether the SBJSA is constitutional in light of that recent takings jurisprudence. Finally, this Note concludes that the SBJSA would constitute a regulatory taking when it comes to commercial spaces that are free-standing or under separate ownership from the residential units above them in mixed-use structures. However, when a commercial space in a mixed-use building is under the same ownership as the residential units in that building, then the SBJSA would not constitute a regulatory taking. This appears to be a paradoxical result, but it is one that is nonetheless grounded in current regulatory takings law. Ultimately, the possibility of the municipal government having to provide compensation to even some commercial landlords for regulatory takings would likely render the SBJSA impracticable and prohibitively costly. Therefore, this Note recommends that City Council and small-business advocates seek other avenues to curb the decimation of small business in the city. This conclusion has implications far beyond New York City, affecting any municipality that wishes to introduce commercial rent regulation.

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