Tuckahoe Village Departments

TUCKAHOE TALK
With Mayor John Fitzpatrick

RENT RAMIFICATIONS

August 1, 2008

When I took office, many were concerned with empty storefronts on Main Street. Thankfully, this has been mitigated and we certainly have some interesting new stores. But many are now wondering: What is happening in Crestwood? Several of the stores in this section of our village are currently empty. People in Tuckahoe as well as those from Eastchester use this train station and shopping area, making the Crestwood business district an important component of our tax base.

Recently, our board and I researched a subject that I feel is relevant to the conversation concerning Crestwood’s present condition. On July 14, after months of examination and debate, the Tuckahoe Village Board voted on whether or not to adopt the Emergency Tenant Protection Act of 1974 (ETPA). The law states that in all pre-1974 buildings of six or more families, when the overall vacancy rate is below 5%, rents are pinned to county controlled increases. Currently, Tuckahoe’s vacancy rate is about 4%. Tenant activists feel that when there are so few empty apartments, landlords can rent gouge. (By the way, the term "gouge" is theirs, not mine).

The measure failed to achieve adoption by a 3-2 vote. I voted "nay". One of my many reasons was a lack of evidence illustrating landlord impropriety. I also felt one weakness to this law would be enforcement. Who would monitor the vacancy rate? I am against enacting laws that look good on paper but no one enforces. Most importantly, however, I cited a fear that rent controls might raise the number of landlords not investing back into their properties. This could see some buildings deteriorate. I feel the delicate balance required to keep our community both desirable and diverse appears to be working in its present form.

Some may feel rental retail space and rental livable space are like apples and oranges. Nevertheless, I believe similarities do exist. The Crestwood business district, like all others, is based on a "whatever the market will bear" philosophy. As I have already pointed out, I support this viewpoint. Unfortunately, several of these buildings are severely outdated with landlords who may not reinvest until forced to by disaster. The last two electrical fires in our village took place in retail buildings which, in my opinion, the landlords neglected. Regrettably, even a pure free market model isn’t immune from landlord neglect. I will leave to you to imagine what further effect rent restrictions would have on properties.

Since noticing the Crestwood vacancies, I did some investigation. Several rents (per square foot) in the Crestwood section are nearly double the rents of storefronts on Main Street. Obviously, landlords feel that the proximity to so many potential consumers makes it advantageous. Unfortunately, if landlords press the retail establishments in a place such as Crestwood, and the establishments are unsuccessful, we have empty stores or turnover of businesses. If the stores remain empty for a significant period of time, any number of scenarios could play out.

First, a correction cycle could see rents drop since demand is reduced. If they do, it is bad for the Village and the Eastchester school district since taxes are calculated on rent roll. If the rents don’t drop, excessive vacancies have the same negative effect on taxes for the same reason. Our community also runs the risk of more closures due to belt tightening of consumers in a constrictive economy. Additionally, lost sales tax revenue is possible with all of the above scenarios.

Excessive vacancy in older buildings can also be a ripe time for developers to buy these properties and expand within the code. Existing Zoning Law in the case of Crestwood allows three-story businesses. The majority of buildings are now one-story. One might wonder why three story businesses would succeed if single story is unable? The answer is that sometimes developers are able to use the increased square footage to maximize a return on investment. Unfortunately, with increased size comes increased traffic. Our proximity to Tuckahoe Road already makes us a cut-thru for truck traffic - - a design that was advantageous when Tuckahoe was a manufacturing destination, but our transition to a residential village comes with this built-in drawback.

I am not suggesting here that government could do a better job, or even should be attempting to control rents; hence the reason I voted against residential rent control. I do believe government’s role here is to expediently process applications that in the past languished. All projects should be fully vetted before approval. However, delaying potential projects or businesses that are beneficial is dangerous. Any project runs the risk of being scrapped, but the current climate of lending uncertainty and speculation in steel and copper markets increases the odds. We should proactively encourage zoning and business that are in the best interest of our residents.

On a positive note, a new bakery is scheduled for opening in the fall. Interestingly, the new owner approached me as to whether our community would find it objectionable to change the name. Aside from the provincial implications of such a question, I don’t require every business to use the word Crestwood, so as to help me remember where I am. I am in Tuckahoe.