A new program in Newark aims to help commercial property owners and their tenants who have lost income during the COVID-19 crisis to avoid evictions and foreclosures.
Under the program, property owners and tenants would apply jointly for significant property tax relief in proportion to the property owner’s loss of revenue. In exchange for the property tax relief, the owner agrees to not evict a tenant for non-payment of rent for one year from the date of approval of relief.
The loss in revenue due to COVID-19 for both landlord and tenant will need to be greater than 33% of regular income for the tenant space and respective business in order to qualify.
“With this program, we are seeking to prevent the loss of jobs and rows of empty storefronts which cause blight and demoralize those who live and work here,” said Newark Mayor Baraka. “We need to prevent business tenants from being evicted and commercial owners from suffering foreclosure. This initiative is a step in the right direction.”
Newark will reduce the property tax of the tenant’s space, through cancellation, depending on the specifics of the arrangement between the tenant and property owner. Depending on the length of the shutdown and extent of income loss, the tenant and property owner may re-apply after 12 months.
If commercial tenants are no longer able to pay their full rent during this crisis, property owners will be hard-pressed to pay their property taxes and would be in danger of losing their buildings. The initiative will help Newark avoid a massive surge in vacancies that could damage the city’s economic stability.