Controversial Jersey City Ordinance to Limit Chain Stores Has Potential Implications for Commercial Property Owners in the Downtown Core

Controversial Jersey City Ordinance to Limit Chain Stores Has Potential Implications for Commercial Property Owners in the Downtown Core

The Jersey City, New Jersey City Council recently approved Mayor Steve Feller’s proposal to limit chain stores in downtown Jersey City in an attempt to protect small business and to preserve the character and appeal of downtown.  The City Council adopted the proposal originally passed by the City Planning Board.  The ordinance limits chains which have ten or more locations within 300 miles of Jersey City to no more than 30% of the downtown commercial space.  Grocery stores would be exempt from the new law.  The Council adopted the ordinance despite opposition from numerous people attending the Council meeting in the audience.

Certainly, the ordinance could be challenged under the Commerce Clause of the Constitution.  Only Congress can regulate interstate commerce.  National chains, restaurants or retailers, are the definition of interstate commerce.

A more interesting question is how this ordinance will affect rents in Jersey City while it is being challenged.  Will the smaller pool of tenants cause a greater inventory, causing rents to drop significantly?  I would think that this would be the case and I am surprised that property owners have not objected more vocally to the ordinance.  While mom and pop businesses might benefit in the short run, in the long run, downtown Jersey City might actually suffer.

Though I personally have never been to Jersey City, and I don’t know what the downtown looks like, I for wonder what the downtown would look like without a Starbucks on every corner.