S T A T E O F N E W Y O R K
________________________________________________________________________
190
2009-2010 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 7, 2009
___________
Introduced by M. of A. JEFFRIES, WRIGHT, GLICK -- Multi-Sponsored by --
M. of A. PRETLOW -- read once and referred to the Committee on Housing
AN ACT to amend the administrative code of the city of New York, in
relation to hardship rent increases
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 6-a of subdivision c of section 26-511 of the
administrative code of the city of New York is amended to read as
follows:
(6-a) provides criteria whereby as an alternative to the hardship
application provided under paragraph six of this subdivision owners of
buildings acquired by the same owner or a related entity owned by the
same principals three years prior to the date of application may apply
to the division for increases in excess of the level of applicable
guideline increases established under this law based on a finding by
the commissioner that such guideline increases are not sufficient to
enable the owner to maintain an annual gross rent income for such build-
ing which exceeds the annual operating expenses of such building by a
sum equal to at least five percent of such gross rent. For the purposes
of this paragraph, operating expenses shall consist of the actual,
reasonable, costs of fuel, labor, utilities, taxes, other than income or
corporate franchise taxes, fees, permits, necessary contracted services
and non-capital repairs, insurance, parts and supplies, management fees
and other administrative costs and mortgage interest. For the purposes
of this paragraph, mortgage interest shall be deemed to mean interest on
a bona fide mortgage including an allocable portion of charges related
thereto. Criteria to be considered in determining a bona fide mortgage
other than an institutional mortgage shall include[;]: condition of the
property, location of the property, the existing mortgage market at the
time the mortgage is placed, the term of the mortgage, the amortization
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00336-01-9
A. 190 2
rate, the principal amount of the mortgage, security and other terms and
conditions of the mortgage. The commissioner shall set a rental value
for any unit occupied by the owner or a person related to the owner or
unoccupied at the owner's choice for more than one month at the last
regulated rent plus the minimum number of guidelines increases or, if no
such regulated rent existed or is known, the commissioner shall impute a
rent consistent with other rents in the building. The amount of hardship
increase shall be such as may be required to maintain the annual gross
rent income as provided by this paragraph. The division shall not grant
a hardship application under this paragraph or paragraph six of this
subdivision for a period of three years subsequent to granting a hard-
ship application under the provisions of this paragraph OR WHERE THE
TENANT HAS NOT RECEIVED NOTICE OF SUCH APPLICATION AND BEEN GIVEN AN
OPPORTUNITY TO BE HEARD WITH RESPECT THERETO; PROVIDED, HOWEVER, THE
PROVISION FOR BEING HEARD SHALL NOT REQUIRE AN ADJUDICATORY OR OTHER
FORMAL HEARING. The collection of any increase in the rent for any hous-
ing accommodation pursuant to this paragraph shall not exceed six
percent in any year from the effective date of the order granting the
increase over the rent set forth in the schedule of gross rents, with
collectability of any dollar excess above said sum to be spread forward
in similar increments and added to the rent as established or set in
future years. No application shall be approved unless the owner's equity
in such building exceeds five percent of: (i) the arms length purchase
price of the property; (ii) the cost of any capital improvements for
which the owner has not collected a surcharge; (iii) any repayment of
principal of any mortgage or loan used to finance the purchase of the
property or any capital improvements for which the owner has not
collected a surcharge and (iv) any increase in the equalized assessed
value of the property which occurred subsequent to the first valuation
of the property after purchase by the owner. For the purposes of this
paragraph, owner's equity shall mean the sum of (i) the purchase price
of the property less the principal of any mortgage or loan used to
finance the purchase of the property, (ii) the cost of any capital
improvement for which the owner has not collected a surcharge less the
principal of any mortgage or loan used to finance said improvement,
(iii) any repayment of the principal of any mortgage or loan used to
finance the purchase of the property or any capital improvement for
which the owner has not collected a surcharge, and (iv) any increase in
the equalized assessed value of the property which occurred subsequent
to the first valuation of the property after purchase by the owner.
S 2. This act shall take effect immediately provided that the amend-
ment to section 26-511 of the rent stabilization law of nineteen hundred
sixty-nine made by section one of this act shall expire on the same date
as such law expires and shall not affect the expiration of such law as
provided under section 26-520 of such law.