LBD16251-01-2
A. 10718 2
OR IMPROPERLY COMPLETED APPLICATION SHALL STILL BE ELIGIBLE TO RECEIVE A
RENT ADJUSTMENT FOR A MAJOR CAPITAL IMPROVEMENT; or
S 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
tive code of the city of New York, as amended by chapter 116 of the laws
of 1997, is amended to read as follows:
(6) provides criteria whereby the commissioner may act upon applica-
tions by owners for increases in excess of the level of fair rent
increase established under this law provided, however, that such crite-
ria shall provide (a) as to hardship applications, for a finding that
the level of fair rent increase is not sufficient to enable the owner to
maintain approximately the same average annual net income (which shall
be computed without regard to debt service, financing costs or manage-
ment fees) for the three year period ending on or within six months of
the date of an application pursuant to such criteria as compared with
annual net income, which prevailed on the average over the period nine-
teen hundred sixty-eight through nineteen hundred seventy, or for the
first three years of operation if the building was completed since nine-
teen hundred sixty-eight or for the first three fiscal years after a
transfer of title to a new owner provided the new owner can establish to
the satisfaction of the commissioner that he or she acquired title to
the building as a result of a bona fide sale of the entire building and
that the new owner is unable to obtain requisite records for the fiscal
years nineteen hundred sixty-eight through nineteen hundred seventy
despite diligent efforts to obtain same from predecessors in title and
further provided that the new owner can provide financial data covering
a minimum of six years under his or her continuous and uninterrupted
operation of the building to meet the three year to three year compar-
ative test periods herein provided; and (b) as to completed building-
wide major capital improvements, for a finding that such improvements
are deemed depreciable under the Internal Revenue Code and that the cost
is to be amortized over a seven-year period, based upon cash purchase
price exclusive of interest or service charges. THE COLLECTION OF ANY
RENT ADJUSTMENT TO THE LEGAL REGULATED RENT FOR A MAJOR CAPITAL IMPROVE-
MENT FOR ANY HOUSING ACCOMMODATION 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 COLLECTIBILITY OF ANY
DOLLAR EXCESS ABOVE SAID SUM TO BE SPREAD FORWARD IN SIMILAR INCREMENTS
AND ADDED TO THE MAXIMUM RENT AS ESTABLISHED OR SET IN FUTURE YEARS. IN
NO EVENT SHALL MORE THAN ONE SIX PERCENT INCREASE IN THE MAXIMUM RENT BE
COLLECTED IN THE SAME YEAR. A RENT ADJUSTMENT FOR A MAJOR CAPITAL
IMPROVEMENT MAY ONLY BE GRANTED IF THE OWNER OR AGENT OF THE SUBJECT
BUILDING FIRST APPLIES FOR AND RECEIVES BENEFITS PURSUANT TO SECTION
11-243 OF THIS CODE FOR THE BUILDING FOR WHICH THEY ARE SEEKING A MAJOR
CAPITAL IMPROVEMENT, PROVIDED, HOWEVER, AN OWNER OR AGENT OF THE SUBJECT
BUILDING THAT IS DENIED BENEFITS PURSUANT TO SECTION 11-243 OF THIS CODE
FOR REASONS UNRELATED TO AN UNTIMELY OR IMPROPERLY COMPLETED APPLICATION
SHALL STILL BE ELIGIBLE TO RECEIVE A RENT ADJUSTMENT FOR A MAJOR CAPITAL
IMPROVEMENT. Notwithstanding anything to the contrary contained herein,
no hardship increase granted pursuant to this paragraph shall, when
added to the annual gross rents, as determined by the commissioner,
exceed the sum of, (i) the annual operating expenses, (ii) an allowance
for management services as determined by the commissioner, (iii) actual
annual mortgage debt service (interest and amortization) on its indebt-
edness to a lending institution, an insurance company, a retirement fund
or welfare fund which is operated under the supervision of the banking
or insurance laws of the state of New York or the United States, and
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(iv) eight and one-half percent of that portion of the fair market value
of the property which exceeds the unpaid principal amount of the mort-
gage indebtedness referred to in subparagraph (iii) of this paragraph.
Fair market value for the purposes of this paragraph shall be six times
the annual gross rent. The collection of any increase in the stabilized
rent for any apartment 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 stabilized rent as established or
set in future years;
S 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
576 of the laws of 1974, constituting the emergency tenant protection
act of nineteen seventy-four, as amended by chapter 749 of the laws of
1990, is amended to read as follows:
(3) there has been since January first, nineteen hundred seventy-four
a major capital improvement required for the operation, preservation or
maintenance of the structure. An adjustment under this paragraph shall
be in an amount sufficient to amortize the cost of the improvements
pursuant to this paragraph over a seven-year period. THE COLLECTION OF
ANY RENT ADJUSTMENT TO THE LEGAL REGULATED RENT FOR A MAJOR CAPITAL
IMPROVEMENT FOR ANY HOUSING ACCOMMODATION 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 COLLECTIBIL-
ITY OF ANY DOLLAR EXCESS ABOVE SAID SUM TO BE SPREAD FORWARD IN SIMILAR
INCREMENTS AND ADDED TO THE MAXIMUM RENT AS ESTABLISHED OR SET IN FUTURE
YEARS. IN NO EVENT SHALL MORE THAN ONE SIX PERCENT INCREASE IN THE MAXI-
MUM RENT BE COLLECTED IN THE SAME YEAR, or
S 4. The second undesignated paragraph of paragraph (a) of subdivision
4 of section 4 of chapter 274 of the laws of 1946, constituting the
emergency housing rent control law, as amended by section 25 of part B
of chapter 97 of the laws of 2011, is amended to read as follows:
No application for adjustment of maximum rent based upon a sales price
valuation shall be filed by the landlord under this subparagraph prior
to six months from the date of such sale of the property. In addition,
no adjustment ordered by the commission based upon such sales price
valuation shall be effective prior to one year from the date of such
sale. Where, however, the assessed valuation of the land exceeds four
times the assessed valuation of the buildings thereon, the commission
may determine a valuation of the property equal to five times the equal-
ized assessed valuation of the buildings, for the purposes of this
subparagraph. The commission may make a determination that the valu-
ation of the property is an amount different from such equalized
assessed valuation where there is a request for a reduction in such
assessed valuation currently pending; or where there has been a
reduction in the assessed valuation for the year next preceding the
effective date of the current assessed valuation in effect at the time
of the filing of the application. Net annual return shall be the amount
by which the earned income exceeds the operating expenses of the proper-
ty, excluding mortgage interest and amortization, and excluding allow-
ances for obsolescence and reserves, but including an allowance for
depreciation of two per centum of the value of the buildings exclusive
of the land, or the amount shown for depreciation of the buildings in
the latest required federal income tax return, whichever is lower;
provided, however, that (1) no allowance for depreciation of the build-
ings shall be included where the buildings have been fully depreciated
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for federal income tax purposes or on the books of the owner; or (2) the
landlord who owns no more than four rental units within the state has
not been fully compensated by increases in rental income sufficient to
offset unavoidable increases in property taxes, fuel, utilities, insur-
ance and repairs and maintenance, excluding mortgage interest and amor-
tization, and excluding allowances for depreciation, obsolescence and
reserves, which have occurred since the federal date determining the
maximum rent or the date the property was acquired by the present owner,
whichever is later; or (3) the landlord operates a hotel or rooming
house or owns a cooperative apartment and has not been fully compensated
by increases in rental income from the controlled housing accommodations
sufficient to offset unavoidable increases in property taxes and other
costs as are allocable to such controlled housing accommodations,
including costs of operation of such hotel or rooming house, but exclud-
ing mortgage interest and amortization, and excluding allowances for
depreciation, obsolescence and reserves, which have occurred since the
federal date determining the maximum rent or the date the landlord
commenced the operation of the property, whichever is later; or (4) the
landlord and tenant voluntarily enter into a valid written lease in good
faith with respect to any housing accommodation, which lease provides
for an increase in the maximum rent not in excess of fifteen per centum
and for a term of not less than two years, except that where such lease
provides for an increase in excess of fifteen per centum, the increase
shall be automatically reduced to fifteen per centum; or (5) the land-
lord and tenant by mutual voluntary written agreement agree to a
substantial increase or decrease in dwelling space or a change in the
services, furniture, furnishings or equipment provided in the housing
accommodations; provided that an owner shall be entitled to a rent
increase where there has been a substantial modification or increase of
dwelling space or an increase in the services, or installation of new
equipment or improvements or new furniture or furnishings provided in or
to a tenant's housing accommodation. The permanent increase in the maxi-
mum rent for the affected housing accommodation shall be one-fortieth,
in the case of a building with thirty-five or fewer housing accommo-
dations, or one-sixtieth, in the case of a building with more than thir-
ty-five housing accommodations where such permanent increase takes
effect on or after September twenty-fourth, two thousand eleven, of the
total cost incurred by the landlord in providing such modification or
increase in dwelling space, services, furniture, furnishings or equip-
ment, including the cost of installation, but excluding finance charges
provided further that an owner who is entitled to a rent increase pursu-
ant to this clause shall not be entitled to a further rent increase
based upon the installation of similar equipment, or new furniture or
furnishings within the useful life of such new equipment, or new furni-
ture or furnishings. The owner shall give written notice to the commis-
sion of any such adjustment pursuant to this clause; or (6) there has
been, since March first, nineteen hundred fifty, an increase in the
rental value of the housing accommodations as a result of a substantial
rehabilitation of the building or housing accommodation therein which
materially adds to the value of the property or appreciably prolongs its
life, excluding ordinary repairs, maintenance and replacements; or (7)
there has been since March first, nineteen hundred fifty, a major capi-
tal improvement required for the operation, preservation or maintenance
of the structure. THE COLLECTION OF ANY RENT ADJUSTMENT TO THE LEGAL
REGULATED RENT FOR A MAJOR CAPITAL IMPROVEMENT FOR ANY HOUSING ACCOMMO-
DATION SHALL NOT EXCEED SIX PERCENT IN ANY YEAR FROM THE EFFECTIVE DATE
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OF THE ORDER GRANTING THE INCREASE OVER THE RENT SET FORTH IN THE SCHED-
ULE OF GROSS RENTS WITH COLLECTIBILITY OF ANY DOLLAR EXCESS ABOVE SAID
SUM TO BE SPREAD FORWARD IN SIMILAR INCREMENTS AND ADDED TO THE MAXIMUM
RENT AS ESTABLISHED OR SET IN FUTURE YEARS. IN NO EVENT SHALL MORE THAN
ONE SIX PERCENT INCREASE IN THE MAXIMUM RENT BE COLLECTED IN THE SAME
YEAR; or (8) there has been since March first, nineteen hundred fifty,
in structures containing more than four housing accommodations, other
improvements made with the express consent of the tenants in occupancy
of at least seventy-five per centum of the housing accommodations,
provided, however, that no adjustment granted hereunder shall exceed
fifteen per centum unless the tenants have agreed to a higher percentage
of increase, as herein provided; or (9) there has been, since March
first, nineteen hundred fifty, a subletting without written consent from
the landlord or an increase in the number of adult occupants who are not
members of the immediate family of the tenant, and the landlord has not
been compensated therefor by adjustment of the maximum rent by lease or
order of the commission or pursuant to the federal act; or (10) the
presence of unique or peculiar circumstances materially affecting the
maximum rent has resulted in a maximum rent which is substantially lower
than the rents generally prevailing in the same area for substantially
similar housing accommodations.
S 5. Subdivision dd of section 11-243 of the administrative code of
the city of New York, as added by local law number 41 of the city of New
York for the year 1988, is amended to read as follows:
dd. [Partial waiver] WAIVER of rent adjustments attributable to major
capital improvements. (1) The provisions of this subdivision apply to
and are additional requirements for claiming or receiving any tax abate-
ment under this section, except as provided in paragraphs three and four
of this subdivision.
(2) The owner of the property shall file with the department of hous-
ing preservation and development, on the date any application for bene-
fits is made, a declaration stating that in consideration of any tax
abatement benefits which may be received pursuant to such application
for alterations or improvements constituting a major capital improve-
ment, such owner agrees to waive the collection of a [portion of the
total annual amount of any] rent adjustment attributable to such major
capital improvement which may be granted by the New York state division
of housing and community renewal pursuant to the rent stabilization code
equal to [one-half of] the total annual amount of the tax abatement
benefits which the property receives pursuant to such application with
respect to such alterations or improvements. Such waiver shall commence
on the date of the first collection of such rent adjustment[, provided
that, in the event that such tax abatement benefits were received prior
to such first collection, the amount waived shall be increased to
account for such tax abatement benefits so received]. Following the
expiration of a tax abatement for alterations or improvements constitut-
ing a major capital improvement for which a rent adjustment has been
granted by such division, the owner may collect the full amount of annu-
al rent permitted pursuant to such rent adjustment. A copy of such
declaration shall be filed simultaneously with the New York state divi-
sion of housing and community renewal. Such declaration shall be binding
upon such owner, and his or her successors and assigns.
(3) The provisions of this subdivision shall not apply to substantial
rehabilitation of buildings vacant when alterations or improvements are
commenced or to buildings rehabilitated with the substantial assistance
of city, state or federal subsidies.
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(4) The provisions of this subdivision shall apply only to alterations
and improvements commenced after its effective date.
S 6. The opening paragraph of paragraph (a) of subdivision 1 of
section 489 of the real property tax law, as amended by chapter 244 of
the laws of 2006, is amended to read as follows:
Any city to which the multiple dwelling law is applicable, acting
through its local legislative body or other governing agency, is hereby
authorized and empowered, to and including June first, two thousand
[eleven] FIFTEEN, to adopt and amend local laws or ordinances providing
that any increase in assessed valuation of real property shall be exempt
from taxation for local purposes, as provided herein, to the extent such
increase results from:
S 7. The closing paragraph of subparagraph 6 of paragraph (a) of
subdivision 1 of section 489 of the real property tax law, as amended by
chapter 244 of the laws of 2006, is amended to read as follows:
Such conversion, alterations or improvements shall be completed within
thirty-six months after the date on which same shall be started except
that such thirty-six month limitation shall not apply to conversions of
residential units which are registered with the loft board in accordance
with article seven-C of the multiple dwelling law pursuant to subpara-
graph one of this paragraph. Notwithstanding the foregoing, a sixty
month period for completion shall be available for alterations or
improvements undertaken by a housing development fund company organized
pursuant to article eleven of the private housing finance law, which are
carried out with the substantial assistance of grants, loans or subsi-
dies from any federal, state or local governmental agency or instrumen-
tality or which are carried out in a property transferred from such city
if alterations and improvements are completed within seven years after
the date of transfer. In addition, the local housing agency is hereby
empowered to grant an extension of the period of completion for any
project carried out with the substantial assistance of grants, loans or
subsidies from any federal, state or local governmental agency or
instrumentality, if such alterations or improvements are completed with-
in sixty months from commencement of construction. Provided, further,
that such conversion, alterations or improvements shall in any event be
completed prior to December thirty-first, two thousand [eleven] FIFTEEN.
Exemption for conversions, alterations or improvements pursuant to
subparagraph one, two, three or four of this paragraph shall continue
for a period not to exceed fourteen years and begin no sooner than the
first quarterly tax bill immediately following the completion of such
conversion, alterations or improvements. Exemption for alterations or
improvements pursuant to this subparagraph or subparagraph five of this
paragraph shall continue for a period not to exceed thirty-four years
and shall begin no sooner than the first quarterly tax bill immediately
following the completion of such alterations or improvements. Such
exemption shall be equal to the increase in the valuation which is
subject to exemption in full or proportionally under this subdivision
for ten or thirty years, whichever is applicable. After such period of
time, the amount of such exempted assessed valuation of such improve-
ments shall be reduced by twenty percent in each succeeding year until
the assessed value of the improvements are fully taxable. Provided,
however, exemption for any conversion, alterations or improvements which
are aided by a loan or grant under article eight, eight-A, eleven,
twelve, fifteen or twenty-two of the private housing finance law,
section six hundred ninety-six-a or section ninety-nine-h of the general
municipal law, or section three hundred twelve of the housing act of
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nineteen hundred sixty-four (42 U.S.C.A. 1452b), or the Cranston-Gonza-
lez national affordable housing act (42 U.S.C.A. 12701 et. seq.), or
started after July first, nineteen hundred eighty-three by a housing
development fund company organized pursuant to article eleven of the
private housing finance law which are carried out with the substantial
assistance of grants, loans or subsidies from any federal, state or
local governmental agency or instrumentality or which are carried out in
a property transferred from any city and where alterations and improve-
ments are completed within seven years after the date of transfer may
commence at the beginning of any tax quarter subsequent to the start of
such conversion, alterations or improvements and prior to the completion
of such conversion, alterations or improvements.
S 8. Section 489 of the real property tax law is amended by adding
four new subdivisions 17, 18, 19 and 20 to read as follows:
17. (A) FOR PURPOSES OF THIS SUBDIVISION, "SUBSTANTIAL GOVERNMENTAL
ASSISTANCE" SHALL MEAN:
(1) GRANTS, LOANS OR SUBSIDIES FROM ANY FEDERAL, STATE OR LOCAL AGENCY
OR INSTRUMENTALITY IN FURTHERANCE OF A PROGRAM FOR THE DEVELOPMENT OF
AFFORDABLE HOUSING APPROVED BY THE LOCAL HOUSING AGENCY, INCLUDING,
WITHOUT LIMITATION, FINANCING OR INSURANCE PROVIDED BY THE STATE OF NEW
YORK MORTGAGE AGENCY OF THE NEW YORK CITY RESIDENTIAL MORTGAGE INSURANCE
CORPORATION; OR
(2) A WRITTEN AGREEMENT BETWEEN A HOUSING DEVELOPMENT FUND CORPORATION
AND THE LOCAL HOUSING AGENCY LIMITING THE INCOMES OF PERSONS ENTITLED TO
PURCHASE SHARES OR RENT HOUSING ACCOMMODATIONS THEREIN.
(B) ANY LOCAL LAW OR ORDINANCE PROVIDING FOR BENEFITS PURSUANT TO THIS
SECTION MUST ALSO PROVIDE THAT NO BENEFITS PURSUANT TO THIS SECTION
SHALL BE GRANTED FOR THE CONVERSION OF ANY NON-RESIDENTIAL BUILDING OR
STRUCTURE INTO A CLASS A MULTIPLE DWELLING, COMPLETED ON OR AFTER DECEM-
BER THIRTY-FIRST, TWO THOUSAND ELEVEN, UNLESS SUCH CONVERSION WAS
CARRIED OUT WITH SUBSTANTIAL GOVERNMENTAL ASSISTANCE.
18. ANY LOCAL LAW OR ORDINANCE PROVIDING FOR BENEFITS PURSUANT TO THIS
SECTION MUST ALSO PROVIDE, WITH RESPECT TO CONVERSIONS, ALTERATIONS OR
IMPROVEMENTS FOR WHICH APPLICATION WAS MADE AFTER THE EFFECTIVE DATE OF
THIS SUBDIVISION, THAT IF SUCH CONVERSIONS, ALTERATIONS OR IMPROVEMENTS
ARE NOT COMPLETED ON THE DATE UPON WHICH SUCH LOCAL HOUSING AGENCY
INSPECTS THE ITEMS OF WORK CLAIMED IN SUCH APPLICATION, THE LOCAL HOUS-
ING AGENCY SHALL REQUIRE THE APPLICANT TO PAY THE ACTUAL COST FOR ANY
ADDITIONAL INSPECTIONS NEEDED TO VERIFY THE COMPLETION OF SUCH CONVER-
SION, ALTERATION OR IMPROVEMENT.
19. THE REVOCATION OF BENEFITS GRANTED TO ANY MULTIPLE DWELLING,
BUILDING OR STRUCTURE PURSUANT TO THIS SECTION SHALL NOT EXEMPT ANY
DWELLING UNIT THEREIN FROM CONTINUED COMPLIANCE WITH THE REQUIREMENTS OF
THIS SECTION OR OF ANY LOCAL LAW OR ORDINANCE PROVIDING FOR BENEFITS
PURSUANT TO THIS SECTION.
20. NOTWITHSTANDING THE PROVISIONS OF ANY GENERAL, SPECIAL OR LOCAL
LAW OR ANY LOCAL ORDINANCE PROVIDING FOR BENEFITS PURSUANT TO THIS
SECTION MAY REQUIRE THAT THE APPLICATIONS FOR EXEMPTION OR ABATEMENT
UNDER THIS SECTION THAT ARE FILED ON OR AFTER A DATE SPECIFIED IN SUCH
LOCAL LAW OR ORDINANCE BE FILED ELECTRONICALLY.
S 9. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or subpart of this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph, subdivision, section
or subpart thereof directly involved in the controversy in which such
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judgment shall have been rendered. It is hereby declared to be the
intent of the legislature that this act would have been enacted even if
such invalid provisions had not been included herein.
S 10. This act shall take effect immediately, provided, however that
section 26-405 of the city rent and rehabilitation law made by section
one of this act shall remain in full force and effect only so long as
the public emergency requiring the regulation and control of residential
rents and evictions continues, as provided in subdivision 3 of section 1
of the local emergency housing rent control act; and provided further
that the amendments to section 26-511 of chapter 4 of title 26 of the
administrative code of the city of New York made by section two 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; and provided further that the amendment to section 6 of the
emergency tenant protection act of nineteen seventy-four made by section
three of this act shall expire on the same date as such act expires and
shall not affect the expiration of such act as provided in section 17 of
chapter 576 of the laws of 1974; and provided further that the amendment
to section 4 of the emergency housing rent control law made by section
four of this act shall expire on the same date as such law expires and
shall not affect the expiration of such law as provided in subdivision 2
of section 1 of chapter 274 of the laws of 1946; and provided further
that the provisions of sections one and two of this act shall only apply
to those buildings that commence work on a major capital improvement
fifteen days or later than the effective date of this act; provided
further, that sections six, seven and eight of this act shall be deemed
to have been in full force and effect on and after December 31, 2011;
provided that the amendments made to section 489 of the real property
tax law by section eight of this act shall not be deemed to change the
eligibility for benefits, pursuant to such section and any local law or
ordinance providing for benefits pursuant to such section, as a result
of conversions, alterations or improvements completed before December
31, 2011.