S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1966

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            January 12, 2011
                               ___________

Introduced  by M. of A. JEFFRIES, WRIGHT, GLICK -- Multi-Sponsored by --
  M. of A. FARRELL, 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.
                                                           LBD04662-01-1
              

A. 1966                             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.