senate Bill S3173A

2013-2014 Legislative Session

Sets criteria for approval of rent increases resulting from major capital improvements in certain dwellings

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to housing, construction and community development
May 30, 2013 print number 3173a
amend and recommit to housing, construction and community development
Jan 31, 2013 referred to housing, construction and community development

Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S3173 - Bill Details

See Assembly Version of this Bill:
A2061A
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
New York City Administrative Code
Laws Affected:
Amd §§26-405 & 26-511, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974
Versions Introduced in Previous Legislative Sessions:
2011-2012: S436A, A6132A
2009-2010: S5220, A6814

S3173 - Bill Texts

view summary

Establishes criteria for approval of rent increases to rent regulated property resulting from major capital improvements to insure that the work performed is an enhancement or upgrade to a housing accommodation or service therein and is not merely repair or replacement to existing services; prohibits approval of a major capital improvement rent increase where any outstanding hazardous violations exist.

view sponsor memo
BILL NUMBER:S3173

TITLE OF BILL: An act to amend the administrative code of the city of
New York and the emergency tenant protection act of nineteen seventy-
four, in relation to approval of major capital improvement rent
increases

SUMMARY OF PROVISIONS: This legislation establishes criteria for
approval of rent increases to rent regulated property resulting from
major capital improvements. The criteria will be used to insure that
the work performed is an enhancement or upgrade to a housing accommo-
dation or service and is not merely a repair or replacement of existing
services. It also prohibits approval of major capital improvement rent
increases when any outstanding hazardous violations exist.

PURPOSE: This bill prevents landlords from receiving a financial wind-
fall from major capital improvements funded by the New York State Energy
and Development Authority (NYSERDA).

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 - Amends paragraph 3 of subdivision d of section 6 of section
4 of chapter 576 of the laws of 1974 to exclude NYSERDA funded projects.

Section 2 - Amends subparagraph g of paragraph 1 of subdivision g of
section 26-405 of the administrative code of the city of New York to
exclude NYSERDA funded projects.

Section 3 - Amends subparagraph k of paragraph 1 of subdivision g of
section 26-405 of the administrative code of the city of New York to
exclude NYSERDA funded projects.

Section 4 - Effective date.

JUSTIFICATION: Landlords currently utilize major capital improvement
surcharges as a back door way to raise their tenant's rents. Although
some MCI surcharges are legitimate, many landlords apply for and are
granted the MCI surcharge for work that is not an improvement, but
routine maintenance. This is not the intent of the MCI program. The
problem stems from the fact that there are no statutory guidelines to
direct the division of Housing and Community Renewal as to what will
have no fiscal implications for the State.

The NYSERDA Multi-family Performance Program offers landlords incentives
to invest in energy-efficient building upgrades, including implementing
environmentally friendly measures to address specific energy and opera-
tional needs of buildings. In many cases landlords have filed applica-
tions with the Division of Housing and Community Renewal for Major Capi-
tal Improvement rent increases for capital work that is part of their
jurisdiction for receiving NYSERDA funds. This practice of double-dip-
ping, by taking advantage of two different incentives for the same work,

violates the intent of the incentive provisions and, if permitted,
results in a windfall to landlords. This bill would clarify that such
double-dipping is not permitted.

FISCAL IMPACT ON THE STATE: None.

EFFECTIVE DATE: This act shall take effect immediately, provided that:

(a) the amendments to section 26-405 of the city rent and rehabilitation
law made by sections one, five and six 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;

(b) the amendment to section 26-511 of the rent stabilization law of
nineteen hundred sixty-nine 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, as from time
to time amended; and

(c) the amendments to section 6 of the emergency tenant protection act
of nineteen seventy-four made by sections three and four 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, as from time to time amended.

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

                                  3173

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 31, 2013
                               ___________

Introduced  by Sens. KRUEGER, PERALTA -- read twice and ordered printed,
  and when  printed  to  be  committed  to  the  Committee  on  Housing,
  Construction and Community Development

AN  ACT to amend the administrative code of the city of New York and the
  emergency tenant protection act of nineteen seventy-four, in  relation
  to approval of major capital improvement rent increases

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 26-405 of the administrative code of  the  city  of
New York is amended by adding a new subdivision n to read as follows:
  N.  (1) NO MAJOR CAPITAL IMPROVEMENT RENT INCREASE WILL BE APPROVED BY
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE WORK  PERFORMED
IS AN ENHANCEMENT OR UPGRADE TO A HOUSING ACCOMMODATION OR SERVICE THER-
EIN;  OR  IS  AN  ADDITION  TO  SUCH HOUSING ACCOMMODATION AND OTHERWISE
ELIGIBLE ACCORDING TO THE PREREQUISITES FOR  MAJOR  CAPITAL  IMPROVEMENT
RENT  INCREASES.    ANY  REPAIR  OR  REPLACEMENT INTENDED TO MAINTAIN AN
EXISTING SERVICE SHALL NOT BE ELIGIBLE FOR A MAJOR  CAPITAL  IMPROVEMENT
RENT INCREASE.
  (2)  NO  APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE MAY
BE APPROVED IF THERE EXIST ANY OUTSTANDING HAZARDOUS VIOLATIONS  AT  THE
TIME OF THE CONSIDERATION OF SUCH APPLICATION, AS DETERMINED PURSUANT TO
REGULATIONS  OF  THE  DIVISION  OF  HOUSING AND COMMUNITY RENEWAL OR ANY
AGENCY ADMINISTERING AND ENFORCING A BUILDING CODE IN  THE  JURISDICTION
IN  WHICH  THE PROPERTY IS LOCATED, UNLESS IT IS DETERMINED BY THE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL THAT SUCH WORK IS ESSENTIAL TO THE
ALLEVIATION OF THE VIOLATIONS AND SUCH APPROVAL IS CONSISTENT  WITH  THE
PROVISIONS  OF  THIS  SECTION.  EXCEPT  IN THE CASE OF EMERGENCY OR GOOD
CAUSE, THE OWNER OF THE PROPERTY SHALL FILE, NOT LESS THAN  THIRTY  DAYS
BEFORE THE COMMENCEMENT OF THE IMPROVEMENT, WITH THE DIVISION OF HOUSING
AND  COMMUNITY  RENEWAL A STATEMENT CONTAINING INFORMATION OUTLINING THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00872-01-3

S. 3173                             2

SCOPE OF WORK, EXPECTED DATE OF COMPLETION FOR SUCH WORK AND AN  AFFIDA-
VIT SETTING FORTH THE FOLLOWING INFORMATION:
  (A)  EVERY  OWNER OF RECORD AND OWNER OF A SUBSTANTIAL INTEREST IN THE
PROPERTY OR ENTITY OWNING THE PROPERTY OR  SPONSORING  THE  IMPROVEMENT;
AND
  (B)  A  STATEMENT THAT NONE OF SUCH PERSONS HAD, WITHIN THE FIVE YEARS
PRIOR TO THE IMPROVEMENT, BEEN FOUND  TO  HAVE  HARASSED  OR  UNLAWFULLY
EVICTED  TENANTS BY JUDGMENT OR DETERMINATION OF A COURT OR AGENCY UNDER
THE PENAL LAW, ANY STATE OR LOCAL LAW REGULATING RENTS OR ANY  STATE  OR
LOCAL LAW RELATING TO HARASSMENT OF TENANTS OR UNLAWFUL EVICTION.
  UPON  RECEIPT  OF THE SCOPE OF WORK AND AFFIDAVIT PROVIDED FOR HEREIN,
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE  TENANTS
IN  OCCUPANCY  IN SUCH BUILDINGS WITH SUCH INFORMATION.  THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL, IN ADDITION,  IMPLEMENT  PROCEDURES
INCLUDING,  BUT  NOT  LIMITED TO, ELICITING TENANT COMMENTS TO DETERMINE
WHETHER MAJOR CAPITAL IMPROVEMENT REHABILITATION WORK HAS BEEN SATISFAC-
TORILY COMPLETED. NO  MAJOR  CAPITAL  IMPROVEMENT  RENT  INCREASE  SHALL
BECOME  EFFECTIVE  UNTIL  ANY DEFECTIVE OR DEFICIENT REHABILITATION WORK
HAS BEEN CURED.
  S 2. Subdivision c of section 26-511 of the administrative code of the
city of New York is amended by adding a new paragraph  6-b  to  read  as
follows:
  (6-B) PROVIDES CRITERIA WHEREBY THE COMMISSIONER MAY ACT UPON APPLICA-
TION  BY  OWNERS  FOR  INCREASES  IN  EXCESS  OF  THE LEVEL OF FAIR RENT
INCREASE ESTABLISHED UNDER THIS LAW PROVIDED HOWEVER, THAT SUCH CRITERIA
SHALL PROVIDE THAT:
  (1) NO MAJOR CAPITAL IMPROVEMENT RENT INCREASE WILL BE APPROVED BY THE
DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE WORK  PERFORMED  IS
AN ENHANCEMENT OR UPGRADE TO A HOUSING ACCOMMODATION OR SERVICE THEREIN;
OR  IS  AN ADDITION TO SUCH HOUSING ACCOMMODATION AND OTHERWISE ELIGIBLE
ACCORDING TO  THE  PREREQUISITES  FOR  MAJOR  CAPITAL  IMPROVEMENT  RENT
INCREASES.    ANY REPAIR OR REPLACEMENT INTENDED TO MAINTAIN AN EXISTING
SERVICE SHALL NOT BE ELIGIBLE  FOR  A  MAJOR  CAPITAL  IMPROVEMENT  RENT
INCREASE.
  (2)  NO  APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE MAY
BE APPROVED IF THERE EXIST ANY OUTSTANDING HAZARDOUS VIOLATIONS  AT  THE
TIME OF THE CONSIDERATION OF SUCH APPLICATION, AS DETERMINED PURSUANT TO
REGULATIONS  OF  THE  DIVISION  OF  HOUSING AND COMMUNITY RENEWAL OR ANY
AGENCY ADMINISTERING AND ENFORCING A BUILDING CODE IN  THE  JURISDICTION
IN  WHICH  THE PROPERTY IS LOCATED, UNLESS IT IS DETERMINED BY THE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL THAT SUCH WORK IS ESSENTIAL TO THE
ALLEVIATION OF THE VIOLATIONS AND SUCH APPROVAL IS CONSISTENT  WITH  THE
PROVISIONS  OF  THIS  SECTION.  EXCEPT  IN THE CASE OF EMERGENCY OR GOOD
CAUSE, THE OWNER OF THE PROPERTY SHALL FILE, NOT LESS THAN  THIRTY  DAYS
BEFORE THE COMMENCEMENT OF THE IMPROVEMENT, WITH THE DIVISION OF HOUSING
AND  COMMUNITY  RENEWAL A STATEMENT CONTAINING INFORMATION OUTLINING THE
SCOPE OF WORK, EXPECTED DATE OF COMPLETION FOR SUCH WORK AND AN  AFFIDA-
VIT SETTING FORTH THE FOLLOWING INFORMATION:
  (A)  EVERY  OWNER OF RECORD AND OWNER OF A SUBSTANTIAL INTEREST IN THE
PROPERTY OR ENTITY OWNING THE PROPERTY OR  SPONSORING  THE  IMPROVEMENT;
AND
  (B)  A  STATEMENT THAT NONE OF SUCH PERSONS HAD, WITHIN THE FIVE YEARS
PRIOR TO THE IMPROVEMENT, BEEN FOUND  TO  HAVE  HARASSED  OR  UNLAWFULLY
EVICTED  TENANTS BY JUDGMENT OR DETERMINATION OF A COURT OR AGENCY UNDER
THE PENAL LAW, ANY STATE OR LOCAL LAW REGULATING RENTS OR ANY  STATE  OR
LOCAL LAW RELATING TO HARASSMENT OF TENANTS OR UNLAWFUL EVICTION.

S. 3173                             3

  UPON  RECEIPT  OF THE SCOPE OF WORK AND AFFIDAVIT PROVIDED FOR HEREIN,
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE  TENANTS
IN  OCCUPANCY  IN SUCH BUILDINGS WITH SUCH INFORMATION.  THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL, IN ADDITION,  IMPLEMENT  PROCEDURES
INCLUDING,  BUT  NOT  LIMITED TO, ELICITING TENANT COMMENTS TO DETERMINE
WHETHER MAJOR CAPITAL IMPROVEMENT REHABILITATION WORK HAS BEEN SATISFAC-
TORILY COMPLETED. NO  MAJOR  CAPITAL  IMPROVEMENT  RENT  INCREASE  SHALL
BECOME  EFFECTIVE  UNTIL  ANY DEFECTIVE OR DEFICIENT REHABILITATION WORK
HAS BEEN CURED.
  S 3. Section 6 of section 4 of  chapter  576  of  the  laws  of  1974,
constituting  the  emergency  tenant protection act of nineteen seventy-
four, is amended by adding a new subdivision d-1 to read as follows:
  D-1. (1) NO MAJOR CAPITAL IMPROVEMENT RENT INCREASE WILL  BE  APPROVED
BY  THE  DIVISION  OF  HOUSING  AND  COMMUNITY  RENEWAL  UNLESS THE WORK
PERFORMED IS AN ENHANCEMENT OR UPGRADE TO  A  HOUSING  ACCOMMODATION  OR
SERVICE  THEREIN;  OR  IS  AN ADDITION TO SUCH HOUSING ACCOMMODATION AND
OTHERWISE ELIGIBLE ACCORDING TO  THE  PREREQUISITES  FOR  MAJOR  CAPITAL
IMPROVEMENT RENT INCREASES.  ANY REPAIR OR REPLACEMENT INTENDED TO MAIN-
TAIN  AN  EXISTING  SERVICE  SHALL  NOT  BE ELIGIBLE FOR A MAJOR CAPITAL
IMPROVEMENT RENT INCREASE.
  (2) NO APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT  INCREASE  MAY
BE  APPROVED  IF THERE EXIST ANY OUTSTANDING HAZARDOUS VIOLATIONS AT THE
TIME OF THE CONSIDERATION OF SUCH APPLICATION, AS DETERMINED PURSUANT TO
REGULATIONS OF THE DIVISION OF HOUSING  AND  COMMUNITY  RENEWAL  OR  ANY
AGENCY  ADMINISTERING  AND ENFORCING A BUILDING CODE IN THE JURISDICTION
IN WHICH THE PROPERTY IS LOCATED, UNLESS IT IS DETERMINED BY  THE  DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL THAT SUCH WORK IS ESSENTIAL TO THE
ALLEVIATION  OF  THE VIOLATIONS AND SUCH APPROVAL IS CONSISTENT WITH THE
PROVISIONS OF THIS SECTION. EXCEPT IN THE  CASE  OF  EMERGENCY  OR  GOOD
CAUSE,  THE  OWNER OF THE PROPERTY SHALL FILE, NOT LESS THAN THIRTY DAYS
BEFORE THE COMMENCEMENT OF THE IMPROVEMENT, WITH THE DIVISION OF HOUSING
AND COMMUNITY RENEWAL A STATEMENT CONTAINING INFORMATION  OUTLINING  THE
SCOPE  OF WORK, EXPECTED DATE OF COMPLETION FOR SUCH WORK AND AN AFFIDA-
VIT SETTING FORTH THE FOLLOWING INFORMATION:
  (A) EVERY OWNER OF RECORD AND OWNER OF A SUBSTANTIAL INTEREST  IN  THE
PROPERTY  OR  ENTITY  OWNING THE PROPERTY OR SPONSORING THE IMPROVEMENT;
AND
  (B) A STATEMENT THAT NONE OF SUCH PERSONS HAD, WITHIN THE  FIVE  YEARS
PRIOR  TO  THE  IMPROVEMENT,  BEEN  FOUND TO HAVE HARASSED OR UNLAWFULLY
EVICTED TENANTS BY JUDGMENT OR DETERMINATION OF A COURT OR AGENCY  UNDER
THE  PENAL  LAW, ANY STATE OR LOCAL LAW REGULATING RENTS OR ANY STATE OR
LOCAL LAW RELATING TO HARASSMENT OF TENANTS OR UNLAWFUL EVICTION.
  UPON RECEIPT OF THE SCOPE OF WORK AND AFFIDAVIT PROVIDED  FOR  HEREIN,
THE  DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE TENANTS
IN OCCUPANCY IN SUCH BUILDINGS WITH SUCH INFORMATION.   THE DIVISION  OF
HOUSING  AND  COMMUNITY RENEWAL SHALL, IN ADDITION, IMPLEMENT PROCEDURES
INCLUDING, BUT NOT LIMITED TO, ELICITING TENANT  COMMENTS  TO  DETERMINE
WHETHER MAJOR CAPITAL IMPROVEMENT REHABILITATION WORK HAS BEEN SATISFAC-
TORILY  COMPLETED.  NO  MAJOR  CAPITAL  IMPROVEMENT  RENT INCREASE SHALL
BECOME EFFECTIVE UNTIL ANY DEFECTIVE OR  DEFICIENT  REHABILITATION  WORK
HAS BEEN CURED.
  S 4. 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:

S. 3173                             4

  (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; PROVIDED THAT THE MAJOR CAPITAL IMPROVE-
MENT WAS NOT FUNDED IN ANY PART FROM MONEYS PROVIDED  BY  THE  NEW  YORK
STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY OR ANY SUCCESSOR AGENCY.
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, or
  S  5.  Subparagraph  (g)  of  paragraph  1 of subdivision g of section
26-405 of the administrative code of the city of New York, as amended by
chapter 749 of the laws of 1990, is amended to read as follows:
  (g) There has been since July first, nineteen hundred seventy, a major
capital improvement required for the operation, preservation or  mainte-
nance  of the structure; PROVIDED THAT THE MAJOR CAPITAL IMPROVEMENT WAS
NOT FUNDED IN ANY PART FROM MONEYS PROVIDED BY THE NEW YORK STATE ENERGY
RESEARCH AND DEVELOPMENT AUTHORITY OR ANY SUCCESSOR AGENCY.  An  adjust-
ment  under  this  subparagraph  (g) shall be in an amount sufficient to
amortize the cost of the improvements pursuant to this subparagraph  (g)
over a seven-year period; or
  S  6.  Subparagraph  (k)  of  paragraph  1 of subdivision g of section
26-405 of the administrative code of the city of New York, as amended by
chapter 749 of the laws of 1990, is amended to read as follows:
  (k) The landlord has incurred, since January first,  nineteen  hundred
seventy,  in connection with and in addition to a concurrent major capi-
tal improvement pursuant to subparagraph (g) of  this  paragraph,  other
expenditures  to  improve, restore or preserve the quality of the struc-
ture; PROVIDED THAT SUCH OTHER EXPENDITURES WERE NOT FUNDED IN ANY  PART
FROM  MONEYS PROVIDED BY THE NEW YORK STATE ENERGY RESEARCH AND DEVELOP-
MENT AUTHORITY OR ANY  SUCCESSOR  AGENCY.    An  adjustment  under  this
subparagraph  shall  be  granted  only if such improvements represent an
expenditure equal to at least ten per centum of the total operating  and
maintenance  expenses  for  the preceding year. An adjustment under this
subparagraph shall be in addition to  any  adjustment  granted  for  the
concurrent  major  capital  improvement and shall be in an amount suffi-
cient to amortize the cost of the improvements pursuant to this subpara-
graph over a seven-year period.
  S 7. This act shall take effect immediately, provided that:
  (a) the amendments to section 26-405 of the city  rent  and  rehabili-
tation  law  made by sections one, five and six 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;
  (b)  the  amendment to section 26-511 of the rent stabilization law of
nineteen hundred sixty-nine 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, as  from  time
to time amended; and
  (c) the amendments to section 6 of the emergency tenant protection act
of  nineteen  seventy-four  made  by sections three and four 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, as from time to time amended.

Co-Sponsors

S3173A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A2061A
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
New York City Administrative Code
Laws Affected:
Amd §§26-405 & 26-511, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974
Versions Introduced in Previous Legislative Sessions:
2011-2012: S436A, A6132A
2009-2010: S5220, A6814

S3173A (ACTIVE) - Bill Texts

view summary

Establishes criteria for approval of rent increases to rent regulated property resulting from major capital improvements to insure that the work performed is an enhancement or upgrade to a housing accommodation or service therein and is not merely repair or replacement to existing services; prohibits approval of a major capital improvement rent increase where any outstanding hazardous violations exist.

view sponsor memo
BILL NUMBER:S3173A

TITLE OF BILL: An act to amend the administrative code of the city of
New York and the emergency tenant protection act of nineteen
seventy-four, in relation to approval of major capital improvement
rent increases

PURPOSE:

This bill would establish a regulatory framework for the approval of
rent increases to rent regulated property as a result of major capital
improvements and prevent landlords from receiving a financial windfall
from major capital improvements funded by the New York State Energy
and Development Authority (NYSERDA).

SUMMARY OF PROVISIONS:

Sections 1, 2, and 3 - Establish criteria for approval of rent
increases to rent regulated property resulting from major capital
improvements. The criteria will be used to ensure that the work
performed is an enhancement or upgrade to a housing accommodation or
service, and is not merely a repair or replacement of existing
services. It also prohibits approval of major capital improvement rent
increases when any outstanding hazardous violations exist.

Section 4 - Amends subdivision d of section 6 of section 4 of chapter
576 of the laws of 1974 by adding a new paragraph 6 to exclude NYSERDA
funded projects from receiving adjustments for major capital
improvements.

Section 3 - Amends paragraph 1 of subdivision g of section 26-405 of
the administrative code of the city of New York by adding a new
subparagraph m to exclude NYSERDA funded projects.

Section 6 - Effective date.

JUSTIFICATION:

Many landlords currently utilize major capital improvement surcharges
as an unscrupulous means to raise the rent of their units, unfairly
burdening their tenants. Although some MCI surcharges are legitimate,
many landlords apply for, and arc granted, the MCI surcharge for work
that is simply routine maintenance, and not an actual improvement.
This is not the intent of the MCI program. The lack of statutory
guidelines to direct the division of housing and Community Renewal as
to the criteria for approval of MCI surcharges is a major source of
the problem.

In addition to MCI surcharges approved by the Division of Housing and
Community Renewal, the NYSERDA Multi-family Performance Program offers
landlords incentives to invest in energy-efficient building upgrades,
including implementing environmentally friendly-measures to address
specific energy and operational needs of buildings. In many cases
landlords have filed applications with both the Division of Housing
and Community Renewal for MCI rent increases for capital work that is
part of their jurisdiction for receiving NYSERDA funds. This practice
of double-dipping, by taking advantage of two different incentives for


the same work, violates the intent of the incentive provisions and, if
permitted, results in a windfall to landlords. This bill would clarify
that such double-dipping is not permitted.

FISCAL IMPACT ON THE STATE:

None.

EFFECTIVE DATE:

This act shall take effect, immediately, provided that

(a) the amendment to section 26-405 or the city rent and
-rehabilitation law made by section one and five 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

(b) and provided further that the amendment to section 26-511 of the
rent stabilization law of nineteen hundred sixty-nine 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, as from time to time amended and provided further
that

(c) the amendment to section 6 of the emergency tenant protection 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, as from time to time amended.

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

                                 3173--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 31, 2013
                               ___________

Introduced  by Sens. KRUEGER, HASSELL-THOMPSON, HOYLMAN, PERALTA -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee  on  Housing,  Construction  and  Community  Development  --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN  ACT to amend the administrative code of the city of New York and the
  emergency tenant protection act of nineteen seventy-four, in  relation
  to approval of major capital improvement rent increases

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 26-405 of the administrative code of  the  city  of
New York is amended by adding a new subdivision n to read as follows:
  N.  (1) NO MAJOR CAPITAL IMPROVEMENT RENT INCREASE WILL BE APPROVED BY
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE WORK  PERFORMED
IS AN ENHANCEMENT OR UPGRADE TO A HOUSING ACCOMMODATION OR SERVICE THER-
EIN;  OR  IS  AN  ADDITION  TO  SUCH HOUSING ACCOMMODATION AND OTHERWISE
ELIGIBLE ACCORDING TO THE PREREQUISITES FOR  MAJOR  CAPITAL  IMPROVEMENT
RENT  INCREASES.    ANY  REPAIR  OR  REPLACEMENT INTENDED TO MAINTAIN AN
EXISTING SERVICE SHALL NOT BE ELIGIBLE FOR A MAJOR  CAPITAL  IMPROVEMENT
RENT INCREASE.
  (2)  NO  APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE MAY
BE APPROVED IF THERE EXIST ANY OUTSTANDING HAZARDOUS VIOLATIONS  AT  THE
TIME OF THE CONSIDERATION OF SUCH APPLICATION, AS DETERMINED PURSUANT TO
REGULATIONS  OF  THE  DIVISION  OF  HOUSING AND COMMUNITY RENEWAL OR ANY
AGENCY ADMINISTERING AND ENFORCING A BUILDING CODE IN  THE  JURISDICTION
IN  WHICH  THE PROPERTY IS LOCATED, UNLESS IT IS DETERMINED BY THE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL THAT SUCH WORK IS ESSENTIAL TO THE
ALLEVIATION OF THE VIOLATIONS AND SUCH APPROVAL IS CONSISTENT  WITH  THE
PROVISIONS  OF  THIS  SECTION.  EXCEPT  IN THE CASE OF EMERGENCY OR GOOD
CAUSE, THE OWNER OF THE PROPERTY SHALL FILE, NOT LESS THAN  THIRTY  DAYS
BEFORE THE COMMENCEMENT OF THE IMPROVEMENT, WITH THE DIVISION OF HOUSING

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00872-03-3

S. 3173--A                          2

AND  COMMUNITY  RENEWAL A STATEMENT CONTAINING INFORMATION OUTLINING THE
SCOPE OF WORK, EXPECTED DATE OF COMPLETION FOR SUCH WORK AND AN  AFFIDA-
VIT SETTING FORTH THE FOLLOWING INFORMATION:
  (A)  EVERY  OWNER OF RECORD AND OWNER OF A SUBSTANTIAL INTEREST IN THE
PROPERTY OR ENTITY OWNING THE PROPERTY OR  SPONSORING  THE  IMPROVEMENT;
AND
  (B)  A  STATEMENT THAT NONE OF SUCH PERSONS HAD, WITHIN THE FIVE YEARS
PRIOR TO THE IMPROVEMENT, BEEN FOUND  TO  HAVE  HARASSED  OR  UNLAWFULLY
EVICTED  TENANTS BY JUDGMENT OR DETERMINATION OF A COURT OR AGENCY UNDER
THE PENAL LAW, ANY STATE OR LOCAL LAW REGULATING RENTS OR ANY  STATE  OR
LOCAL LAW RELATING TO HARASSMENT OF TENANTS OR UNLAWFUL EVICTION.
  UPON  RECEIPT  OF THE SCOPE OF WORK AND AFFIDAVIT PROVIDED FOR HEREIN,
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE  TENANTS
IN  OCCUPANCY  IN SUCH BUILDINGS WITH SUCH INFORMATION.  THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL, IN ADDITION,  IMPLEMENT  PROCEDURES
INCLUDING,  BUT  NOT  LIMITED TO, ELICITING TENANT COMMENTS TO DETERMINE
WHETHER MAJOR CAPITAL IMPROVEMENT REHABILITATION WORK HAS BEEN SATISFAC-
TORILY COMPLETED. NO  MAJOR  CAPITAL  IMPROVEMENT  RENT  INCREASE  SHALL
BECOME  EFFECTIVE  UNTIL  ANY DEFECTIVE OR DEFICIENT REHABILITATION WORK
HAS BEEN CURED.
  S 2. Subdivision c of section 26-511 of the administrative code of the
city of New York is amended by adding a new paragraph  6-b  to  read  as
follows:
  (6-B) PROVIDES CRITERIA WHEREBY THE COMMISSIONER MAY ACT UPON APPLICA-
TION  BY  OWNERS  FOR  INCREASES  IN  EXCESS  OF  THE LEVEL OF FAIR RENT
INCREASE ESTABLISHED UNDER THIS LAW PROVIDED HOWEVER, THAT SUCH CRITERIA
SHALL PROVIDE THAT:
  (1) NO MAJOR CAPITAL IMPROVEMENT RENT INCREASE WILL BE APPROVED BY THE
DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE WORK  PERFORMED  IS
AN ENHANCEMENT OR UPGRADE TO A HOUSING ACCOMMODATION OR SERVICE THEREIN;
OR  IS  AN ADDITION TO SUCH HOUSING ACCOMMODATION AND OTHERWISE ELIGIBLE
ACCORDING TO  THE  PREREQUISITES  FOR  MAJOR  CAPITAL  IMPROVEMENT  RENT
INCREASES.    ANY REPAIR OR REPLACEMENT INTENDED TO MAINTAIN AN EXISTING
SERVICE SHALL NOT BE ELIGIBLE  FOR  A  MAJOR  CAPITAL  IMPROVEMENT  RENT
INCREASE.
  (2)  NO  APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE MAY
BE APPROVED IF THERE EXIST ANY OUTSTANDING HAZARDOUS VIOLATIONS  AT  THE
TIME OF THE CONSIDERATION OF SUCH APPLICATION, AS DETERMINED PURSUANT TO
REGULATIONS  OF  THE  DIVISION  OF  HOUSING AND COMMUNITY RENEWAL OR ANY
AGENCY ADMINISTERING AND ENFORCING A BUILDING CODE IN  THE  JURISDICTION
IN  WHICH  THE PROPERTY IS LOCATED, UNLESS IT IS DETERMINED BY THE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL THAT SUCH WORK IS ESSENTIAL TO THE
ALLEVIATION OF THE VIOLATIONS AND SUCH APPROVAL IS CONSISTENT  WITH  THE
PROVISIONS  OF  THIS  SECTION.  EXCEPT  IN THE CASE OF EMERGENCY OR GOOD
CAUSE, THE OWNER OF THE PROPERTY SHALL FILE, NOT LESS THAN  THIRTY  DAYS
BEFORE THE COMMENCEMENT OF THE IMPROVEMENT, WITH THE DIVISION OF HOUSING
AND  COMMUNITY  RENEWAL A STATEMENT CONTAINING INFORMATION OUTLINING THE
SCOPE OF WORK, EXPECTED DATE OF COMPLETION FOR SUCH WORK AND AN  AFFIDA-
VIT SETTING FORTH THE FOLLOWING INFORMATION:
  (A)  EVERY  OWNER OF RECORD AND OWNER OF A SUBSTANTIAL INTEREST IN THE
PROPERTY OR ENTITY OWNING THE PROPERTY OR  SPONSORING  THE  IMPROVEMENT;
AND
  (B)  A  STATEMENT THAT NONE OF SUCH PERSONS HAD, WITHIN THE FIVE YEARS
PRIOR TO THE IMPROVEMENT, BEEN FOUND  TO  HAVE  HARASSED  OR  UNLAWFULLY
EVICTED  TENANTS BY JUDGMENT OR DETERMINATION OF A COURT OR AGENCY UNDER

S. 3173--A                          3

THE PENAL LAW, ANY STATE OR LOCAL LAW REGULATING RENTS OR ANY  STATE  OR
LOCAL LAW RELATING TO HARASSMENT OF TENANTS OR UNLAWFUL EVICTION.
  UPON  RECEIPT  OF THE SCOPE OF WORK AND AFFIDAVIT PROVIDED FOR HEREIN,
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE  TENANTS
IN  OCCUPANCY  IN SUCH BUILDINGS WITH SUCH INFORMATION.  THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL SHALL, IN ADDITION,  IMPLEMENT  PROCEDURES
INCLUDING,  BUT  NOT  LIMITED TO, ELICITING TENANT COMMENTS TO DETERMINE
WHETHER MAJOR CAPITAL IMPROVEMENT REHABILITATION WORK HAS BEEN SATISFAC-
TORILY COMPLETED. NO  MAJOR  CAPITAL  IMPROVEMENT  RENT  INCREASE  SHALL
BECOME  EFFECTIVE  UNTIL  ANY DEFECTIVE OR DEFICIENT REHABILITATION WORK
HAS BEEN CURED.
  S 3. Section 6 of section 4 of  chapter  576  of  the  laws  of  1974,
constituting  the  emergency  tenant protection act of nineteen seventy-
four, is amended by adding a new subdivision d-1 to read as follows:
  D-1. (1) NO MAJOR CAPITAL IMPROVEMENT RENT INCREASE WILL  BE  APPROVED
BY  THE  DIVISION  OF  HOUSING  AND  COMMUNITY  RENEWAL  UNLESS THE WORK
PERFORMED IS AN ENHANCEMENT OR UPGRADE TO  A  HOUSING  ACCOMMODATION  OR
SERVICE  THEREIN;  OR  IS  AN ADDITION TO SUCH HOUSING ACCOMMODATION AND
OTHERWISE ELIGIBLE ACCORDING TO  THE  PREREQUISITES  FOR  MAJOR  CAPITAL
IMPROVEMENT RENT INCREASES.  ANY REPAIR OR REPLACEMENT INTENDED TO MAIN-
TAIN  AN  EXISTING  SERVICE  SHALL  NOT  BE ELIGIBLE FOR A MAJOR CAPITAL
IMPROVEMENT RENT INCREASE.
  (2) NO APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT  INCREASE  MAY
BE  APPROVED  IF THERE EXIST ANY OUTSTANDING HAZARDOUS VIOLATIONS AT THE
TIME OF THE CONSIDERATION OF SUCH APPLICATION, AS DETERMINED PURSUANT TO
REGULATIONS OF THE DIVISION OF HOUSING  AND  COMMUNITY  RENEWAL  OR  ANY
AGENCY  ADMINISTERING  AND ENFORCING A BUILDING CODE IN THE JURISDICTION
IN WHICH THE PROPERTY IS LOCATED, UNLESS IT IS DETERMINED BY  THE  DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL THAT SUCH WORK IS ESSENTIAL TO THE
ALLEVIATION  OF  THE VIOLATIONS AND SUCH APPROVAL IS CONSISTENT WITH THE
PROVISIONS OF THIS SECTION. EXCEPT IN THE  CASE  OF  EMERGENCY  OR  GOOD
CAUSE,  THE  OWNER OF THE PROPERTY SHALL FILE, NOT LESS THAN THIRTY DAYS
BEFORE THE COMMENCEMENT OF THE IMPROVEMENT, WITH THE DIVISION OF HOUSING
AND COMMUNITY RENEWAL A STATEMENT CONTAINING INFORMATION  OUTLINING  THE
SCOPE  OF WORK, EXPECTED DATE OF COMPLETION FOR SUCH WORK AND AN AFFIDA-
VIT SETTING FORTH THE FOLLOWING INFORMATION:
  (A) EVERY OWNER OF RECORD AND OWNER OF A SUBSTANTIAL INTEREST  IN  THE
PROPERTY  OR  ENTITY  OWNING THE PROPERTY OR SPONSORING THE IMPROVEMENT;
AND
  (B) A STATEMENT THAT NONE OF SUCH PERSONS HAD, WITHIN THE  FIVE  YEARS
PRIOR  TO  THE  IMPROVEMENT,  BEEN  FOUND TO HAVE HARASSED OR UNLAWFULLY
EVICTED TENANTS BY JUDGMENT OR DETERMINATION OF A COURT OR AGENCY  UNDER
THE  PENAL  LAW, ANY STATE OR LOCAL LAW REGULATING RENTS OR ANY STATE OR
LOCAL LAW RELATING TO HARASSMENT OF TENANTS OR UNLAWFUL EVICTION.
  UPON RECEIPT OF THE SCOPE OF WORK AND AFFIDAVIT PROVIDED  FOR  HEREIN,
THE  DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE THE TENANTS
IN OCCUPANCY IN SUCH BUILDINGS WITH SUCH INFORMATION.   THE DIVISION  OF
HOUSING  AND  COMMUNITY RENEWAL SHALL, IN ADDITION, IMPLEMENT PROCEDURES
INCLUDING, BUT NOT LIMITED TO, ELICITING TENANT  COMMENTS  TO  DETERMINE
WHETHER MAJOR CAPITAL IMPROVEMENT REHABILITATION WORK HAS BEEN SATISFAC-
TORILY  COMPLETED.  NO  MAJOR  CAPITAL  IMPROVEMENT  RENT INCREASE SHALL
BECOME EFFECTIVE UNTIL ANY DEFECTIVE OR  DEFICIENT  REHABILITATION  WORK
HAS BEEN CURED.
  S  4.  Subdivision  d  of section 6 of section 4 of chapter 576 of the
laws of 1974 constituting the emergency tenant protection act  of  nine-

S. 3173--A                          4

teen  seventy-four  is  amended  by  adding a new paragraph 6 to read as
follows:
  (6) NOTWITHSTANDING PARAGRAPH THREE OF THIS SUBDIVISION THERE SHALL BE
NO  ADJUSTMENT FOR ANY MAJOR CAPITAL IMPROVEMENT FUNDED IN ANY PART FROM
MONEYS PROVIDED BY THE NEW YORK STATE ENERGY  RESEARCH  AND  DEVELOPMENT
AUTHORITY.
  S 5. Paragraph 1 of subdivision g of section 26-405 of the administra-
tive  code  of  the city of New York is amended by adding a new subpara-
graph (p) to read as follows:
  (P) NOTWITHSTANDING SUBPARAGRAPH (G) OR (K) OF THIS  PARAGRAPH,  THERE
SHALL  BE  NO  ADJUSTMENT  FOR  ANY MAJOR CAPITAL IMPROVEMENT OR FOR ANY
OTHER EXPENDITURES TO IMPROVE, RESTORE OR  PRESERVE  THE  QUALITY  OF  A
STRUCTURE IF SUCH MAJOR CAPITAL IMPROVEMENT OR SUCH OTHER EXPENDITURE IS
FUNDED  IN  ANY  PART  FROM MONEYS PROVIDED BY THE NEW YORK STATE ENERGY
RESEARCH AND DEVELOPMENT AUTHORITY.
  S 6. This act shall take effect immediately, provided that:
  (a) the amendments to section 26-405 of the city  rent  and  rehabili-
tation  law  made  by  sections one and five 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;
  (b) the amendment to section 26-511 of the rent stabilization  law  of
nineteen hundred sixty-nine 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, as from time
to time amended; and
  (c) the amendments to section 6 of the emergency tenant protection act
of nineteen seventy-four made by sections three and  four  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, as from time to time amended.

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