Senate Bill S3889A

2015-2016 Legislative Session

Requires the state division of housing and community renewal to verify there are no violations on the property prior to authorizing a rent increase for major capital

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Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 14, 2016	print number 3889a
Jan 14, 2016	amend and recommit to housing, construction and community development
Jan 06, 2016	referred to housing, construction and community development
Feb 20, 2015	referred to housing, construction and community development

Bill Amendments

Original

A (Active)

co-Sponsors

2015-S3889 - Details

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; amd §4, Emerg Hous Rent Cont L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S7760
2013-2014: S2830
2017-2018: S3612
2019-2020: S4539
2021-2022: S4948
2023-2024: S6043
2025-2026: S4217

2015-S3889 - Summary

Requires the state division of housing and community renewal to verify there are no class B or C housing code violations or no more than 30 class A housing code violations on the property prior to authorizing a rent increase for major capital improvements for such property; provides that outstanding violations shall be corrected by the landlord and verified by the city rent agency prior to authorization of a rent increase.

2015-S3889 - Sponsor Memo

                                BILL NUMBER:S3889

TITLE OF BILL:

An act to amend the administrative code of the city of New York, the
emergency tenant protection act of nineteen seventy-four and the
emergency housing rent control law, in relation to requiring the state
division of housing and community renewal to verify there are no
housing code violations prior to authorizing a rent increase for major
capital improvements

PURPOSE OR GENERAL IDEA OF BILL:

The purpose of the bill is to require the state division of housing
and community renewal to verify, in collaboration with local
authorities responsible for inspecting buildings, that the landlord
applying for rent increase based on major capital improvement has no
more than A, no B, and C housing code violations on the property.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1: amends subdivision (g) 26-405 of the administrative code of
the city of New York is amended by adding a new subparagraph requiring
the state division of housing and community renewal to verify, in
collaboration with local authorities responsible for inspecting
buildings, that the landlord filing an application for major capital

improvement does not have an more than thirty class A, or a class 3,
or C housing code violation on the property.

Section 2: amends paragraph 6 of subdivision (c) of section 26-511 of
the administrative code of the city of New York to require the state
division of housing and community renewal to verify, in collaboration
with local authorities responsible for inspecting buildings, that the
landlord filing an application for major capital improvement does not
have an more than thirty class A, or a class B, or C housing code
violation on the property.

Section 3: amends subdivision d of section 6 of section 4 of chapter
576 of the laws of 1974 by adding paragraph 6 to require the state
division of housing and community renewal to verify, in collaboration
with local authorities responsible for inspecting buildings, that the
landlord filing an application for major capital improvement does not
have an more than thirty class A, or a class B, or C housing code
violation on the property.

Section 4: amends the second undesignated paragraph of paragraph (a)
of subdivision 4 of section 4 of the emergency rent control law to
amends section (g) 26-405 of the administrative code of the city of
New York is amended by adding a new subparagraph requiring the state
division of housing and community renewal to verify, in collaboration
with local authorities responsible for inspecting buildings, that the
landlord filing an application for major capital improvement does not
have an more than thirty class A, or a class B or C housing code
violation on the property.

Section 5: establishes effective date and related specific provisions.


JUSTIFICATION:

Since July 1, 1970, a major capital improvement is required for the
operation, preservation or maintenance of the structure. Under these
circumstances, a rent increase is authorized for rent controlled
apartments. Rent increases for rent stabilized apartments require the
improvement to be building-wide, needed for the operation,
preservation or maintenance of the structure; depreciable under the
Internal Revenue Code, other than for ordinary repairs; and to replace
an item whose useful life has expired.

Class A housing code violations are classified as non-hazardous and
include minor leaks, chipping or peeling paint when no children under
the age of six live in the home, or lack of signs designating floor
numbers. Class B violations are classified as hazardous such as
inadequate lighting in public areas, lack of posted certificate of
occupancy, or removal of vermin. Class C are immediately hazardous
violations and include inadequate fire exits, rodents, lead-based
paint, lack of heat, hot water, electricity, or gas.

Currently, only class C violations prevent the state division of
housing and community renewal (DHCR) from approving a rent increase
based on major capital improvement. Tenants, however, are forced to
pay a higher rent even when class A and S violations are not corrected
by the landlord. It is the responsibility of landlords to provide
essential services to their tenants, repair housing code violations,
and maintain their properties in habitable conditions.

PRIOR LEGISLATIVE HISTORY:

2013-14: S.2830 - Referred to Housing
2011-12: S.7760/A.10170 - Referred to Rules/Referred to Codes.

FISCAL IMPLICATIONS:

To be determined.

EFFECTIVE DATE:

This act shall take effect on the sixtieth day after it shall have
become a law; with provisions.

2015-S3889 - Bill Text download pdf

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

                                  3889

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 20, 2015
                               ___________

Introduced  by  Sens.  PARKER, AVELLA -- 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, the
  emergency tenant protection act of nineteen seventy-four and the emer-
  gency housing rent control law, in relation  to  requiring  the  state
  division of housing and community renewal to verify there are no hous-
  ing  code  violations  prior  to authorizing a rent increase for major
  capital improvements

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

  Section  1.  Paragraph  1  of  subdivision  g of section 26-405 of the
administrative code of the city of New York is amended by adding  a  new
subparagraph (p) to read as follows:
  (P)  ADJUSTMENTS  MADE  PURSUANT TO SUBPARAGRAPH (G) OF THIS PARAGRAPH
SHALL BE COLLECTIBLE UPON THE LANDLORD'S FILING OF  A  REPORT  WITH  THE
CITY RENT AGENCY, SUBJECT TO THE PROVISIONS OF SUBPARAGRAPH (E) OF PARA-
GRAPH  TWO OF SUBDIVISION A OF THIS SECTION AND VERIFICATION BY THE CITY
RENT AGENCY, IN COLLABORATION WITH  LOCAL  AUTHORITIES  RESPONSIBLE  FOR
INSPECTING  BUILDINGS, THAT THE APPLICANT DOES NOT HAVE MORE THAN THIRTY
CLASS A HOUSING CODE VIOLATIONS OR A CLASS B OR C HOUSING CODE VIOLATION
ON THE PROPERTY. OUTSTANDING HOUSING  CODE  VIOLATIONS  THAT  ARE  FOUND
SHALL  BE  CLEARED,  CORRECTED OR ABATED BY THE LANDLORD AND VERIFIED BY
THE CITY RENT AGENCY PRIOR TO AUTHORIZATION OF  A  RENT  INCREASE  UNDER
SUBPARAGRAPH (G) OF THIS PARAGRAPH.
  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-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06803-01-5

S. 3889                             2

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 DIVISION OF HOUSING
AND COMMUNITY RENEWAL SHALL REQUIRE THE SUBMISSION OF A REPORT BY  LAND-
LORDS APPLYING FOR A RENT INCREASE FOR MAJOR CAPITAL IMPROVEMENTS PURSU-
ANT  TO  THIS  PARAGRAPH  AND SUBJECT TO VERIFICATION BY THE DIVISION OF
HOUSING AND COMMUNITY RENEWAL, IN COLLABORATION WITH  LOCAL  AUTHORITIES
RESPONSIBLE FOR INSPECTING BUILDINGS, CERTIFYING THAT THERE ARE NOT MORE
THAN  THIRTY  CLASS A HOUSING CODE VIOLATIONS NOR A CLASS B OR C HOUSING
CODE VIOLATION ON THE PROPERTY, PRIOR TO  RECEIVING  APPROVAL  FOR  SUCH
RENT  INCREASE. Notwithstanding anything to the contrary contained here-
in, 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
(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.  Subdivision  d  of section 6 of section 4 of chapter 576 of the
laws of 1974, constituting the emergency tenant protection act of  nine-
teen  seventy-four,  is  amended  by adding a new paragraph 6 to read as
follows:

S. 3889                             3

  (6) ADJUSTMENTS MADE PURSUANT TO PARAGRAPH  (3)  OF  THIS  SUBDIVISION
SHALL  BE  COLLECTABLE  UPON  THE LANDLORD'S FILING OF A REPORT WITH THE
STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL AND SUBJECT TO VERIFICA-
TION BY THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, IN  COLLAB-
ORATION  WITH  LOCAL  AUTHORITIES  RESPONSIBLE FOR INSPECTING BUILDINGS,
THAT THE APPLICANT DOES NOT HAVE MORE THAN THIRTY CLASS A  HOUSING  CODE
VIOLATIONS  OR  A  CLASS  B OR C HOUSING CODE VIOLATION ON THE PROPERTY.
OUTSTANDING HOUSING CODE VIOLATIONS THAT ARE  FOUND  SHALL  BE  CLEARED,
CORRECTED  OR  ABATED BY THE LANDLORD AND VERIFIED BY THE STATE DIVISION
OF HOUSING AND COMMUNITY  RENEWAL  PRIOR  TO  AUTHORIZATION  OF  A  RENT
INCREASE UNDER PARAGRAPH (3) OF THIS SUBDIVISION.
  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 valuation
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 property, excluding mort-
gage interest and amortization, and excluding  allowances  for  obsoles-
cence  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 buildings shall be included
where the buildings have been fully depreciated 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  compen-
sated  by  increases  in  rental income sufficient to offset unavoidable
increases in property taxes, fuel, utilities, insurance and repairs  and
maintenance, excluding 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 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  excluding  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

S. 3889                             4

property, whichever is later; or (4) the landlord and tenant voluntarily
enter into a valid written lease in good faith with respect to any hous-
ing  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 landlord 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 furni-
ture  or furnishings provided in or to a tenant's housing accommodation.
The permanent increase in the maximum  rent  for  the  affected  housing
accommodation  shall  be  one-fortieth,  in  the case of a building with
thirty-five or fewer housing accommodations,  or  one-sixtieth,  in  the
case  of  a  building  with more than thirty-five housing accommodations
where such permanent increase takes effect on or after  September  twen-
ty-fourth,  two thousand eleven, of the total cost incurred by the land-
lord in providing such  modification  or  increase  in  dwelling  space,
services,  furniture,  furnishings  or  equipment, including the cost of
installation, but excluding finance charges  provided  further  that  an
owner  who  is entitled to a rent increase pursuant 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 furniture or furnishings.  The  owner
shall  give  written  notice  to  the  commission of any such adjustment
pursuant to this clause; or (6) there has been, since March first, nine-
teen hundred fifty, an increase in  the  rental  value  of  the  housing
accommodations as a result of a substantial rehabilitation of the build-
ing  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 capital improvement required for
the operation, preservation or maintenance  of  the  structure;  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,  howev-
er, 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  compen-
sated  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.  ADJUSTMENTS MADE PURSUANT TO  SUBPARAGRAPH  (7)
OF  THIS  PARAGRAPH SHALL BE COLLECTIBLE UPON THE LANDLORD'S FILING OF A
REPORT WITH THE COMMISSION AND SUBJECT TO VERIFICATION  BY  THE  COMMIS-
SION, IN COLLABORATION WITH LOCAL AUTHORITIES RESPONSIBLE FOR INSPECTING
BUILDINGS,  THAT  THE  APPLICANT DOES NOT HAVE MORE THAN  THIRTY CLASS A

S. 3889                             5

HOUSING CODE VIOLATIONS OR A CLASS B OR C HOUSING CODE VIOLATION ON  THE
PROPERTY.  OUTSTANDING  HOUSING  CODE VIOLATIONS THAT ARE FOUND SHALL BE
CLEARED, CORRECTED OR ABATED BY THE LANDLORD AND VERIFIED BY THE COMMIS-
SION PRIOR TO AUTHORIZATION OF A RENT INCREASE UNDER SUBPARAGRAPH (7) OF
THIS PARAGRAPH.
  S  5.  This  act  shall take effect on the sixtieth day after it shall
have become a law; provided that:
  (a) the amendments to section 26-405 of the city  rent  and  rehabili-
tation  law  made  by section one of this act shall remain in full force
and effect only as 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 amendments 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;
  (c)  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, as from time to time amended; and
  (d) 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.

co-Sponsors

2015-S3889A (ACTIVE) - Details

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; amd §4, Emerg Hous Rent Cont L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S7760
2013-2014: S2830
2017-2018: S3612
2019-2020: S4539
2021-2022: S4948
2023-2024: S6043
2025-2026: S4217

2015-S3889A (ACTIVE) - Summary

2015-S3889A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S3889A

 TITLE OF BILL :

An act to amend the administrative code of the city of New York, the
emergency tenant protection act of nineteen seventy-four and the
emergency housing rent control law, in relation to requiring the state
division of housing and community renewal to verify there are no
housing code violations prior to authorizing a rent increase for major
capital improvements

 PURPOSE OR GENERAL IDEA OF BILL :

The purpose of the bill is to require the state division of housing
and community renewal to verify, in collaboration with local
authorities responsible for inspecting buildings, that the landlord
applying for rent increase based on major capital improvement has no
more than A, no B, and C housing code violations on the property.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1: amends subdivision (g) 26-405 of the administrative code of
the city of New York is amended by adding a new subparagraph requiring
the state division of housing and community renewal to verify, in
collaboration with local authorities responsible for inspecting
buildings, that the landlord filing an application for major capital

improvement does not have an more than thirty class A, or a class 3,
or C housing code violation on the property.

Section 2: amends paragraph 6 of subdivision (c) of section 26-511 of
the administrative code of the city of New York to require the state
division of housing and community renewal to verify, in collaboration
with local authorities responsible for inspecting buildings, that the
landlord filing an application for major capital improvement does not
have an more than thirty class A, or a class B, or C housing code
violation on the property.

Section 3: amends subdivision d of section 6 of section 4 of chapter
576 of the laws of 1974 by adding paragraph 6 to require the state
division of housing and community renewal to verify, in collaboration
with local authorities responsible for inspecting buildings, that the
landlord filing an application for major capital improvement does not
have an more than thirty class A, or a class B, or C housing code
violation on the property.

Section 4: amends the second undesignated paragraph of paragraph (a)
of subdivision 4 of section 4 of the emergency rent control law to
amends section (g) 26-405 of the administrative code of the city of
New York is amended by adding a new subparagraph requiring the state
division of housing and community renewal to verify, in collaboration
with local authorities responsible for inspecting buildings, that the
landlord filing an application for major capital improvement does not
have an more than thirty class A, or a class B or C housing code
violation on the property.

Section 5: establishes effective date and related specific provisions.

 JUSTIFICATION :

Since July 1, 1970, a major capital improvement is required for the
operation, preservation or maintenance of the structure. Under these
circumstances, a rent increase is authorized for rent controlled
apartments. Rent increases for rent stabilized apartments require the
improvement to be building-wide, needed for the operation,
preservation or maintenance of the structure; depreciable under the

Internal Revenue Code, other than for ordinary repairs; and to replace
an item whose useful life has expired.

Class A housing code violations are classified as non-hazardous and
include minor leaks, chipping or peeling paint when no children under
the age of six live in the home, or lack of signs designating floor
numbers. Class B violations are classified as hazardous such as
inadequate lighting in public areas, lack of posted certificate of
occupancy, or removal of vermin. Class C are immediately hazardous
violations and include inadequate fire exits, rodents, lead-based
paint, lack of heat, hot water, electricity, or gas.

Currently, only class C violations prevent the state division of
housing and community renewal (DHCR) from approving a rent increase
based on major capital improvement. Tenants, however, are forced to
pay a higher rent even when class A and S violations are not corrected
by the landlord. It is the responsibility of landlords to provide
essential services to their tenants, repair housing code violations,
and maintain their properties in habitable conditions.

 PRIOR LEGISLATIVE HISTORY :

2013-14: S.2830 - Referred to Housing
2011-12: S.7760/A.10170 - Referred to Rules/Referred to Codes.

 FISCAL IMPLICATIONS :

To be determined.

 EFFECTIVE DATE :
This act shall take effect on the sixtieth day after it shall have
become a law; with provisions.

2015-S3889A (ACTIVE) - Bill Text download pdf

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

                                 3889--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 20, 2015
                               ___________

Introduced  by  Sens.  PARKER, AVELLA -- read twice and ordered printed,
  and when  printed  to  be  committed  to  the  Committee  on  Housing,
  Construction and Community Development -- recommitted to the Committee
  on  Housing, Construction and Community Development in accordance with
  Senate Rule 6, sec. 8 -- 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, the
  emergency tenant protection act of nineteen seventy-four and the emer-
  gency housing rent control law, in relation  to  requiring  the  state
  division of housing and community renewal to verify there are no hous-
  ing  code  violations  prior  to authorizing a rent increase for major
  capital improvements

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

  Section  1.  Paragraph  1  of  subdivision  g of section 26-405 of the
administrative code of the city of New York is amended by adding  a  new
subparagraph (p) to read as follows:
  (P)  ADJUSTMENTS  MADE  PURSUANT TO SUBPARAGRAPH (G) OF THIS PARAGRAPH
SHALL BE COLLECTIBLE UPON THE LANDLORD'S FILING OF  A  REPORT  WITH  THE
CITY RENT AGENCY, SUBJECT TO THE PROVISIONS OF SUBPARAGRAPH (E) OF PARA-
GRAPH  TWO OF SUBDIVISION A OF THIS SECTION AND VERIFICATION BY THE CITY
RENT AGENCY, IN COLLABORATION WITH  LOCAL  AUTHORITIES  RESPONSIBLE  FOR
INSPECTING  BUILDINGS, THAT THE APPLICANT DOES NOT HAVE MORE THAN THIRTY
CLASS A HOUSING CODE VIOLATIONS OR A CLASS B OR C HOUSING CODE VIOLATION
ON THE PROPERTY. OUTSTANDING HOUSING  CODE  VIOLATIONS  THAT  ARE  FOUND
SHALL  BE  CLEARED,  CORRECTED OR ABATED BY THE LANDLORD AND VERIFIED BY
THE CITY RENT AGENCY PRIOR TO AUTHORIZATION OF  A  RENT  INCREASE  UNDER
SUBPARAGRAPH (G) OF THIS PARAGRAPH.
  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 section 29 of part A of
chapter 20 of the laws of 2015, is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06803-02-6

S. 3889--A                          2

  (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 an eight-year period for a building  with  thir-
ty-five  or  fewer  housing  accommodations, or a nine-year period for a
building with more than  thirty-five  housing  accommodations,  for  any
determination  issued  by  the division of housing and community renewal
after the effective date of the  rent  act  of  2015,  based  upon  cash
purchase  price  exclusive of interest or service charges.  THE DIVISION
OF HOUSING AND COMMUNITY RENEWAL  SHALL  REQUIRE  THE  SUBMISSION  OF  A
REPORT  BY  LANDLORDS  APPLYING  FOR  A  RENT INCREASE FOR MAJOR CAPITAL
IMPROVEMENTS PURSUANT TO THIS PARAGRAPH AND SUBJECT TO  VERIFICATION  BY
THE  DIVISION  OF  HOUSING  AND COMMUNITY RENEWAL, IN COLLABORATION WITH
LOCAL AUTHORITIES RESPONSIBLE FOR INSPECTING BUILDINGS, CERTIFYING  THAT
THERE  ARE  NOT  MORE  THAN THIRTY CLASS A HOUSING CODE VIOLATIONS NOR A
CLASS B OR C HOUSING CODE VIOLATION ON THE PROPERTY, PRIOR TO  RECEIVING
APPROVAL FOR SUCH RENT INCREASE. Notwithstanding anything to the contra-
ry contained herein, no hardship increase granted pursuant to this para-
graph  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  indebtedness  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 (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 mortgage 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

S. 3889--A                          3

spread forward in similar increments and added to the stabilized rent as
established or set in future years;
  S  3.  Subdivision  d  of section 6 of section 4 of chapter 576 of the
laws of 1974, constituting the emergency tenant protection act of  nine-
teen  seventy-four,  is  amended  by adding a new paragraph 6 to read as
follows:
  (6) ADJUSTMENTS MADE PURSUANT TO PARAGRAPH  (3)  OF  THIS  SUBDIVISION
SHALL  BE  COLLECTABLE  UPON  THE LANDLORD'S FILING OF A REPORT WITH THE
STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL AND SUBJECT TO VERIFICA-
TION BY THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL, IN  COLLAB-
ORATION  WITH  LOCAL  AUTHORITIES  RESPONSIBLE FOR INSPECTING BUILDINGS,
THAT THE APPLICANT DOES NOT HAVE MORE THAN THIRTY CLASS A  HOUSING  CODE
VIOLATIONS  OR  A  CLASS  B OR C HOUSING CODE VIOLATION ON THE PROPERTY.
OUTSTANDING HOUSING CODE VIOLATIONS THAT ARE  FOUND  SHALL  BE  CLEARED,
CORRECTED  OR  ABATED BY THE LANDLORD AND VERIFIED BY THE STATE DIVISION
OF HOUSING AND COMMUNITY  RENEWAL  PRIOR  TO  AUTHORIZATION  OF  A  RENT
INCREASE UNDER PARAGRAPH (3) OF THIS SUBDIVISION.
  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, subparagraph 7 as amended by section
32 of part A of chapter 20 of the laws of 2015, 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 valuation
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 property, excluding mort-
gage interest and amortization, and excluding  allowances  for  obsoles-
cence  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 buildings shall be included
where the buildings have been fully depreciated 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  compen-
sated  by  increases  in  rental income sufficient to offset unavoidable
increases in property taxes, fuel, utilities, insurance and repairs  and
maintenance, excluding 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 property was acquired by the present owner, whichever is  later;  or
(3) the landlord operates a hotel or rooming house or owns a cooperative

S. 3889--A                          4

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  excluding  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 hous-
ing  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 landlord 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 furni-
ture or furnishings provided in or to a tenant's housing  accommodation.
The  permanent  increase  in  the  maximum rent for the affected housing
accommodation shall be one-fortieth, in the  case  of  a  building  with
thirty-five  or  fewer  housing  accommodations, or one-sixtieth, in the
case of a building with more  than  thirty-five  housing  accommodations
where  such  permanent increase takes effect on or after September twen-
ty-fourth, two thousand eleven, of the total cost incurred by the  land-
lord  in  providing  such  modification  or  increase in dwelling space,
services, furniture, furnishings or equipment,  including  the  cost  of
installation,  but  excluding  finance  charges provided further that an
owner who is entitled to a rent increase pursuant 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 furniture or furnishings. The owner
shall give written notice to  the  commission  of  any  such  adjustment
pursuant to this clause; or (6) there has been, since March first, nine-
teen  hundred  fifty,  an  increase  in  the rental value of the housing
accommodations as a result of a substantial rehabilitation of the build-
ing 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 capital improvement required  for
the  operation,  preservation or maintenance of the structure; which for
any order of the commissioner issued after the  effective  date  of  the
rent act of 2015 the cost of such improvement shall be amortized over an
eight-year  period  for  buildings  with thirty-five or fewer units or a
nine year period for buildings with more than  [thiry-five]  THIRTY-FIVE
units,  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

S. 3889--A                          5

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.  ADJUSTMENTS MADE PURSUANT  TO  SUBPARA-
GRAPH  (7)  OF  THIS  PARAGRAPH SHALL BE COLLECTIBLE UPON THE LANDLORD'S
FILING OF A REPORT WITH THE COMMISSION AND SUBJECT  TO  VERIFICATION  BY
THE  COMMISSION, IN COLLABORATION WITH LOCAL AUTHORITIES RESPONSIBLE FOR
INSPECTING BUILDINGS, THAT THE APPLICANT DOES NOT HAVE MORE THAN  THIRTY
CLASS A HOUSING CODE VIOLATIONS OR A CLASS B OR C HOUSING CODE VIOLATION
ON THE PROPERTY. OUTSTANDING HOUSING CODE VOLITIONS THAT ARE FOUND SHALL
BE  CLEARED,  CORRECTED  OR  ABATED  BY THE LANDLORD AND VERIFIED BY THE
COMMISSION PRIOR TO AUTHORIZATION OF A RENT INCREASE UNDER  SUBPARAGRAPH
(7) OF THIS PARAGRAPH.
  S  5.  This  act  shall take effect on the sixtieth day after it shall
have become a law; provided that:
  (a) the amendments to section 26-405 of the city  rent  and  rehabili-
tation  law  made  by section one of this act shall remain in full force
and effect only as 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 amendments 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;
  (c)  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, as from time to time amended; and
  (d) 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.

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Senate Bill S3889A

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Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

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Sponsored By

Kevin S. Parker

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

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Tony Avella

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