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

                                 3957--A

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            January 28, 2015
                               ___________

Introduced by M. of A. WRIGHT -- read once and referred to the Committee
  on  Housing  --  recommitted to the Committee on Housing in accordance
  with Assembly Rule 3, sec. 2 -- 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, in
  relation to rent adjustments for major capital improvements

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

  Section 1. 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
section  31  of  part A of chapter 20 of the laws of 2015, 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. An adjustment under this subparagraph [(g)] for
any order of the commissioner issued after the  effective  date  of  the
rent  act  of 2015 shall be in an amount sufficient to amortize the cost
of the improvements pursuant to this subparagraph [(g)] over  an  eight-
year  period  for  buildings  with thirty-five or fewer units or a [nine
year]  NINE-YEAR  period  for  buildings  with  more  than   thirty-five
units[,].  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  FOR,
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 IMPROVE-
MENT; or

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05400-02-6

A. 3957--A                          2
              

  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:
  (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. A RENT ADJUST-
MENT 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 FOR, 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 deter-
mined by the commissioner, (iii) actual  annual  mortgage  debt  service
(interest  and  amortization)  on its indebtedness to a lending institu-
tion, 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

A. 3957--A                          3

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 incre-
ments and added to the stabilized rent as established or set  in  future
years;
  S  3.  This  act shall take effect immediately, provided, however that
the amendments to 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 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 the provisions of sections one and two of this act shall only apply
to  those buildings that commence work on a major capital improvement 45
days or later than the effective date of this act.