S T A T E O F N E W Y O R K
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9324
I N A S S E M B L Y
February 18, 2016
___________
Introduced by M. of A. RICHARDSON -- read once and referred to the
Committee on Housing
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 the adjustment of maxi-
mum allowable rent and requiring the division of housing and community
renewal to confirm improvements have been made prior to the approval
of rent increases
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraphs (e) and (g) of paragraph 1 of subdivision g
of section 26-405 of the administrative code of the city of New York,
subparagraph (e) as amended by section 15 of part B of chapter 97 of the
laws of 2011 and subparagraph (g) as amended by section 31 of part A of
chapter 20 of the laws of 2015, are amended and a new paragraph 8 is
added to read as follows:
(e) 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. An adjustment under this subparagraph shall
be equal to 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 adjustment
takes effect on or after September twenty-fourth, two thousand eleven,
of the total cost incurred by the landlord in providing such modifica-
tion 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 subparagraph 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. AN OWNER ENTITLED TO A RENT
INCREASE PURSUANT TO THIS SUBPARAGRAPH SHALL ONLY BE ENTITLED TO SUCH
INCREASE FOR A PERIOD OF FIVE YEARS FROM THE DATE OF THE ADJUSTMENT. The
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13920-01-6
A. 9324 2
owner shall give written notice to the city rent agency of any such
adjustment pursuant to this subparagraph; or
(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
period for buildings with more than thiry-five units] SHALL ONLY BE IN
EFFECT FOR A PERIOD OF FIVE YEARS FROM THE DATE OF SUCH ADJUSTMENT, or
(8) BEFORE ORDERING ANY ADJUSTMENT IN RENT PURSUANT TO SUBPARAGRAPHS
(E) AND (G) OF PARAGRAPH ONE OF THIS SUBDIVISION, THE DIVISION OF HOUS-
ING AND COMMUNITY RENEWAL SHALL REQUIRE THE OWNER OF THE PROPERTY TO
FILE A STATEMENT WITH THE DIVISION CONTAINING INFORMATION OUTLINING THE
SCOPE OF THE WORK AND THE DATE OF COMPLETION OF SUCH WORK. UPON RECEIPT
OF SUCH STATEMENT, THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL
INSPECT THE PROPERTY TO ENSURE THE SPECIFIED WORK HAS BEEN COMPLETED. NO
INCREASE SHALL BE COLLECTIBLE UNDER SUBPARAGRAPHS (E) AND (G) OF PARA-
GRAPH ONE OF THIS SUBDIVISION WHERE THE DIVISION OF HOUSING AND COMMUNI-
TY RENEWAL HAS DETERMINED THE SPECIFIED WORK HAS NOT BEEN COMPLETED.
S 2. Paragraphs 6 and 13 of subdivision c of section 26-511 of the
administrative code of the city of New York, paragraph 6 as amended by
section 29 of part A of chapter 20 of the laws of 2015 and paragraph 13
as amended by section 16 of part B of chapter 97 of the laws of 2011,
are amended and two new paragraphs 6-b and 15 are added 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
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after the effective date of the rent act of 2015, based upon cash
purchase price exclusive of interest or service charges]. Notwithstand-
ing anything to the contrary contained herein, no hardship increase
granted pursuant to this paragraph shall, when added to the annual gross
rents, as determined by the commissioner, exceed the sum of, (i) the
annual operating expenses, (ii) an allowance for management services as
determined by the commissioner, (iii) actual annual mortgage debt
service (interest and amortization) on its 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 spread forward in similar incre-
ments and added to the stabilized rent as established or set in future
years;
(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 AS TO
COMPLETED BUILDING-WIDE MAJOR CAPITAL IMPROVEMENTS, AN OWNER SHALL ONLY
BE ENTITLED TO A RENT INCREASE FOR A FIVE YEAR PERIOD FROM THE DATE OF
THE APPROVED INCREASE.
(13) provides that an owner is 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 improve-
ments or new furniture or furnishings provided in or to a tenant's hous-
ing accommodation, on written tenant consent to the rent increase. In
the case of a vacant housing accommodation, tenant consent shall not be
required. The [permanent] increase in the legal regulated 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-sixti-
eth, in the case of a building with more than thirty-five housing accom-
modations where such [permanent] increase takes effect on or after
September twenty-fourth, two thousand eleven, of the total cost incurred
by the landlord in providing such modification or increase in dwelling
space, services, furniture, furnishings or equipment, including the cost
of installation, but excluding finance charges; PROVIDED, HOWEVER, THE
INCREASE ALLOWABLE UNDER THIS PARAGRAPH SHALL ONLY BE IN EFFECT FOR A
PERIOD OF FIVE YEARS FROM THE DATE OF SUCH INCREASE. Provided further
that an owner who is entitled to a rent increase pursuant to this para-
graph shall not be entitled to a further rent increase based upon the
installation of similar equipment, or new furniture or furnishings with-
in the useful life of such new equipment, or new furniture or
furnishings.
(15) PROVIDES THAT BEFORE ORDERING ANY ADJUSTMENT IN RENT PURSUANT TO
PARAGRAPHS SIX-B AND THIRTEEN OF THIS SUBDIVISION, THE DIVISION OF HOUS-
ING AND COMMUNITY RENEWAL SHALL REQUIRE THE OWNER OF THE PROPERTY TO
FILE A STATEMENT WITH THE DIVISION CONTAINING INFORMATION OUTLINING THE
SCOPE OF THE WORK AND THE DATE OF COMPLETION OF SUCH WORK. UPON RECEIPT
OF SUCH STATEMENT, THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL
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INSPECT THE PROPERTY TO ENSURE THE SPECIFIED WORK HAS BEEN COMPLETED. NO
INCREASE SHALL BE COLLECTIBLE UNDER PARAGRAPHS SIX-B AND THIRTEEN OF
THIS SUBDIVISION WHERE THE DIVISION OF HOUSING AND COMMUNITY RENEWAL HAS
DETERMINED THE SPECIFIED WORK HAS NOT BEEN COMPLETED.
S 3. Paragraphs 1 and 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, paragraph 1 as amended by
section 18 of part B of chapter 97 of the laws of 2011 and paragraph 3
as amended by section 30 of part A of chapter 20 of the laws of 2015,
are amended and a new paragraph 6 is added to read as follows:
(1) there has been a substantial modification or increase of dwelling
space or an increase in the services, or installation of new equipment
or improvements or new furniture or furnishings, provided in or to a
tenant's housing accommodation, on written tenant consent to the rent
increase. In the case of a vacant housing accommodation, tenant consent
shall not be required. The [permanent] increase in the legal regulated
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 twenty-fourth, two thousand eleven, of the total cost
incurred by the landlord in providing such modification or increase in
dwelling space, services, furniture, furnishings or equipment, including
the cost of installation, but excluding finance charges; PROVIDED,
HOWEVER, THE INCREASE ALLOWABLE UNDER THIS PARAGRAPH SHALL ONLY BE IN
EFFECT FOR A PERIOD OF FIVE YEARS FROM THE DATE OF SUCH INCREASE.
Provided further that an owner who is entitled to a rent increase pursu-
ant to this paragraph shall not be entitled to a further rent increase
based upon the installation of similar equipment, or new furniture or
furnishings within the useful life of such new equipment, or new furni-
ture or furnishings.
(3) there has been since January first, nineteen hundred seventy-four
a major capital improvement required for the operation, preservation or
maintenance of the structure. An adjustment under this paragraph shall
[be in an amount sufficient to amortize the cost of the improvements
pursuant to this paragraph over an eight-year period for a building with
thirty-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] ONLY BE IN EFFECT FOR
A PERIOD OF FIVE YEARS FROM THE DATE OF SUCH ADJUSTMENT, or
(6) BEFORE ORDERING ANY ADJUSTMENT IN RENT PURSUANT TO PARAGRAPHS ONE
AND THREE OF THIS SUBDIVISION, THE DIVISION OF HOUSING AND COMMUNITY
RENEWAL SHALL REQUIRE THE OWNER OF THE PROPERTY TO FILE A STATEMENT WITH
THE DIVISION CONTAINING INFORMATION OUTLINING THE SCOPE OF THE WORK AND
THE DATE OF COMPLETION OF SUCH WORK. UPON RECEIPT OF SUCH STATEMENT, THE
DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL INSPECT THE PROPERTY TO
ENSURE THE SPECIFIED WORK HAS BEEN COMPLETED. NO INCREASE SHALL BE
COLLECTIBLE UNDER PARAGRAPHS ONE AND THREE OF THIS SUBDIVISION WHERE THE
DIVISION OF HOUSING AND COMMUNITY RENEWAL HAS DETERMINED THE SPECIFIED
WORK HAS NOT BEEN COMPLETED.
S 4. Clauses 5 and 7 of 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, clause 5 as amended
by section 25 of part B of chapter 97 of the laws of 2011 and clause 7
A. 9324 5
as amended by section 32 of part A of chapter 20 of the laws of 2015,
are amended to read as follows:
(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 installa-
tion of new equipment or improvements or new furniture 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 twenty-fourth, two thousand
eleven, of the total cost incurred by the landlord in providing such
modification or increase in dwelling space, services, furniture,
furnishings or 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; PROVIDED, HOWEVER, THE
INCREASE ALLOWABLE UNDER THIS CLAUSE SHALL ONLY BE IN EFFECT FOR A PERI-
OD OF FIVE YEARS FROM THE DATE OF SUCH INCREASE. The owner shall give
written notice to the commission of any such adjustment pursuant to this
clause; PROVIDED, HOWEVER, BEFORE ANY ADJUSTMENT IN RENT SHALL TAKE
EFFECT PURSUANT TO THIS CLAUSE, THE DIVISION OF HOUSING AND COMMUNITY
RENEWAL SHALL REQUIRE THE OWNER OF THE PROPERTY TO FILE A STATEMENT WITH
THE DIVISION CONTAINING INFORMATION OUTLINING THE SCOPE OF THE WORK AND
THE DATE OF COMPLETION OF SUCH WORK. UPON RECEIPT OF SUCH STATEMENT, THE
DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL INSPECT THE PROPERTY TO
ENSURE THE SPECIFIED WORK HAS BEEN COMPLETED. NO INCREASE SHALL BE
COLLECTIBLE UNDER THIS CLAUSE WHERE THE DIVISION OF HOUSING AND COMMUNI-
TY RENEWAL HAS DETERMINED THE SPECIFIED WORK HAS NOT BEEN COMPLETED; or
(7) there has been since March first, nineteen hundred fifty, a major
capital improvement required for the operation, preservation or mainte-
nance 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 units,] SHALL ONLY BE IN EFFECT FOR A PERIOD OF
FIVE YEARS FROM THE DATE OF SUCH ADJUSTMENT. BEFORE ORDERING ANY ADJUST-
MENT IN RENT PURSUANT TO THIS CLAUSE, THE DIVISION OF HOUSING AND COMMU-
NITY RENEWAL SHALL REQUIRE THE OWNER OF THE PROPERTY TO FILE A STATEMENT
WITH THE DIVISION CONTAINING INFORMATION OUTLINING THE SCOPE OF THE WORK
AND THE DATE OF COMPLETION OF SUCH WORK. UPON RECEIPT OF SUCH STATEMENT,
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL INSPECT THE PROPERTY
TO ENSURE THE SPECIFIED WORK HAS BEEN COMPLETED. NO INCREASE SHALL BE
COLLECTIBLE UNDER THIS CLAUSE WHERE THE DIVISION OF HOUSING AND COMMUNI-
TY RENEWAL HAS DETERMINED THE SPECIFIED WORK HAS NOT BEEN COMPLETED; or
S 5. 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 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
A. 9324 6
subdivision 3 of section 1 of the local emergency housing rent control
act;
(b) the amendments to section 26-511 of chapter 4 of title 26 of the
administrative code of the city of New York made by section two of this
act shall expire on the same date as such law expires and shall not
affect the expiration of such law as provided under section 26-520 of
such law;
(c) the amendments 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;
(d) the amendments 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.