S T A T E O F N E W Y O R K
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9329
I N A S S E M B L Y
February 18, 2016
___________
Introduced by M. of A. ROSENTHAL -- 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 applications for 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. 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
period for buildings with more than [thiry-five] THIRTY-FIVE units[,];
PROVIDED, HOWEVER, NO APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT
INCREASE SHALL BE APPROVED BY THE DIVISION OF HOUSING AND COMMUNITY
RENEWAL UNLESS THE OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS
PERTAINING TO THE MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH APPLICATION.
ANY APPLICATION SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED
PERMITS SHALL BE DENIED; or
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11796-01-5
A. 9329 2
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 COPIES OF
ALL PERMITS PERTAINING TO MAJOR CAPITAL IMPROVEMENT WORK WITH ANY APPLI-
CATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE. ANY APPLICATION
SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL BE
DENIED. 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 manage-
ment 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 increments and added to the stabilized rent as established or
set in future years;
S 3. 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 section 30 of part A of
chapter 20 of the laws of 2015, is amended to read as follows:
(3) there has been since January first, nineteen hundred seventy-four
a major capital improvement required for the operation, preservation or
A. 9329 3
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[,]; PROVIDED, HOWEVER,
NO APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE SHALL BE
APPROVED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE
OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE
MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH APPLICATION. ANY APPLICATION
SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL BE
DENIED; or
S 4. Subparagraph 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, as amended by
section 32 of part A of chapter 20 of the laws of 2015, is amended to
read as follows:
(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] THIRTY-FIVE units[,]; PROVIDED, HOWEVER, NO
APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE SHALL BE
APPROVED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE
OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE
MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH APPLICATION. ANY APPLICATION
SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL BE
DENIED; 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
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 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, as from time to time amended; and
(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.