NY State Senate Bill 2015-S2830A

Senate Bill S2830A

2015-2016 Legislative Session

Requires the cost of major capital improvements to be recovered through a monthly surcharge on rents

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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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 23, 2016	print number 2830a
Mar 23, 2016	amend and recommit to housing, construction and community development
Jan 06, 2016	referred to housing, construction and community development
Jan 29, 2015	referred to housing, construction and community development

Bill Amendments

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A (Active)

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2015-S2830 - 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:: 2009-2010: S745
2011-2012: S523
2013-2014: S1493
2017-2018: S3190

2015-S2830 - Summary

Establishes a methodology for determining major capital improvements (MCI) rent surcharges; provides that such MCI shall be calculated as a rent surcharge and shall not become part of the base legal regulated rent by which rent increases are calculated, and requires the amount thereof to be separately designated and billed as such; codifies current practices regarding the annual 6% cap on MCI increases and the methodology for determining MCI surcharges based on the number of rooms; requires that rent surcharges authorized for major capital improvements shall cease when the cost of the improvement has been recovered.

2015-S2830 - Sponsor Memo

                                BILL NUMBER:S2830

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 extending the
length of time over which major capital improvement expenses may be
recovered

PURPOSE OR GENERAL IDEA OF THE BILL:

Expenses for major capital improvements in rental housing are
currently recovered over seven years in calculating the permissible
monthly rent increase. This bill codifies the MCI as a surcharge to
the legal regulated rent which is separately designated and billed as
such and mandates that the authorized surcharge for MCI's ceases after
the cost of the improvement is recouped.

SUMMARY OF SPECIFIC PROVISIONS:

Establishes a methodology fox determining MCI rent surcharges based on
seven years. MCI's are calculated as a rent surcharge and do not
become part of the base legal regulated rent by which rent increases
are calculated, and are separately designated and billed as such. The
legislation also codifies current practices regarding the annual 64

cap on MCI increases and the methodology for determining MCI
surcharges based on number of rooms. Furthermore, the bill would
require that the rent surcharges authorized for major capital
improvements cease when the cost of the improvement has been
recovered.

JUSTIFICATION:

Since the actual cost of the improvement is recovered after seven
years of increased rent collection, this ruling means that tenants are
forced to continue to pay for improvements long after costs have been
fully recovered, and even after they have outlived their useful life.
In addition, most MCI's, such as window replacement or heating system
improvements, create energy savings that further increase the
profitability of MCI's. This bill seeks to balance the conflicting
concerns of maintaining affordable housing and insuring adequate
incentives for investment in MCI's in order to preserve and improve
our housing stock. Since the court permits MCI's to be collected in
perpetuity, landlords are allowed to recoup an amount well beyond
their actual costs and are ensured a reasonable return on their
investment.

LEGISLATIVE HISTORY:

2009-2010: S.745-A/A.1928
2011-2012: S.523-A/A.24.59-A
2013-2014: S.1493

FISCAL IMPACT:

None.


EFFECTIVE DATE:

Immediately, with provisions.

2015-S2830 - Bill Text download pdf

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

                                  2830

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 29, 2015
                               ___________

Introduced  by  Sens. KRUEGER, AVELLA, HAMILTON, HASSELL-THOMPSON, HOYL-
  MAN, LATIMER, MONTGOMERY, PARKER, PERALTA, PERKINS, SERRANO, STAVISKY,
  STEWART-COUSINS -- 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 extending the length of
  time over which major capital improvement expenses may be recovered

  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
chapter 749 of the laws of 1990,  is amended to read as follows:
  (g) (I) COLLECTION OF SURCHARGES TO THE MAXIMUM RENT AUTHORIZED PURSU-
ANT  TO  ITEM  (II)  OF THIS SUBPARAGRAPH SHALL CEASE WHEN THE OWNER HAS
RECOVERED THE COST OF THE MAJOR CAPITAL IMPROVEMENT;
  (II) There has been since July  first,  nineteen  hundred  seventy,  a
major  capital  improvement [required for the operation, preservation or
maintenance of the structure. An adjustment under this subparagraph  (g)
shall  be  in  an amount sufficient to amortize the cost of the improve-
ments pursuant to this  subparagraph  (g)  over  a  seven-year  period];
PROVIDED  THAT  THE COMMISSIONER FINDS THAT SUCH IMPROVEMENTS ARE DEEMED
DEPRECIABLE UNDER THE INTERNAL REVENUE CODE AND  SUCH  IMPROVEMENTS  ARE
REQUIRED  FOR  THE  OPERATION, PRESERVATION OR MAINTENANCE OF THE STRUC-
TURE. THE INCREASE PERMITTED  FOR  SUCH  CAPITAL  IMPROVEMENT  SHALL  BE
COLLECTED  AS A MONTHLY SURCHARGE TO THE MAXIMUM RENT. IT SHALL BE SEPA-
RATELY DESIGNATED AND BILLED AS SUCH AND SHALL NOT BE COMPOUNDED BY  ANY
OTHER  ADJUSTMENT  TO  THE MAXIMUM RENT. THE SURCHARGE ALLOCABLE TO EACH
APARTMENT SHALL BE AN AMOUNT  EQUAL  TO  THE  COST  OF  THE  IMPROVEMENT
DIVIDED BY  EIGHTY-FOUR, DIVIDED BY THE NUMBER OF ROOMS IN THE BUILDING,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04488-01-5

S. 2830                             2

AND  THEN  MULTIPLIED BY THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED
THAT THE SURCHARGE ALLOCABLE TO ANY APARTMENT IN ANY ONE  YEAR  MAY  NOT
EXCEED  AN  AMOUNT EQUAL TO SIX PERCENT OF THE MONTHLY RENT COLLECTED BY
THE  OWNER  FOR  SUCH  APARTMENT  AS  SET FORTH IN THE SCHEDULE OF GROSS
RENTS.  ANY EXCESS ABOVE SAID SIX PERCENT SHALL BE CARRIED  FORWARD  AND
COLLECTED  IN FUTURE YEARS AS A FURTHER SURCHARGE NOT TO EXCEED AN ADDI-
TIONAL SIX PERCENT IN ANY ONE YEAR  PERIOD  UNTIL  THE  TOTAL  SURCHARGE
EQUALS  THE  AMOUNT IT WOULD HAVE BEEN IF THE AFOREMENTIONED SIX PERCENT
LIMITATION DID NOT APPLY; or
  S 2. 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.  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 sufficient to amortize the cost of the improve-
ments pursuant to this subparagraph over a seven-year    period]  IMPLE-
MENTED IN THE SAME MANNER AS SUCH MAJOR CAPITAL IMPROVEMENT AS A FURTHER
SURCHARGE TO THE MAXIMUM RENT.
  S 3. 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-
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].   Notwithstanding
anything to the contrary contained herein, no hardship increase  granted

S. 2830                             3

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
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 4. Subdivision c of section 26-511 of the administrative code of the
city of New York is amended by adding two new paragraphs 6-b and 6-c  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  CRITE-
RIA  SHALL  PROVIDE AS TO COMPLETED BUILDING-WIDE MAJOR CAPITAL IMPROVE-
MENTS, FOR A FINDING THAT SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER
THE INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS  ARE  REQUIRED  FOR  THE
OPERATION,  PRESERVATION  OR  MAINTENANCE OF THE STRUCTURE. THE INCREASE
PERMITTED FOR SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS  A  MONTHLY
SURCHARGE TO THE LEGAL REGULATED RENT. IT SHALL BE SEPARATELY DESIGNATED
AND  BILLED AS SUCH AND SHALL NOT BE COMPOUNDED BY ANY ANNUAL ADJUSTMENT
OF THE LEVEL OF FAIR RENT PROVIDED FOR UNDER SUBDIVISION  B  OF  SECTION
26-510  OF THIS LAW.  THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE
AN AMOUNT EQUAL TO THE COST OF THE IMPROVEMENT DIVIDED  BY  EIGHTY-FOUR,
DIVIDED  BY  THE NUMBER OF ROOMS IN THE BUILDING, AND THEN MULTIPLIED BY
THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
CABLE TO ANY APARTMENT, IN ANY ONE YEAR MAY NOT EXCEED AN  AMOUNT  EQUAL
TO  SIX  PERCENT  OF  THE  MONTHLY  RENT COLLECTED BY THE OWNER FOR SUCH
APARTMENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE
SAID SIX PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE  YEARS
AS  A  FURTHER  SURCHARGE NOT TO EXCEED AN ADDITIONAL SIX PERCENT IN ANY
ONE YEAR PERIOD UNTIL THE TOTAL SURCHARGE EQUALS  THE  AMOUNT  IT  WOULD
HAVE BEEN IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY.
  (6-C)  COLLECTION  OF  SURCHARGES  IN EXCESS OF THE LEVEL OF FAIR RENT
AUTHORIZED PURSUANT TO PARAGRAPH SIX-B OF THIS SUBDIVISION  SHALL  CEASE
WHEN THE OWNER HAS RECOVERED THE COST OF THE MAJOR CAPITAL IMPROVEMENT.
  S 5. 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:
  (3)  (I)  COLLECTION  OF SURCHARGES IN ADDITION TO THE LEGAL REGULATED
RENT AUTHORIZED PURSUANT TO SUBPARAGRAPH (II) OF  THIS  PARAGRAPH  SHALL
CEASE  WHEN  THE  OWNER  HAS  RECOVERED  THE  COST  OF THE MAJOR CAPITAL
IMPROVEMENT;

S. 2830                             4

  (II) 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 a seven-year period]; PROVIDED THAT THE
COMMISSIONER FINDS THAT SUCH IMPROVEMENTS ARE DEEMED  DEPRECIABLE  UNDER
THE  INTERNAL  REVENUE  CODE  AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE
OPERATION, PRESERVATION OR MAINTENANCE OF THE STRUCTURE.   THE  INCREASE
PERMITTED  FOR  SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS A MONTHLY
SURCHARGE TO THE LEGAL REGULATED RENT. IT SHALL BE SEPARATELY DESIGNATED
AND BILLED AS SUCH AND SHALL  NOT  BE  COMPOUNDED  BY  ANY  ANNUAL  RENT
ADJUSTMENT  AUTHORIZED  BY THE RENT GUIDELINES BOARD UNDER THIS ACT. THE
SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE AN AMOUNT  EQUAL  TO  THE
COST OF THE IMPROVEMENT DIVIDED BY EIGHTY-FOUR, DIVIDED BY THE NUMBER OF
ROOMS  IN  THE  BUILDING,  AND THEN MULTIPLIED BY THE NUMBER OF ROOMS IN
SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLOCABLE TO  ANY  APARTMENT
IN  ANY  ONE  YEAR  MAY NOT EXCEED AN AMOUNT EQUAL TO SIX PERCENT OF THE
MONTHLY RENT COLLECTED BY THE OWNER FOR SUCH APARTMENT AS SET  FORTH  IN
THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID SIX PERCENT SHALL BE
CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS A FURTHER SURCHARGE NOT
TO  EXCEED  AN  ADDITIONAL  SIX PERCENT IN ANY ONE YEAR PERIOD UNTIL THE
TOTAL SURCHARGE EQUALS THE AMOUNT IT WOULD HAVE BEEN  IF  THE  AFOREMEN-
TIONED SIX PERCENT LIMITATION DID NOT APPLY, or
  S 6. 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

S. 2830                             5

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
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)  (I)  COLLECTION   OF
SURCHARGES  TO THE MAXIMUM RENT AUTHORIZED PURSUANT TO ITEM (II) OF THIS
CLAUSE SHALL CEASE WHEN THE OWNER HAS RECOVERED THE COST  OF  THE  MAJOR
CAPITAL  IMPROVEMENT;  (II)  there  has been since March first, nineteen
hundred fifty, a major capital improvement [required for the  operation,
preservation or maintenance of the structure]; PROVIDED THAT THE COMMIS-
SIONER  FINDS  THAT  SUCH  IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER THE
INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE  OPERA-
TION, PRESERVATION OR MAINTENANCE OF THE STRUCTURE. THE INCREASE PERMIT-
TED  FOR  SUCH  CAPITAL  IMPROVEMENT  SHALL  BE  COLLECTED  AS A MONTHLY
SURCHARGE TO THE MAXIMUM RENT. IT SHALL  BE  SEPARATELY  DESIGNATED  AND

S. 2830                             6

BILLED  AS  SUCH  AND SHALL NOT BE COMPOUNDED BY ANY OTHER ADJUSTMENT TO
THE MAXIMUM RENT. THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE  AN
AMOUNT  EQUAL  TO  THE  COST OF THE IMPROVEMENT DIVIDED BY  EIGHTY-FOUR,
DIVIDED  BY  THE NUMBER OF ROOMS IN THE BUILDING, AND THEN MULTIPLIED BY
THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
CABLE TO ANY APARTMENT IN ANY ONE YEAR MAY NOT EXCEED AN AMOUNT EQUAL TO
SIX PERCENT OF THE MONTHLY RENT COLLECTED BY THE OWNER FOR  SUCH  APART-
MENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID
SIX  PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS A
FURTHER SURCHARGE NOT TO EXCEED AN ADDITIONAL SIX  PERCENT  IN  ANY  ONE
YEAR  PERIOD  UNTIL  THE TOTAL SURCHARGE EQUALS THE AMOUNT IT WOULD HAVE
BEEN IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY; 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.
  S 7. This act shall take effect immediately; provided that the  amend-
ments  to section 26-405 of the city rent and rehabilitation law made by
sections one and two 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 sections
three and 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
under section 26-520 of such law, as from  time  to  time  amended;  and
provided further that the amendment to section 6 of the emergency tenant
protection act of nineteen seventy-four made by section five 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 further provided
that the amendment to section 4 of the emergency  housing  rent  control
law  made  by  section  six 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

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2015-S2830A (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:: 2009-2010: S745
2011-2012: S523
2013-2014: S1493
2017-2018: S3190

2015-S2830A (ACTIVE) - Summary

2015-S2830A (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S2830A

 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 extending the
length of time over which major capital improvement expenses may be
recovered

 PURPOSE OR GENERAL IDEA OF THE BILL :

Expenses for major capital improvements in rental housing are
currently recovered over seven years in calculating the permissible
monthly rent increase. This bill codifies the MCI as a surcharge to
the legal regulated rent which is separately designated and billed as
such and mandates that the authorized surcharge for MCI's ceases after
the cost of the improvement is recouped.

 SUMMARY OF SPECIFIC PROVISIONS :

Establishes a methodology for determining MCI rent surcharges based on
seven years. MCI's are calculated as a rent surcharge and do not
become part of the base legal regulated rent by which rent increases
are calculated, and are separately designated and billed as such. The
legislation also codifies current practices regarding the annual 64

cap on MCI increases and the methodology for determining MCI
surcharges based on number of rooms. Furthermore, the bill would
require that the rent surcharges authorized for major capital
improvements cease when the cost of the improvement has been
recovered.

 JUSTIFICATION :

Since the actual cost of the improvement is recovered after seven
years of increased rent collection, this ruling means that tenants are
forced to continue to pay for improvements long after costs have been
fully recovered, and even after they have outlived their useful life.
In addition, most MCI's, such as window replacement or heating system
improvements, create energy savings that further increase the
profitability of MCI's. This bill seeks to balance the conflicting
concerns of maintaining affordable housing and insuring adequate
incentives for investment in MCI's in order to preserve and improve
our housing stock. Since the court permits MCI's to be collected in
perpetuity, landlords are allowed to recoup an amount well beyond
their actual costs and are ensured a reasonable return on their
investment.

 LEGISLATIVE HISTORY :

2009-2010: S.745-A/A.1928
2011-2012: S.523-A/A.24.59-A
2013-2014: S.1493

 FISCAL IMPACT :

None.

 EFFECTIVE DATE :
Immediately, with provisions.

2015-S2830A (ACTIVE) - Bill Text download pdf

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

                                 2830--A

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 29, 2015
                               ___________

Introduced  by  Sens. KRUEGER, AVELLA, HAMILTON, HASSELL-THOMPSON, HOYL-
  MAN, LATIMER, MONTGOMERY, PARKER, PERALTA, PERKINS, SERRANO, SQUADRON,
  STAVISKY, STEWART-COUSINS -- 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 extending the length of
  time over which major capital improvement expenses may be recovered

  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) (I) COLLECTION OF SURCHARGES TO THE MAXIMUM RENT AUTHORIZED PURSU-
ANT TO ITEM (II) OF THIS SUBPARAGRAPH SHALL CEASE  WHEN  THE  OWNER  HAS
RECOVERED THE COST OF THE MAJOR CAPITAL IMPROVEMENT;
  (II)  There  has  been  since  July first, nineteen hundred seventy, a
major capital improvement [required for the operation,  preservation  or
maintenance  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,];  PROVIDED  THAT
THE  COMMISSIONER  FINDS  THAT  SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE
UNDER THE INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS ARE  REQUIRED  FOR

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04488-02-6

S. 2830--A                          2

THE  OPERATION,  PRESERVATION  OR  MAINTENANCE  OF  THE  STRUCTURE.  THE
INCREASE PERMITTED FOR SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS  A
MONTHLY SURCHARGE TO THE MAXIMUM RENT. IT SHALL BE SEPARATELY DESIGNATED
AND  BILLED  AS SUCH AND SHALL NOT BE COMPOUNDED BY ANY OTHER ADJUSTMENT
TO THE MAXIMUM RENT. THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL  BE
AN  AMOUNT EQUAL TO THE COST OF THE IMPROVEMENT DIVIDED BY  EIGHTY-FOUR,
DIVIDED BY THE NUMBER OF ROOMS IN THE BUILDING, AND THEN  MULTIPLIED  BY
THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
CABLE TO ANY APARTMENT IN ANY ONE YEAR MAY NOT EXCEED AN AMOUNT EQUAL TO
SIX  PERCENT  OF THE MONTHLY RENT COLLECTED BY THE OWNER FOR SUCH APART-
MENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID
SIX PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS  A
FURTHER  SURCHARGE  NOT  TO  EXCEED AN ADDITIONAL SIX PERCENT IN ANY ONE
YEAR PERIOD UNTIL THE TOTAL SURCHARGE EQUALS THE AMOUNT  IT  WOULD  HAVE
BEEN IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY; or
  S  2.  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. 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 sufficient to amortize the cost of  the  improve-
ments  pursuant  to  this subparagraph over a seven-year  period] IMPLE-
MENTED IN THE SAME MANNER AS SUCH MAJOR CAPITAL IMPROVEMENT AS A FURTHER
SURCHARGE TO THE MAXIMUM RENT.
  S 3. 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-

S. 2830--A                          3

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].  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;
  S 4. Subdivision c of section 26-511 of the administrative code of the
city  of New York is amended by adding two new paragraphs 6-b and 6-c 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 CRITE-
RIA SHALL PROVIDE AS TO COMPLETED BUILDING-WIDE MAJOR  CAPITAL  IMPROVE-
MENTS, FOR A FINDING THAT SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER
THE  INTERNAL  REVENUE  CODE  AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE
OPERATION, PRESERVATION OR MAINTENANCE OF THE  STRUCTURE.  THE  INCREASE
PERMITTED  FOR  SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS A MONTHLY
SURCHARGE TO THE LEGAL REGULATED RENT. IT SHALL BE SEPARATELY DESIGNATED
AND BILLED AS SUCH AND SHALL NOT BE COMPOUNDED BY ANY ANNUAL  ADJUSTMENT
OF  THE  LEVEL  OF FAIR RENT PROVIDED FOR UNDER SUBDIVISION B OF SECTION
26-510 OF THIS LAW.  THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL  BE
AN  AMOUNT  EQUAL TO THE COST OF THE IMPROVEMENT DIVIDED BY EIGHTY-FOUR,
DIVIDED BY THE NUMBER OF ROOMS IN THE BUILDING, AND THEN  MULTIPLIED  BY
THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
CABLE  TO  ANY APARTMENT, IN ANY ONE YEAR MAY NOT EXCEED AN AMOUNT EQUAL
TO SIX PERCENT OF THE MONTHLY RENT  COLLECTED  BY  THE  OWNER  FOR  SUCH
APARTMENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE
SAID  SIX PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE YEARS
AS A FURTHER SURCHARGE NOT TO EXCEED AN ADDITIONAL SIX  PERCENT  IN  ANY
ONE  YEAR  PERIOD  UNTIL  THE TOTAL SURCHARGE EQUALS THE AMOUNT IT WOULD
HAVE BEEN IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY.

S. 2830--A                          4

  (6-C) COLLECTION OF SURCHARGES IN EXCESS OF THE  LEVEL  OF  FAIR  RENT
AUTHORIZED  PURSUANT  TO PARAGRAPH SIX-B OF THIS SUBDIVISION SHALL CEASE
WHEN THE OWNER HAS RECOVERED THE COST OF THE MAJOR CAPITAL IMPROVEMENT.
  S 5. 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)  (I)  COLLECTION  OF SURCHARGES IN ADDITION TO THE LEGAL REGULATED
RENT AUTHORIZED PURSUANT TO SUBPARAGRAPH (II) OF  THIS  PARAGRAPH  SHALL
CEASE  WHEN  THE  OWNER  HAS  RECOVERED  THE  COST  OF THE MAJOR CAPITAL
IMPROVEMENT;
  (II) 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,];  PROVIDED  THAT  THE
COMMISSIONER  FINDS  THAT SUCH IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER
THE INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS  ARE  REQUIRED  FOR  THE
OPERATION,  PRESERVATION  OR MAINTENANCE OF THE STRUCTURE.  THE INCREASE
PERMITTED FOR SUCH CAPITAL IMPROVEMENT SHALL BE COLLECTED AS  A  MONTHLY
SURCHARGE TO THE LEGAL REGULATED RENT. IT SHALL BE SEPARATELY DESIGNATED
AND  BILLED  AS  SUCH  AND  SHALL  NOT  BE COMPOUNDED BY ANY ANNUAL RENT
ADJUSTMENT AUTHORIZED BY THE RENT GUIDELINES BOARD UNDER THIS  ACT.  THE
SURCHARGE  ALLOCABLE  TO  EACH APARTMENT SHALL BE AN AMOUNT EQUAL TO THE
COST OF THE IMPROVEMENT DIVIDED BY EIGHTY-FOUR, DIVIDED BY THE NUMBER OF
ROOMS IN THE BUILDING, AND THEN MULTIPLIED BY THE  NUMBER  OF  ROOMS  IN
SUCH  APARTMENT;  PROVIDED THAT THE SURCHARGE ALLOCABLE TO ANY APARTMENT
IN ANY ONE YEAR MAY NOT EXCEED AN AMOUNT EQUAL TO  SIX  PERCENT  OF  THE
MONTHLY  RENT  COLLECTED BY THE OWNER FOR SUCH APARTMENT AS SET FORTH IN
THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID SIX PERCENT SHALL BE
CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS A FURTHER SURCHARGE NOT
TO EXCEED AN ADDITIONAL SIX PERCENT IN ANY ONE  YEAR  PERIOD  UNTIL  THE
TOTAL  SURCHARGE  EQUALS  THE AMOUNT IT WOULD HAVE BEEN IF THE AFOREMEN-
TIONED SIX PERCENT LIMITATION DID NOT APPLY, or
  S 6. 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

S. 2830--A                          5

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
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

S. 2830--A                          6

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)  (I)  COLLECTION  OF
SURCHARGES TO THE MAXIMUM RENT AUTHORIZED PURSUANT TO ITEM (II) OF  THIS
CLAUSE  SHALL  CEASE  WHEN THE OWNER HAS RECOVERED THE COST OF THE MAJOR
CAPITAL IMPROVEMENT; (II) 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 units,]; PROVIDED THAT  THE  COMMIS-
SIONER  FINDS  THAT  SUCH  IMPROVEMENTS ARE DEEMED DEPRECIABLE UNDER THE
INTERNAL REVENUE CODE AND SUCH IMPROVEMENTS ARE REQUIRED FOR THE  OPERA-
TION, PRESERVATION OR MAINTENANCE OF THE STRUCTURE. THE INCREASE PERMIT-
TED  FOR  SUCH  CAPITAL  IMPROVEMENT  SHALL  BE  COLLECTED  AS A MONTHLY
SURCHARGE TO THE MAXIMUM RENT. IT SHALL  BE  SEPARATELY  DESIGNATED  AND
BILLED  AS  SUCH  AND SHALL NOT BE COMPOUNDED BY ANY OTHER ADJUSTMENT TO
THE MAXIMUM RENT. THE SURCHARGE ALLOCABLE TO EACH APARTMENT SHALL BE  AN
AMOUNT  EQUAL  TO  THE  COST OF THE IMPROVEMENT DIVIDED BY  EIGHTY-FOUR,
DIVIDED BY THE NUMBER OF ROOMS IN THE BUILDING, AND THEN  MULTIPLIED  BY
THE NUMBER OF ROOMS IN SUCH APARTMENT; PROVIDED THAT THE SURCHARGE ALLO-
CABLE TO ANY APARTMENT IN ANY ONE YEAR MAY NOT EXCEED AN AMOUNT EQUAL TO
SIX  PERCENT  OF THE MONTHLY RENT COLLECTED BY THE OWNER FOR SUCH APART-
MENT AS SET FORTH IN THE SCHEDULE OF GROSS RENTS.  ANY EXCESS ABOVE SAID
SIX PERCENT SHALL BE CARRIED FORWARD AND COLLECTED IN FUTURE YEARS AS  A
FURTHER  SURCHARGE  NOT  TO  EXCEED AN ADDITIONAL SIX PERCENT IN ANY ONE
YEAR PERIOD UNTIL THE TOTAL SURCHARGE EQUALS THE AMOUNT  IT  WOULD  HAVE
BEEN  IF THE AFOREMENTIONED SIX PERCENT LIMITATION DID NOT APPLY; 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.
  S  7. This act shall take effect immediately; provided that the amend-
ments to section 26-405 of the city rent and rehabilitation law made  by
sections  one  and two 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

S. 2830--A                          7

rent stabilization law of nineteen hundred sixty-nine made  by  sections
three  and  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
under  section  26-520  of  such  law, as from time to time amended; and
provided further that the amendment to section 6 of the emergency tenant
protection act of nineteen seventy-four made by section five 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  further  provided
that  the  amendment  to section 4 of the emergency housing rent control
law made by section six 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 S2830A

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

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2015-S2830 - Details

2015-S2830 - Summary

2015-S2830 - Sponsor Memo

2015-S2830 - Bill Text download pdf

co-Sponsors

2015-S2830A (ACTIVE) - Details

2015-S2830A (ACTIVE) - Summary

2015-S2830A (ACTIVE) - Sponsor Memo

2015-S2830A (ACTIVE) - Bill Text download pdf

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