S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2107--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 17, 2017
                                ___________
 
 Introduced by M. of A. MAYER, WRIGHT, ABINANTI, COLTON, GOTTFRIED, HOOP-
   ER,  JAFFEE,  KAVANAGH,  O'DONNELL,  PRETLOW,  RIVERA, ROZIC, SOLAGES,
   ARROYO, MOSLEY, PICHARDO, DE LA ROSA, WALKER -- Multi-Sponsored by  --
   M.  of  A.  BUCHWALD,  HEVESI,  SIMON -- read once and referred to the
   Committee on Housing -- reported and  referred  to  the  Committee  on
   Codes  --  committee  discharged,  bill  amended, ordered reprinted as
   amended and recommitted to said committee
 
 AN ACT to amend chapter 576 of the laws of 1974 constituting  the  emer-
   gency  tenant protection act of nineteen seventy-four, the administra-
   tive code of the city of New  York  and  the  emergency  housing  rent
   control law, in relation to prohibiting the collection of rent arrear-
   ages  accruing  prior to the date of approval of an application for an
   adjustment in the legal regulated rent  based  upon  a  major  capital
   improvement
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 6 of section 4 of chapter 576 of the laws  of  1974
 constituting  the  emergency  tenant protection act of nineteen seventy-
 four is amended by adding a new subdivision h to read as follows:
   H. NOTWITHSTANDING ANY PROVISION OF LAW OR RULE OR REGULATION  TO  THE
 CONTRARY,  ANY ADJUSTMENT IN THE LEGAL REGULATED RENT BASED UPON A MAJOR
 CAPITAL IMPROVEMENT SHALL BE EFFECTIVE UPON APPROVAL OF THE  APPLICATION
 THEREFOR.  NO  INCREASE MAY BE COLLECTED FOR THE PERIOD OF TIME PRIOR TO
 THE DATE OF APPROVAL OF THE APPLICATION.
   § 2. Section 26-512 of the administrative code of the city of New York
 is amended by adding a new subdivision g to read as follows:
   G. NOTWITHSTANDING ANY PROVISION OF LAW OR RULE OR REGULATION  TO  THE
 CONTRARY,  ANY ADJUSTMENT IN THE LEGAL REGULATED RENT BASED UPON A MAJOR
 CAPITAL IMPROVEMENT SHALL BE EFFECTIVE UPON APPROVAL OF THE  APPLICATION
 THEREFOR.  NO  INCREASE MAY BE COLLECTED FOR THE PERIOD OF TIME PRIOR TO
 THE DATE OF APPROVAL OF THE APPLICATION.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02497-04-7

 A. 2107--A                          2
 
   § 3.  The second undesignated paragraph of paragraph (a)  of  subdivi-
 sion 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 valu-
 ation 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 proper-
 ty,  excluding  mortgage interest and amortization, and excluding allow-
 ances for obsolescence 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  build-
 ings  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 compensated by increases in rental income sufficient to
 offset unavoidable increases in property taxes, fuel, utilities,  insur-
 ance  and repairs and maintenance, excluding mortgage interest and amor-
 tization, 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 exclud-
 ing  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 housing 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  land-
 lord  and  tenant  by  mutual  voluntary  written  agreement  agree to a
 substantial increase or decrease in dwelling space or a  change  in  the

 A. 2107--A                          3
 
 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 furniture or furnishings provided in or
 to a tenant's housing accommodation. The permanent increase in the maxi-
 mum rent for the affected housing accommodation shall  be  one-fortieth,
 in  the  case  of  a building with thirty-five or fewer housing accommo-
 dations, or one-sixtieth, in the case of a building with more than thir-
 ty-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 equip-
 ment, including the cost of installation, but excluding finance  charges
 provided further that an owner who is entitled to a rent increase pursu-
 ant  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 furni-
 ture or furnishings. The owner shall give written notice to the  commis-
 sion  of  any  such adjustment pursuant to this clause; or (6) there has
 been, since March first, nineteen hundred  fifty,  an  increase  in  the
 rental  value of the housing accommodations as a result of a substantial
 rehabilitation of the building 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  capi-
 tal  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 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;  OR  (11)
 NOTWITHSTANDING  ANY  PROVISION  OF  LAW  OR  RULE  OR REGULATION TO THE
 CONTRARY, ANY ADJUSTMENT IN THE LEGAL REGULATED RENT BASED UPON A  MAJOR
 CAPITAL  IMPROVEMENT SHALL BE EFFECTIVE UPON APPROVAL OF THE APPLICATION
 THEREFOR. NO INCREASE MAY BE COLLECTED FOR THE PERIOD OF TIME  PRIOR  TO
 THE DATE OF APPROVAL OF THE APPLICATION.
   § 4. Paragraph 1 of subdivision g of section 26-405 of the administra-
 tive  code  of  the city of New York is amended by adding a new subpara-
 graph (p) to read as follows:

 A. 2107--A                          4

   (P) NOTWITHSTANDING ANY PROVISION OF LAW OR RULE OR REGULATION TO  THE
 CONTRARY,  ANY ADJUSTMENT IN THE LEGAL REGULATED RENT BASED UPON A MAJOR
 CAPITAL IMPROVEMENT SHALL BE EFFECTIVE UPON APPROVAL OF THE  APPLICATION
 THEREFOR.  NO  INCREASE MAY BE COLLECTED FOR THE PERIOD OF TIME PRIOR TO
 THE DATE OF APPROVAL OF THE APPLICATION.
   § 5. This act shall take effect immediately; provided that:
   a.  the amendments to section 4 of the emergency tenant protection act
 of nineteen seventy-four made by section one 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;
   b. the amendments to section 26-512 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 4 of the emergency housing  rent  control
 law  made  by section three 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; and
   d. the amendments to section 26-405 of the  city  rent  and  rehabili-
 tation  law  made by section four 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.