NY State Senate Bill 2019-S3437

Senate Bill S3437

2019-2020 Legislative Session

Relates to the adjustment of maximum allowable rent and requiring the division of housing and community renewal to confirm improvements have been made prior to the approval of rent increases

download bill text pdf

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
Jan 08, 2020	referred to housing, construction and community development
Feb 07, 2019	referred to housing, construction and community development

2019-S3437 (ACTIVE) - Details

See Assembly Version of this Bill:: A1959
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:: 2015-2016: A9324
2017-2018: A1067

2019-S3437 (ACTIVE) - Summary

Relates to the adjustment of maximum allowable rent and requires the division of housing and community renewal to confirm improvements have been made prior to the approval of rent increases.

2019-S3437 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3437

SPONSOR: MYRIE
 
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 the adjust-
ment of maximum allowable rent and requiring the division of housing and
community renewal to confirm improvements have been made prior to the
approval of rent increases

 
PURPOSE:

To hold building owners accountable to making improvements before
increasing rent. This bill will ensure the rights of tenants to live in
a safe dwelling.

 
SUMMARY OF PROVISIONS:

Section 1-4 amends administrative code of the city of New York stating
that an owner entitled to a rent increase shall only be entitles to such
increase for a period of five years from the date of the adjustment.

Before ordering any adjustment in rent 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 work and the date of completion. No increase shall be collectible
where the division or housing and community renewal has determined the
specified work has not been completed.

 
JUSTIFICATION:

Housing is a serious issue, and building owners have utilized the loop-
hole in this original provision to raise rent prices unfairly and have
reaped large profits from increasing rent unfairly. Whether that be
without making the necessary repairs to their building, or abusing the
fair rent increase provisions.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS:

 
EFFECTIVE DATE:
This act shall take effect immediately; provided that amendments to this
act shall expire on the same date as such law expires and shall not
affect the expiration of such law.

2019-S3437 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3437
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 7, 2019
                                ___________
 
 Introduced  by  Sen.  MYRIE  -- 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 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,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04447-01-9

 S. 3437                             2
 
 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
 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.
   §  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

 S. 3437                             3

 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;
   (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-

 S. 3437                             4
 
 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 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.
   §  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. 3437                             5
 
   § 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
 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
   § 5. This act shall take effect immediately; provided that:

 S. 3437                             6
 
   (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 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.

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