S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10006
 
                           I N  A S S E M B L Y
 
                                May 1, 2024
                                ___________
 
 Introduced  by M. of A. JACKSON -- read once and referred to the Commit-
   tee 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 tenant responses to
   applications for a major capital improvement rent increase

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  1  of  subdivision  g of section 26-405 of the
 administrative code of the city of New York is amended by adding  a  new
 subparagraph (g-1) to read as follows:
   (G-1)  WHERE  AN  APPLICATION  FOR  A  MAJOR  CAPITAL IMPROVEMENT RENT
 INCREASE HAS BEEN FILED, A TENANT SHALL HAVE  ONE  HUNDRED  TWENTY  DAYS
 FROM  THE DATE OF MAILING OF A NOTICE OF A PROCEEDING IN WHICH TO ANSWER
 OR REPLY. THE CITY RENT AGENCY SHALL PROVIDE ANY RESPONDING TENANT  WITH
 THE REASONS FOR THE CITY RENT AGENCY'S APPROVAL OR DENIAL OF SUCH APPLI-
 CATION; OR
   § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
 tive  code  of the city of New York, as separately amended by section 12
 of part K of chapter 36 and section 28 of part Q of chapter  39  of  the
 laws of 2019, 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10017-01-3
 A. 10006                            2
 
 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 twelve-year period for a building with thir-
 ty-five or fewer housing accommodations, or a twelve  and  one-half-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 the chapter of the laws  of  two
 thousand  nineteen that amended this paragraph and shall be removed from
 the legal regulated rent thirty years from the date the increase  became
 effective  inclusive  of  any  increases  granted by the applicable rent
 guidelines board. Temporary major capital improvement increases shall be
 collectible prospectively on the first day of the first month  beginning
 sixty  days  from  the date of mailing notice of approval to the tenant.
 Such notice shall disclose the total monthly increase in  rent  and  the
 first  month  in which the tenant would be required to pay the temporary
 increase. An approval for a temporary major capital improvement increase
 shall not include retroactive payments. The collection of  any  increase
 shall  not exceed two 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 rent as  estab-
 lished  or  set in future years.  Upon vacancy, the landlord may add any
 remaining balance of the temporary major capital improvement increase to
 the legal regulated rent. Notwithstanding any  other  provision  of  the
 law,  for  any  renewal  lease commencing on or after June 14, 2019, the
 collection of any rent increases due to any major  capital  improvements
 approved  on  or  after June 16, 2012 and before June 16, 2019 shall not
 exceed two percent in any year for any tenant in occupancy on  the  date
 the  major  capital improvement was approved or based upon cash purchase
 price exclusive of interest or service charges. Where an application for
 a temporary major capital improvement increase has been filed, a  tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing  in  which  to  answer  or  reply. The state division of housing and
 community renewal shall provide any responding tenant with  the  reasons
 for  the  division's  approval  or denial of such application.  WHERE AN
 APPLICATION FOR A MAJOR  CAPITAL  IMPROVEMENT  RENT  INCREASE  HAS  BEEN
 FILED,  A  TENANT  SHALL  HAVE  ONE HUNDRED TWENTY DAYS FROM THE DATE OF
 MAILING OF A NOTICE OF A PROCEEDING IN WHICH TO  ANSWER  OR  REPLY.  THE
 STATE  DIVISION  OF  HOUSING  AND  COMMUNITY  RENEWAL  SHALL PROVIDE ANY
 RESPONDING TENANT WITH THE REASONS FOR THE DIVISION'S APPROVAL OR DENIAL
 OF SUCH APPLICATION. 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  management services as determined by the commissioner, (iii) actual
 annual mortgage debt service (interest and amortization) on its  indebt-
 A. 10006                            3
 
 edness 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 mort-
 gage 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;
   §  3.  Subdivision  d  of section 6 of section 4 of chapter 576 of the
 laws of 1974, constituting the emergency tenant protection act of  nine-
 teen seventy-four, is amended by adding a new paragraph (3-b) to read as
 follows:
   (3-B) AN APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE HAS
 BEEN FILED, A TENANT SHALL HAVE ONE HUNDRED TWENTY DAYS FROM THE DATE OF
 MAILING  OF  A  NOTICE  OF A PROCEEDING IN WHICH TO ANSWER OR REPLY. THE
 STATE DIVISION OF  HOUSING  AND  COMMUNITY  RENEWAL  SHALL  PROVIDE  ANY
 RESPONDING TENANT WITH THE REASONS FOR THE DIVISION'S APPROVAL OR DENIAL
 OF SUCH APPLICATION; OR
   §  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 separately
 amended by section 25 of part Q of chapter 39 and section 14 of  part  K
 of chapter 36 of the laws of 2019, is amended to read as follows:
   (7)  there has been since March first, nineteen hundred fifty, a major
 capital improvement essential for the preservation,  energy  efficiency,
 functionality,  or infrastructure of the entire building, improvement of
 the structure including heating,  windows,  plumbing  and  roofing,  but
 shall not be for operational costs or unnecessary cosmetic improvements;
 which  for any order of the commissioner issued after the effective date
 of the chapter of the laws of two thousand nineteen  that  amended  this
 paragraph the cost of such improvement shall be amortized over a twelve-
 year  period  for  buildings with thirty-five or fewer units or a twelve
 and one-half year period for buildings with more than thirty-five units,
 and shall be removed from the legal regulated rent thirty years from the
 date the increase became effective inclusive of any increases granted by
 the applicable rent guidelines board. Temporary major  capital  improve-
 ment  increases  shall  be collectible prospectively on the first day of
 the first month beginning sixty days from the date of mailing notice  of
 approval  to  the  tenant.  Such notice shall disclose the total monthly
 increase in rent and the first  month  in  which  the  tenant  would  be
 required  to  pay  the  temporary  increase. An approval for a temporary
 major  capital  improvement  increase  shall  not  include   retroactive
 payments. The collection of any increase shall not exceed two 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 rent as established or set in future years.
 Upon vacancy, the landlord may add any remaining balance of  the  tempo-
 rary  major  capital  improvement  increase to the legal regulated rent.
 Notwithstanding any other provision of the law, for  any  renewal  lease
 A. 10006                            4
 
 commencing  on  or  after  June  14,  2019,  the  collection of any rent
 increases due to any major capital improvements  approved  on  or  after
 June  16,  2012 and before June 16, 2019 shall not exceed two percent in
 any  year  for  any  tenant  in  occupancy on the date the major capital
 improvement was approved; provided, however, where an application for  a
 temporary  major  capital  improvement increase has been filed, a tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing in which to answer or reply.  The  state  division  of  housing  and
 community  renewal  shall provide any responding tenant with the reasons
 for the division's approval or denial  of  such  application;  PROVIDED,
 HOWEVER,  WHERE  AN  APPLICATION  FOR  A  MAJOR CAPITAL IMPROVEMENT RENT
 INCREASE HAS BEEN FILED, A TENANT SHALL HAVE  ONE  HUNDRED  TWENTY  DAYS
 FROM  THE DATE OF MAILING OF A NOTICE OF A PROCEEDING IN WHICH TO ANSWER
 OR REPLY. THE STATE DIVISION OF  HOUSING  AND  COMMUNITY  RENEWAL  SHALL
 PROVIDE  ANY  RESPONDING  TENANT  WITH  THE  REASONS  FOR THE DIVISION'S
 APPROVAL OR DENIAL OF SUCH APPLICATION; or
   § 5. This act shall take effect on the ninetieth day  after  it  shall
 have become a law; 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; and
   (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.