S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6852
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2023
                                ___________
 
 Introduced by Sens. PARKER, SEPULVEDA -- 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 and  the
   emergency  tenant protection act of nineteen seventy-four, in relation
   to inspection of major capital improvements for which  rent  increases
   are  requested and in relation to extending the provisions of the rent
   stabilization law
 
   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  27 of part Q chapter 39 of the laws of 2019, is amended to read
 as follows:
   (g) There has been since July first, nineteen hundred seventy, 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.  The
 temporary  increase  based  upon  a major capital improvement under this
 subparagraph for any order of the commissioner issued after [the  effec-
 tive  date  of  the  chapter  of  the laws of two thousand nineteen that
 amended this subparagraph] JUNE 14, 2014 shall be in  an  amount  suffi-
 cient to amortize the cost of the improvements pursuant to this subpara-
 graph  [(g)] 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. Tempo-
 rary major capital improvement increases shall be  collectible  prospec-
 tively on the first day of the first month beginning sixty days from the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07976-01-3
              

 S. 6852                             2
 
 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 temporary major capital improvement increase to the legal
 regulated rent.  NO LANDLORD SHALL DENY ACCESS TO A  PROFESSIONAL  ENGI-
 NEER  LICENSED  TO  PRACTICE  IN  THE  STATE OF NEW YORK OR A REGISTERED
 ARCHITECT LICENSED TO PRACTICE IN THE STATE OF NEW  YORK  HIRED  BY  ANY
 TENANT, TENANTS OR TENANT ASSOCIATION REPRESENTING TENANTS OF A MULTIPLE
 DWELLING  OF  SIX  UNITS  OR  MORE  FOR  THE  PURPOSE  OF  CONDUCTING AN
 INSPECTION OF A MAJOR CAPITAL IMPROVEMENT FOR WHICH AN  APPLICATION  FOR
 ADJUSTMENT  OF  MAXIMUM  RENT  HAS  BEEN FILED. SUCH INSPECTION SHALL BE
 CONDUCTED AFTER NOTICE TO THE LANDLORD AND DURING NORMAL BUSINESS HOURS.
 SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION  WITH  THE  CITY  RENT
 AGENCY  FOR  CONSIDERATION  IN  THE  DETERMINATION  OF SUCH APPLICATION.
 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
   § 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
 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. 6852                             3
 
 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] JUNE 14, 2019 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 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.  NO
 LANDLORD  SHALL DENY ACCESS TO A PROFESSIONAL ENGINEER LICENSED TO PRAC-
 TICE IN THE STATE OF NEW YORK OR  A  REGISTERED  ARCHITECT  LICENSED  TO
 PRACTICE IN THE STATE OF NEW YORK HIRED BY ANY TENANT, TENANTS OR TENANT
 ASSOCIATION  REPRESENTING TENANTS OF A MULTIPLE DWELLING OF SIX UNITS OR
 MORE FOR THE PURPOSE OF CONDUCTING AN  INSPECTION  OF  A  MAJOR  CAPITAL
 IMPROVEMENT  FOR WHICH AN APPLICATION FOR ADJUSTMENT OF MAXIMUM RENT HAS
 BEEN FILED. SUCH INSPECTION SHALL BE CONDUCTED AFTER NOTICE TO THE LAND-
 LORD AND DURING NORMAL BUSINESS HOURS. SUCH TENANT MAY FILE  THE  REPORT
 OF  THE  INSPECTION  WITH  THE CITY RENT AGENCY FOR CONSIDERATION IN THE
 DETERMINATION OF SUCH APPLICATION. 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  improve-
 ments  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 appli-
 cation 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 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  applica-
 tion.  Notwithstanding  anything  to  the  contrary contained herein, no
 hardship increase granted pursuant to this paragraph shall,  when  added
 to the annual gross rents, as determined by the commissioner, exceed the
 sum of, (i) the annual operating expenses, (ii) an allowance for manage-
 ment  services  as  determined  by the commissioner, (iii) actual annual
 mortgage debt service (interest and amortization) on its indebtedness to
 a lending institution,  an  insurance  company,  a  retirement  fund  or
 welfare  fund  which is operated under the supervision of the banking or
 insurance laws of the state of New York or the United States,  and  (iv)
 eight  and  one-half percent of that portion of the fair market value of
 the property which exceeds the unpaid principal amount of  the  mortgage
 indebtedness  referred  to in subparagraph (iii) of this paragraph. Fair
 market value for the purposes of this paragraph shall be six  times  the
 S. 6852                             4
 
 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. 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  26  of  part  Q  of
 chapter 39 of the laws of 2019, is amended to read as follows:
   (3)  there has been since January first, nineteen hundred seventy-four
 a major capital improvement essential for the preservation, energy effi-
 ciency,  functionality,  or  infrastructure  of  the  entire   building,
 improvement  of  the  structure including heating, windows, plumbing and
 roofing, but shall not be for operation costs  or  unnecessary  cosmetic
 improvements.  An  adjustment under this paragraph shall be in an amount
 sufficient to amortize the cost of the  improvements  pursuant  to  this
 paragraph  over  a twelve-year period for a building with thirty-five or
 fewer housing accommodations, or a twelve  and  one-half  period  for  a
 building  with more than thirty-five housing accommodations 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, for any determination  issued  by  the
 division  of  housing and community renewal after [the effective date of
 the chapter of the laws of two thousand nineteen that amended this para-
 graph] JUNE 14, 2019.  Temporary  major  capital  improvement  increases
 shall  be  collectable 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 improve-
 ment 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 temporary major capital improvement
 increase  to the legal regulated rent.  NO LANDLORD SHALL DENY ACCESS TO
 A PROFESSIONAL ENGINEER LICENSED TO PRACTICE IN THE STATE OF NEW YORK OR
 A REGISTERED ARCHITECT LICENSED TO PRACTICE IN THE  STATE  OF  NEW  YORK
 HIRED  BY ANY TENANT, TENANTS OR TENANT ASSOCIATION REPRESENTING TENANTS
 OF A MULTIPLE DWELLING OF SIX UNITS OR MORE FOR THE PURPOSE OF  CONDUCT-
 ING  AN  INSPECTION OF A MAJOR CAPITAL IMPROVEMENT FOR WHICH AN APPLICA-
 TION FOR ADJUSTMENT OF MAXIMUM RENT  HAS  BEEN  FILED.  SUCH  INSPECTION
 SHALL  BE CONDUCTED AFTER NOTICE TO THE LANDLORD AND DURING NORMAL BUSI-
 NESS HOURS. SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION  WITH  THE
 CITY RENT AGENCY FOR CONSIDERATION IN THE DETERMINATION OF SUCH APPLICA-
 TION.  Notwithstanding any other provision of the law, the collection of
 any rent increases for any renewal lease commencing on or after June 14,
 2019, 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  improve-
 ment was approved, or
 S. 6852                             5
 
   § 4. This act shall take effect on the one hundred twentieth day after
 it  shall  have  become  a  law, provided that the amendments to section
 26-405 of the city rent and rehabilitation law made by  section  one  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 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.    Effective
 immediately, the addition, amendment and/or repeal of any rule and regu-
 lation  necessary  for  the  implementation of this act on its effective
 date are authorized to be made on or before such date.