Bill Text: NY A01067 | 2017-2018 | General Assembly | Introduced

---

Bill Title: 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.

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced - Dead) 2018-01-03 - referred to housing [A01067 Detail]

Download: New_York-2017-A01067-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________
                                          1067
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                    January 10, 2017
                                       ___________
        Introduced  by  M.  of  A.  RICHARDSON  -- read once and referred to the
          Committee 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 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:
     1    Section  1.  Subparagraphs (e) and (g) of paragraph 1 of subdivision g
     2  of section 26-405 of the administrative code of the city  of  New  York,
     3  subparagraph (e) as amended by section 15 of part B of chapter 97 of the
     4  laws  of 2011 and subparagraph (g) as amended by section 31 of part A of
     5  chapter 20 of the laws of 2015, are amended and a  new  paragraph  8  is
     6  added to read as follows:
     7    (e)  The  landlord  and  tenant  by mutual voluntary written agreement
     8  agree to a substantial increase or  decrease  in  dwelling  space  or  a
     9  change  in the services, furniture, furnishings or equipment provided in
    10  the housing accommodations. An adjustment under this subparagraph  shall
    11  be  equal to one-fortieth, in the case of a building with thirty-five or
    12  fewer housing accommodations, or one-sixtieth, in the case of a building
    13  with more than thirty-five housing accommodations where such  adjustment
    14  takes  effect  on or after September twenty-fourth, two thousand eleven,
    15  of the total cost incurred by the landlord in providing  such  modifica-
    16  tion  or increase in dwelling space, services, furniture, furnishings or
    17  equipment, including the cost of  installation,  but  excluding  finance
    18  charges,  provided  further  that  an  owner  who  is entitled to a rent
    19  increase pursuant to this  subparagraph  shall  not  be  entitled  to  a
    20  further  rent increase based upon the installation of similar equipment,
    21  or new furniture or furnishings within  the  useful  life  of  such  new
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05588-01-7
        A. 1067                             2
     1  equipment,  or new furniture or furnishings. An owner entitled to a rent
     2  increase pursuant to this subparagraph shall only be  entitled  to  such
     3  increase for a period of five years from the date of the adjustment. The
     4  owner  shall  give  written  notice  to the city rent agency of any such
     5  adjustment pursuant to this subparagraph; or
     6    (g) There has been since July first, nineteen hundred seventy, a major
     7  capital improvement required for the operation, preservation or  mainte-
     8  nance  of  the structure. An adjustment under this subparagraph [(g) for
     9  any order of the commissioner issued after the  effective  date  of  the
    10  rent  act  of 2015 shall be in an amount sufficient to amortize the cost
    11  of the improvements pursuant to this subparagraph (g) over an eight-year
    12  period for buildings with thirty-five or fewer  units  or  a  nine  year
    13  period  for  buildings with more than thiry-five units] shall only be in
    14  effect for a period of five years from the date of such adjustment, or
    15    (8) Before ordering any adjustment in rent pursuant  to  subparagraphs
    16  (e)  and (g) of paragraph one of this subdivision, the division of hous-
    17  ing and community renewal shall require the owner  of  the  property  to
    18  file  a statement with the division containing information outlining the
    19  scope of the work and the date of completion of such work. Upon  receipt
    20  of  such  statement, the division of housing and community renewal shall
    21  inspect the property to ensure the specified work has been completed. No
    22  increase shall be collectible under subparagraphs (e) and (g)  of  para-
    23  graph one of this subdivision where the division of housing and communi-
    24  ty renewal has determined the specified work has not been completed.
    25    §  2.  Paragraphs  6  and 13 of subdivision c of section 26-511 of the
    26  administrative code of the city of New York, paragraph 6 as  amended  by
    27  section  29 of part A of chapter 20 of the laws of 2015 and paragraph 13
    28  as amended by section 16 of part B of chapter 97 of the  laws  of  2011,
    29  are  amended  and  two  new  paragraphs  6-b and 15 are added to read as
    30  follows:
    31    (6) provides criteria whereby the commissioner may act  upon  applica-
    32  tions  by  owners  for  increases  in  excess  of the level of fair rent
    33  increase established under this law provided, however, that such  crite-
    34  ria  shall provide [(a)] as to hardship applications, for a finding that
    35  the level of fair rent increase is not sufficient to enable the owner to
    36  maintain approximately the same average annual net income  (which  shall
    37  be  computed  without regard to debt service, financing costs or manage-
    38  ment fees) for the three year period ending on or within six  months  of
    39  the  date  of  an application pursuant to such criteria as compared with
    40  annual net income, which prevailed on the average over the period  nine-
    41  teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
    42  first three years of operation if the building was completed since nine-
    43  teen hundred sixty-eight or for the first three  fiscal  years  after  a
    44  transfer of title to a new owner provided the new owner can establish to
    45  the  satisfaction  of  the commissioner that he or she acquired title to
    46  the building as a result of a bona fide sale of the entire building  and
    47  that  the new owner is unable to obtain requisite records for the fiscal
    48  years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
    49  despite  diligent  efforts to obtain same from predecessors in title and
    50  further provided that the new owner can provide financial data  covering
    51  a  minimum  of  six  years under his or her continuous and uninterrupted
    52  operation of the building to meet the three year to three  year  compar-
    53  ative  test  periods herein provided[; and (b) as to completed building-
    54  wide major capital improvements, for a finding  that  such  improvements
    55  are deemed depreciable under the Internal Revenue Code and that the cost
    56  is  to  be amortized over an eight-year period for a building with thir-
        A. 1067                             3

     1  ty-five or fewer housing accommodations, or a  nine-year  period  for  a
     2  building  with  more  than  thirty-five  housing accommodations, for any
     3  determination issued by the division of housing  and  community  renewal
     4  after  the  effective  date  of  the  rent  act of 2015, based upon cash
     5  purchase price exclusive of interest or service charges].  Notwithstand-
     6  ing anything to the contrary  contained  herein,  no  hardship  increase
     7  granted pursuant to this paragraph shall, when added to the annual gross
     8  rents,  as  determined  by  the commissioner, exceed the sum of, (i) the
     9  annual operating expenses, (ii) an allowance for management services  as
    10  determined  by  the  commissioner,  (iii)  actual  annual  mortgage debt
    11  service (interest and amortization) on its  indebtedness  to  a  lending
    12  institution,  an  insurance  company,  a retirement fund or welfare fund
    13  which is operated under the supervision of the banking or insurance laws
    14  of the state of New York or the United States, and (iv) eight  and  one-
    15  half  percent  of  that portion of the fair market value of the property
    16  which exceeds the unpaid principal amount of the  mortgage  indebtedness
    17  referred  to  in subparagraph (iii) of this paragraph. Fair market value
    18  for the purposes of this paragraph shall be six times the  annual  gross
    19  rent.  The  collection  of  any  increase in the stabilized rent for any
    20  apartment pursuant to this paragraph shall not exceed six percent in any
    21  year from the effective date of the order granting the increase over the
    22  rent set forth in the schedule of gross rents,  with  collectability  of
    23  any  dollar excess above said sum to be spread forward in similar incre-
    24  ments and added to the stabilized rent as established or set  in  future
    25  years;
    26    (6-b) provides criteria whereby the commissioner may act upon applica-
    27  tion  by  owners  for  increases  in  excess  of  the level of fair rent
    28  increase established under  this  law  provided,  however,  that  as  to
    29  completed  building-wide major capital improvements, an owner shall only
    30  be entitled to a rent increase for a five year period from the  date  of
    31  the approved increase.
    32    (13) provides that an owner is entitled to a rent increase where there
    33  has  been a substantial modification or increase of dwelling space or an
    34  increase in the services, or installation of new equipment  or  improve-
    35  ments or new furniture or furnishings provided in or to a tenant's hous-
    36  ing  accommodation,  on  written tenant consent to the rent increase. In
    37  the case of a vacant housing accommodation, tenant consent shall not  be
    38  required.  The  [permanent] increase in the legal regulated rent for the
    39  affected housing accommodation shall be one-fortieth, in the case  of  a
    40  building with thirty-five or fewer housing accommodations, or one-sixti-
    41  eth, in the case of a building with more than thirty-five housing accom-
    42  modations  where  such  [permanent]  increase  takes  effect on or after
    43  September twenty-fourth, two thousand eleven, of the total cost incurred
    44  by the landlord in providing such modification or increase  in  dwelling
    45  space, services, furniture, furnishings or equipment, including the cost
    46  of  installation,  but excluding finance charges; provided, however, the
    47  increase allowable under this paragraph shall only be in  effect  for  a
    48  period  of  five  years from the date of such increase. Provided further
    49  that an owner who is entitled to a rent increase pursuant to this  para-
    50  graph  shall  not  be entitled to a further rent increase based upon the
    51  installation of similar equipment, or new furniture or furnishings with-
    52  in  the  useful  life  of  such  new  equipment,  or  new  furniture  or
    53  furnishings.
    54    (15)  provides that before ordering any adjustment in rent pursuant to
    55  paragraphs six-b and thirteen of this subdivision, the division of hous-
    56  ing and community renewal shall require the owner  of  the  property  to
        A. 1067                             4
     1  file  a statement with the division containing information outlining the
     2  scope of the work and the date of completion of such work. Upon  receipt
     3  of  such  statement, the division of housing and community renewal shall
     4  inspect the property to ensure the specified work has been completed. No
     5  increase  shall  be  collectible  under paragraphs six-b and thirteen of
     6  this subdivision where the division of housing and community renewal has
     7  determined the specified work has not been completed.
     8    § 3. Paragraphs 1 and 3 of subdivision d of section 6 of section 4  of
     9  chapter  576  of  the  laws  of  1974, constituting the emergency tenant
    10  protection act of nineteen  seventy-four,  paragraph  1  as  amended  by
    11  section  18  of part B of chapter 97 of the laws of 2011 and paragraph 3
    12  as amended by section 30 of part A of chapter 20 of the  laws  of  2015,
    13  are amended and a new paragraph 6 is added to read as follows:
    14    (1)  there has been a substantial modification or increase of dwelling
    15  space or an increase in the services, or installation of  new  equipment
    16  or  improvements  or  new  furniture or furnishings, provided in or to a
    17  tenant's housing accommodation, on written tenant consent  to  the  rent
    18  increase.  In the case of a vacant housing accommodation, tenant consent
    19  shall not be required. The [permanent] increase in the  legal  regulated
    20  rent  for  the  affected housing accommodation shall be one-fortieth, in
    21  the case of a building with thirty-five or fewer housing accommodations,
    22  or one-sixtieth, in the case of a building with  more  than  thirty-five
    23  housing  accommodations  where such [permanent] increase takes effect on
    24  or after September twenty-fourth, two thousand eleven, of the total cost
    25  incurred by the landlord in providing such modification or  increase  in
    26  dwelling space, services, furniture, furnishings or equipment, including
    27  the  cost  of  installation,  but  excluding  finance charges; provided,
    28  however, the increase allowable under this paragraph shall  only  be  in
    29  effect  for  a  period  of  five  years  from the date of such increase.
    30  Provided further that an owner who is entitled to a rent increase pursu-
    31  ant to this paragraph shall not be entitled to a further  rent  increase
    32  based  upon  the  installation of similar equipment, or new furniture or
    33  furnishings within the useful life of such new equipment, or new  furni-
    34  ture or furnishings.
    35    (3)  there has been since January first, nineteen hundred seventy-four
    36  a major capital improvement required for the operation, preservation  or
    37  maintenance  of  the structure. An adjustment under this paragraph shall
    38  [be in an amount sufficient to amortize the  cost  of  the  improvements
    39  pursuant to this paragraph over an eight-year period for a building with
    40  thirty-five or fewer housing accommodations, or a nine-year period for a
    41  building  with  more  than  thirty-five  housing accommodations, for any
    42  determination issued by the division of housing  and  community  renewal
    43  after  the effective date of the rent act of 2015] only be in effect for
    44  a period of five years from the date of such adjustment, or
    45    (6) Before ordering any adjustment in rent pursuant to paragraphs  one
    46  and  three  of  this  subdivision, the division of housing and community
    47  renewal shall require the owner of the property to file a statement with
    48  the division containing information outlining the scope of the work  and
    49  the date of completion of such work. Upon receipt of such statement, the
    50  division  of housing and community renewal shall inspect the property to
    51  ensure the specified work has  been  completed.  No  increase  shall  be
    52  collectible under paragraphs one and three of this subdivision where the
    53  division  of  housing and community renewal has determined the specified
    54  work has not been completed.
    55    § 4. Clauses 5 and 7 of the second undesignated paragraph of paragraph
    56  (a) of subdivision 4 of section 4 of chapter 274 of the  laws  of  1946,
        A. 1067                             5
     1  constituting the emergency housing rent control law, clause 5 as amended
     2  by  section  25 of part B of chapter 97 of the laws of 2011 and clause 7
     3  as amended by section 32 of part A of chapter 20 of the  laws  of  2015,
     4  are amended to read as follows:
     5    (5)  the  landlord  and  tenant  by mutual voluntary written agreement
     6  agree to a substantial increase or  decrease  in  dwelling  space  or  a
     7  change  in the services, furniture, furnishings or equipment provided in
     8  the housing accommodations; provided that an owner shall be entitled  to
     9  a  rent  increase  where  there  has  been a substantial modification or
    10  increase of dwelling space or an increase in the services, or  installa-
    11  tion  of  new  equipment or improvements or new furniture or furnishings
    12  provided in or to a  tenant's  housing  accommodation.  The  [permanent]
    13  increase  in  the  maximum  rent  for the affected housing accommodation
    14  shall be one-fortieth, in the case of a  building  with  thirty-five  or
    15  fewer housing accommodations, or one-sixtieth, in the case of a building
    16  with more than thirty-five housing accommodations where such [permanent]
    17  increase  takes effect on or after September twenty-fourth, two thousand
    18  eleven, of the total cost incurred by the  landlord  in  providing  such
    19  modification   or  increase  in  dwelling  space,  services,  furniture,
    20  furnishings or  equipment,  including  the  cost  of  installation,  but
    21  excluding finance charges provided further that an owner who is entitled
    22  to  a  rent  increase pursuant to this clause shall not be entitled to a
    23  further rent increase based upon the installation of similar  equipment,
    24  or  new  furniture  or  furnishings  within  the useful life of such new
    25  equipment, or new  furniture  or  furnishings;  provided,  however,  the
    26  increase allowable under this clause shall only be in effect for a peri-
    27  od  of  five  years from the date of such increase. The owner shall give
    28  written notice to the commission of any such adjustment pursuant to this
    29  clause; provided, however, before any  adjustment  in  rent  shall  take
    30  effect  pursuant  to  this clause, the division of housing and community
    31  renewal shall require the owner of the property to file a statement with
    32  the division containing information outlining the scope of the work  and
    33  the date of completion of such work. Upon receipt of such statement, the
    34  division  of housing and community renewal shall inspect the property to
    35  ensure the specified work has been completed.    No  increase  shall  be
    36  collectible under this clause where the division of housing and communi-
    37  ty  renewal has determined the specified work has not been completed; or
    38  (7) there has been since March first, nineteen hundred  fifty,  a  major
    39  capital  improvement required for the operation, preservation or mainte-
    40  nance of the structure; which [for any order of the commissioner  issued
    41  after  the  effective  date  of  the  rent  act of 2015 the cost of such
    42  improvement shall be amortized over an eight-year period  for  buildings
    43  with thirty-five or fewer units or a nine year period for buildings with
    44  more  than  thiry-five  units,]  shall only be in effect for a period of
    45  five years from the date of such adjustment. Before ordering any adjust-
    46  ment in rent pursuant to this clause, the division of housing and commu-
    47  nity renewal shall require the owner of the property to file a statement
    48  with the division containing information outlining the scope of the work
    49  and the date of completion of such work. Upon receipt of such statement,
    50  the division of housing and community renewal shall inspect the property
    51  to ensure the specified work has been completed.  No increase  shall  be
    52  collectible under this clause where the division of housing and communi-
    53  ty renewal has determined the specified work has not been completed; or
    54    § 5. This act shall take effect immediately; provided that:
    55    (a)  the  amendments  to section 26-405 of the city rent and rehabili-
    56  tation law made by section one of this act shall remain  in  full  force
        A. 1067                             6
     1  and effect only as long as the public emergency requiring the regulation
     2  and control of residential rents and evictions continues, as provided in
     3  subdivision  3  of section 1 of the local emergency housing rent control
     4  act;
     5    (b)  the  amendments to section 26-511 of chapter 4 of title 26 of the
     6  administrative code of the city of New York made by section two of  this
     7  act  shall  expire  on  the  same date as such law expires and shall not
     8  affect the expiration of such law as provided under  section  26-520  of
     9  such law;
    10    (c) the amendments to section 6 of the emergency tenant protection act
    11  of  nineteen seventy-four made by section three of this act shall expire
    12  on the same date as such act expires and shall not affect the expiration
    13  of such act as provided in section 17 of chapter  576  of  the  laws  of
    14  1974;
    15    (d)  the amendments to section 4 of the emergency housing rent control
    16  law made by section four of this act shall expire on the  same  date  as
    17  such  law  expires  and  shall  not affect the expiration of such law as
    18  provided in subdivision 2 of section 1 of chapter 274  of  the  laws  of
    19  1946.