Bill Text: NY A02881 | 2011-2012 | General Assembly | Introduced
Bill Title: Relates to alternative hardship applications for properties subject to the rent stabilization code.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Engrossed - Dead) 2012-06-13 - REFERRED TO RULES [A02881 Detail]
Download: New_York-2011-A02881-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 2881 2011-2012 Regular Sessions I N A S S E M B L Y January 20, 2011 ___________ Introduced by M. of A. KAVANAGH, DINOWITZ -- read once and referred to the Committee on Housing 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 hardship applications THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Paragraph 6-a of subdivision c of section 26-511 of the 2 administrative code of the city of New York is amended to read as 3 follows: 4 (6-a) provides criteria whereby as an alternative to the hardship 5 application provided under paragraph six of this subdivision owners of 6 buildings acquired by the same owner or a related entity owned by the 7 same principals [three] SIX years prior to the date of application may 8 apply to the division for increases in excess of the level of applicable 9 guideline increases established under this law based on a finding by the 10 commissioner that such guideline increases are not sufficient to enable 11 the owner to maintain an annual gross rent income for such building 12 which exceeds the annual operating expenses of such building by a sum 13 equal to at least five percent of such gross rent. For the purposes of 14 this paragraph, operating expenses shall consist of the actual, reason- 15 able, costs of fuel, labor, utilities, taxes, other than income or 16 corporate franchise taxes, fees, permits, necessary contracted services 17 and non-capital repairs, insurance, parts and supplies, management fees 18 and other administrative costs and mortgage interest. For the purposes 19 of this paragraph, mortgage interest shall be deemed to mean interest on 20 a bona fide mortgage including an allocable portion of charges related 21 thereto. Criteria to be considered in determining a bona fide mortgage 22 other than an institutional mortgage shall include; condition of the 23 property, location of the property, the existing mortgage market at the 24 time the mortgage is placed, the term of the mortgage, the amortization EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01026-01-1 A. 2881 2 1 rate, the principal amount of the mortgage, security and other terms and 2 conditions of the mortgage. The commissioner shall set a rental value 3 for any unit occupied by the owner or a person related to the owner or 4 unoccupied at the owner's choice for more than one month at the last 5 regulated rent plus the minimum number of guidelines increases or, if no 6 such regulated rent existed or is known, the commissioner shall impute a 7 rent consistent with other rents in the building. The amount of hardship 8 increase shall be such as may be required to maintain the annual gross 9 rent income as provided by this paragraph. The division shall not grant 10 a hardship application under this paragraph or paragraph six of this 11 subdivision for a period of three years subsequent to granting a hard- 12 ship application under the provisions of this paragraph. The collection 13 of any increase in the rent for any housing accommodation pursuant to 14 this paragraph shall not exceed six percent in any year from the effec- 15 tive date of the order granting the increase over the rent set forth in 16 the schedule of gross rents, with collectability of any dollar excess 17 above said sum to be spread forward in similar increments and added to 18 the rent as established or set in future years. No application shall be 19 approved unless the owner's equity in such building exceeds five percent 20 of: (i) the arms length purchase price of the property; (ii) the cost of 21 any capital improvements for which the owner has not collected a 22 surcharge; (iii) any repayment of principal of any mortgage or loan used 23 to finance the purchase of the property or any capital improvements for 24 which the owner has not collected a surcharge and (iv) any increase in 25 the equalized assessed value of the property which occurred subsequent 26 to the first valuation of the property after purchase by the owner. For 27 the purposes of this paragraph, owner's equity shall mean the sum of (i) 28 the purchase price of the property less the principal of any mortgage or 29 loan used to finance the purchase of the property, (ii) the cost of any 30 capital improvement for which the owner has not collected a surcharge 31 less the principal of any mortgage or loan used to finance said improve- 32 ment, (iii) any repayment of the principal of any mortgage or loan used 33 to finance the purchase of the property or any capital improvement for 34 which the owner has not collected a surcharge, and (iv) any increase in 35 the equalized assessed value of the property which occurred subsequent 36 to the first valuation of the property after purchase by the owner. 37 S 2. Paragraph 5 of subdivision d of section 6 of section 4 of chapter 38 576 of the laws of 1974 enacting the emergency tenant protection act of 39 nineteen seventy-four, as amended by chapter 102 of the laws of 1984, is 40 amended to read as follows: 41 (5) as an alternative to the hardship application provided under para- 42 graph four of this subdivision, owners of buildings acquired by the same 43 owner or a related entity owned by the same principals [three] SIX years 44 prior to the date of application may apply to the division for increases 45 in excess of the level of applicable guideline increases established 46 under this law based on a finding by the commissioner that such guide- 47 line increases are not sufficient to enable the owner to maintain an 48 annual gross rent income for such building which exceeds the annual 49 operating expenses of such building by a sum equal to at least five 50 percent of such gross rent. For the purposes of this paragraph, operat- 51 ing expenses shall consist of the actual, reasonable, costs of fuel, 52 labor, utilities, taxes, other than income or corporate franchise taxes, 53 fees, permits, necessary contracted services and non-capital repairs, 54 insurance, parts and supplies, management fees and other administrative 55 costs and mortgage interest. For the purposes of this paragraph, mort- 56 gage interest shall be deemed to mean interest on a bona fide mortgage A. 2881 3 1 including an allocable portion of charges related thereto. Criteria to 2 be considered in determining a bona fide mortgage other than an institu- 3 tional mortgage shall include; condition of the property, location of 4 the property, the existing mortgage market at the time the mortgage is 5 placed, the term of the mortgage, the amortization rate, the principal 6 amount of the mortgage, security and other terms and conditions of the 7 mortgage. The commissioner shall set a rental value for any unit occu- 8 pied by the owner or a person related to the owner or unoccupied at the 9 owner's choice for more than one month at the last regulated rent plus 10 the minimum number of guidelines increases or, if no such regulated rent 11 existed or is known, the commissioner shall impute a rent consistent 12 with other rents in the building. The amount of hardship increase shall 13 be such as may be required to maintain the annual gross rent income as 14 provided by this paragraph. The division shall not grant a hardship 15 application under this paragraph or paragraph four of this subdivision 16 for a period of three years subsequent to granting a hardship applica- 17 tion under the provisions of this paragraph. The collection of any 18 increase in the rent for any housing accommodation pursuant to this 19 paragraph shall not exceed six percent in any year from the effective 20 date of the order granting the increase over the rent set forth in the 21 schedule of gross rents, with collectability of any dollar excess above 22 said sum to be spread forward in similar increments and added to the 23 rent as established or set in future years. No application shall be 24 approved unless the owner's equity in such building exceeds five percent 25 of: (i) the arms length purchase price of the property; (ii) the cost of 26 any capital improvements for which the owner has not collected a 27 surcharge; (iii) any repayment of principal of any mortgage or loan used 28 to finance the purchase of the property or any capital improvements for 29 which the owner has not collected a surcharge; and (iv) any increase in 30 the equalized assessed value of the property which occurred subsequent 31 to the first valuation of the property after purchase by the owner. For 32 the purposes of this paragraph, owner's equity shall mean the sum of (i) 33 the purchase price of the property less the principal of any mortgage or 34 loan used to finance the purchase of the property, (ii) the cost of any 35 capital improvement for which the owner has not collected a surcharge 36 less the principal of any mortgage or loan used to finance said improve- 37 ment, (iii) any repayment of the principal of any mortgage or loan used 38 to finance the purchase of the property or any capital improvement for 39 which the owner has not collected a surcharge, and (iv) any increase in 40 the equalized assessed value of the property which occurred subsequent 41 to the first valuation of the property after purchase by the owner. 42 S 3. This act shall take effect immediately; provided that the amend- 43 ments to section 26-511 of chapter 4 of title 26 of the administrative 44 code of the city of New York made by section one of this act shall 45 expire on the same date as such law expires and shall not affect the 46 expiration of such law as provided under section 26-520 of such law; and 47 provided that the amendments to section 6 of the emergency tenant 48 protection act of nineteen seventy-four made by section two of this act 49 shall expire on the same date as such act expires and shall not affect 50 the expiration of such act as provided in section 17 of chapter 576 of 51 the laws of 1974.