Bill Text: NY A03957 | 2015-2016 | General Assembly | Amended
Bill Title: Relates to rent adjustments for major capital improvements.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Engrossed - Dead) 2016-06-09 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [A03957 Detail]
Download: New_York-2015-A03957-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 3957--A 2015-2016 Regular Sessions IN ASSEMBLY January 28, 2015 ___________ Introduced by M. of A. WRIGHT -- read once and referred to the Committee on Housing -- recommitted to the Committee on Housing in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the administrative code of the city of New York, in relation to rent adjustments for major capital improvements The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section 2 26-405 of the administrative code of the city of New York, as amended by 3 section 31 of part A of chapter 20 of the laws of 2015, is amended to 4 read as follows: 5 (g) There has been since July first, nineteen hundred seventy, a major 6 capital improvement required for the operation, preservation or mainte- 7 nance of the structure. An adjustment under this subparagraph [(g)] for 8 any order of the commissioner issued after the effective date of the 9 rent act of 2015 shall be in an amount sufficient to amortize the cost 10 of the improvements pursuant to this subparagraph [(g)] over an eight- 11 year period for buildings with thirty-five or fewer units or a [nine12year] nine-year period for buildings with more than thirty-five 13 units[,]. A rent adjustment for a major capital improvement may only be 14 granted if the owner or agent of the subject building first applies for 15 and receives benefits pursuant to section 11-243 of this code for the 16 building for which they are seeking a major capital improvement for, 17 provided, however, an owner or agent of the subject building that is 18 denied benefits pursuant to section 11-243 of this code for reasons 19 unrelated to an untimely or improperly completed application shall still 20 be eligible to receive a rent adjustment for a major capital improve- 21 ment; or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD05400-02-6A. 3957--A 2 1 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 2 tive code of the city of New York, as amended by section 29 of part A of 3 chapter 20 of the laws of 2015, is amended to read as follows: 4 (6) provides criteria whereby the commissioner may act upon applica- 5 tions by owners for increases in excess of the level of fair rent 6 increase established under this law provided, however, that such crite- 7 ria shall provide (a) as to hardship applications, for a finding that 8 the level of fair rent increase is not sufficient to enable the owner to 9 maintain approximately the same average annual net income (which shall 10 be computed without regard to debt service, financing costs or manage- 11 ment fees) for the three year period ending on or within six months of 12 the date of an application pursuant to such criteria as compared with 13 annual net income, which prevailed on the average over the period nine- 14 teen hundred sixty-eight through nineteen hundred seventy, or for the 15 first three years of operation if the building was completed since nine- 16 teen hundred sixty-eight or for the first three fiscal years after a 17 transfer of title to a new owner provided the new owner can establish to 18 the satisfaction of the commissioner that he or she acquired title to 19 the building as a result of a bona fide sale of the entire building and 20 that the new owner is unable to obtain requisite records for the fiscal 21 years nineteen hundred sixty-eight through nineteen hundred seventy 22 despite diligent efforts to obtain same from predecessors in title and 23 further provided that the new owner can provide financial data covering 24 a minimum of six years under his or her continuous and uninterrupted 25 operation of the building to meet the three year to three year compar- 26 ative test periods herein provided; and (b) as to completed building- 27 wide major capital improvements, for a finding that such improvements 28 are deemed depreciable under the Internal Revenue Code and that the cost 29 is to be amortized over an eight-year period for a building with thir- 30 ty-five or fewer housing accommodations, or a nine-year period for a 31 building with more than thirty-five housing accommodations, for any 32 determination issued by the division of housing and community renewal 33 after the effective date of the rent act of 2015, based upon cash 34 purchase price exclusive of interest or service charges. A rent adjust- 35 ment for a major capital improvement may only be granted if the owner or 36 agent of the subject building first applies for and receives benefits 37 pursuant to section 11-243 of this code for the building for which they 38 are seeking a major capital improvement for, provided, however, an owner 39 or agent of the subject building that is denied benefits pursuant to 40 section 11-243 of this code for reasons unrelated to an untimely or 41 improperly completed application shall still be eligible to receive a 42 rent adjustment for a major capital improvement. Notwithstanding 43 anything to the contrary contained herein, no hardship increase granted 44 pursuant to this paragraph shall, when added to the annual gross rents, 45 as determined by the commissioner, exceed the sum of, (i) the annual 46 operating expenses, (ii) an allowance for management services as deter- 47 mined by the commissioner, (iii) actual annual mortgage debt service 48 (interest and amortization) on its indebtedness to a lending institu- 49 tion, an insurance company, a retirement fund or welfare fund which is 50 operated under the supervision of the banking or insurance laws of the 51 state of New York or the United States, and (iv) eight and one-half 52 percent of that portion of the fair market value of the property which 53 exceeds the unpaid principal amount of the mortgage indebtedness 54 referred to in subparagraph (iii) of this paragraph. Fair market value 55 for the purposes of this paragraph shall be six times the annual gross 56 rent. The collection of any increase in the stabilized rent for anyA. 3957--A 3 1 apartment pursuant to this paragraph shall not exceed six percent in any 2 year from the effective date of the order granting the increase over the 3 rent set forth in the schedule of gross rents, with collectability of 4 any dollar excess above said sum to be spread forward in similar incre- 5 ments and added to the stabilized rent as established or set in future 6 years; 7 § 3. This act shall take effect immediately, provided, however that 8 the amendments to section 26-405 of the city rent and rehabilitation law 9 made by section one of this act shall remain in full force and effect 10 only so long as the public emergency requiring the regulation and 11 control of residential rents and evictions continues, as provided in 12 subdivision 3 of section 1 of the local emergency housing rent control 13 act; and provided, further, that the amendments to section 26-511 of the 14 rent stabilization law of nineteen hundred sixty-nine made by section 15 two of this act shall expire on the same date as such law expires and 16 shall not affect the expiration of such law as provided under section 17 26-520 of such law, as from time to time amended; and provided, further, 18 that the provisions of sections one and two of this act shall only apply 19 to those buildings that commence work on a major capital improvement 45 20 days or later than the effective date of this act.
