Bill Text: NY A05161 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to rent adjustments for major capital improvements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - referred to housing [A05161 Detail]
Download: New_York-2019-A05161-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5161 2019-2020 Regular Sessions IN ASSEMBLY February 7, 2019 ___________ Introduced by M. of A. CYMBROWITZ -- read once and referred to the Committee on Housing 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 22 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 23 tive code of the city of New York, as amended by section 29 of part A of 24 chapter 20 of the laws of 2015, is amended to read as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD09270-01-9A. 5161 2 1 (6) provides criteria whereby the commissioner may act upon applica- 2 tions by owners for increases in excess of the level of fair rent 3 increase established under this law provided, however, that such crite- 4 ria shall provide (a) as to hardship applications, for a finding that 5 the level of fair rent increase is not sufficient to enable the owner to 6 maintain approximately the same average annual net income (which shall 7 be computed without regard to debt service, financing costs or manage- 8 ment fees) for the three year period ending on or within six months of 9 the date of an application pursuant to such criteria as compared with 10 annual net income, which prevailed on the average over the period nine- 11 teen hundred sixty-eight through nineteen hundred seventy, or for the 12 first three years of operation if the building was completed since nine- 13 teen hundred sixty-eight or for the first three fiscal years after a 14 transfer of title to a new owner provided the new owner can establish to 15 the satisfaction of the commissioner that he or she acquired title to 16 the building as a result of a bona fide sale of the entire building and 17 that the new owner is unable to obtain requisite records for the fiscal 18 years nineteen hundred sixty-eight through nineteen hundred seventy 19 despite diligent efforts to obtain same from predecessors in title and 20 further provided that the new owner can provide financial data covering 21 a minimum of six years under his or her continuous and uninterrupted 22 operation of the building to meet the three year to three year compar- 23 ative test periods herein provided; and (b) as to completed building- 24 wide major capital improvements, for a finding that such improvements 25 are deemed depreciable under the Internal Revenue Code and that the cost 26 is to be amortized over an eight-year period for a building with thir- 27 ty-five or fewer housing accommodations, or a nine-year period for a 28 building with more than thirty-five housing accommodations, for any 29 determination issued by the division of housing and community renewal 30 after the effective date of the rent act of 2015, based upon cash 31 purchase price exclusive of interest or service charges. A rent adjust- 32 ment for a major capital improvement may only be granted if the owner or 33 agent of the subject building first applies for and receives benefits 34 pursuant to section 11-243 of this code for the building for which they 35 are seeking a major capital improvement for, provided, however, an owner 36 or agent of the subject building that is denied benefits pursuant to 37 section 11-243 of this code for reasons unrelated to an untimely or 38 improperly completed application shall still be eligible to receive a 39 rent adjustment for a major capital improvement. Notwithstanding 40 anything to the contrary contained herein, no hardship increase granted 41 pursuant to this paragraph shall, when added to the annual gross rents, 42 as determined by the commissioner, exceed the sum of, (i) the annual 43 operating expenses, (ii) an allowance for management services as deter- 44 mined by the commissioner, (iii) actual annual mortgage debt service 45 (interest and amortization) on its indebtedness to a lending institu- 46 tion, an insurance company, a retirement fund or welfare fund which is 47 operated under the supervision of the banking or insurance laws of the 48 state of New York or the United States, and (iv) eight and one-half 49 percent of that portion of the fair market value of the property which 50 exceeds the unpaid principal amount of the mortgage indebtedness 51 referred to in subparagraph (iii) of this paragraph. Fair market value 52 for the purposes of this paragraph shall be six times the annual gross 53 rent. The collection of any increase in the stabilized rent for any 54 apartment pursuant to this paragraph shall not exceed six percent in any 55 year from the effective date of the order granting the increase over the 56 rent set forth in the schedule of gross rents, with collectability ofA. 5161 3 1 any dollar excess above said sum to be spread forward in similar incre- 2 ments and added to the stabilized rent as established or set in future 3 years; 4 § 3. This act shall take effect immediately, provided, however that 5 the amendments to section 26-405 of the city rent and rehabilitation law 6 made by section one of this act shall remain in full force and effect 7 only so long as the public emergency requiring the regulation and 8 control of residential rents and evictions continues, as provided in 9 subdivision 3 of section 1 of the local emergency housing rent control 10 act; and provided, further, that the amendments to section 26-511 of the 11 rent stabilization law of nineteen hundred sixty-nine made by section 12 two of this act shall expire on the same date as such law expires and 13 shall not affect the expiration of such law as provided under section 14 26-520 of such law, as from time to time amended; and provided, further, 15 that the provisions of sections one and two of this act shall only apply 16 to those buildings that commence work on a major capital improvement 45 17 days or later than the effective date of this act.