Bill Text: NY A05495 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to eliminating rent increases for structures due to major capital improvements in a city with a population of one million or more.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - referred to housing [A05495 Detail]
Download: New_York-2019-A05495-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5495 2019-2020 Regular Sessions IN ASSEMBLY February 12, 2019 ___________ Introduced by M. of A. DICKENS -- read once and referred to the Commit- tee on Housing AN ACT to amend the emergency tenant protection act of nineteen seven- ty-four, in relation to eliminating rent increases for structures due to major capital improvements The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraphs 3, 4 and 5 of subdivision d of section 6 of 2 section 4 of chapter 576 of the laws of 1974, constituting the emergency 3 tenant protection act of nineteen seventy-four, paragraph 3 as amended 4 by section 30 of part A of chapter 20 of the laws of 2015, paragraph 4 5 as amended by chapter 403 of the laws of 1983 and paragraph 5 as amended 6 by chapter 102 of the laws of 1984, are amended to read as follows: 7 (3) [there has been since January first, nineteen hundred seventy-four8a major capital improvement required for the operation, preservation or9maintenance of the structure. An adjustment under this paragraph shall10be in an amount sufficient to amortize the cost of the improvements11pursuant to this paragraph over an eight-year period for a building with12thirty-five or fewer housing accommodations, or a nine-year period for a13building with more than thirty-five housing accommodations, for any14determination issued by the division of housing and community renewal15after the effective date of the rent act of 2015, or16(4)] an owner by application to the state division of housing and 17 community renewal for increases in the rents in excess of the rent 18 adjustment authorized by the rent guidelines board under this act estab- 19 lishes a hardship, and the state division finds that the rate of rent 20 adjustment is not sufficient to enable the owner to maintain approxi- 21 mately the same ratio between operating expenses, including taxes and 22 labor costs but excluding debt service, financing costs, and management 23 fees, and gross rents which prevailed on the average over the immediate EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07899-01-9A. 5495 2 1 preceding five year period, or for the entire life of the building if 2 less than five years, or 3 [(5)] (4) as an alternative to the hardship application provided under 4 paragraph [four] three of this subdivision, owners of buildings acquired 5 by the same owner or a related entity owned by the same principals three 6 years prior to the date of application may apply to the division for 7 increases in excess of the level of applicable guideline increases 8 established under this law based on a finding by the commissioner that 9 such guideline increases are not sufficient to enable the owner to main- 10 tain an annual gross rent income for such building which exceeds the 11 annual operating expenses of such building by a sum equal to at least 12 five percent of such gross rent. For the purposes of this paragraph, 13 operating expenses shall consist of the actual, reasonable, costs of 14 fuel, labor, utilities, taxes, other than income or corporate franchise 15 taxes, fees, permits, necessary contracted services and non-capital 16 repairs, insurance, parts and supplies, management fees and other admin- 17 istrative costs and mortgage interest. For the purposes of this para- 18 graph, mortgage interest shall be deemed to mean interest on a bona fide 19 mortgage including an allocable portion of charges related thereto. 20 Criteria to be considered in determining a bona fide mortgage other than 21 an institutional mortgage shall include; condition of the property, 22 location of the property, the existing mortgage market at the time the 23 mortgage is placed, the term of the mortgage, the amortization rate, the 24 principal amount of the mortgage, security and other terms and condi- 25 tions of the mortgage. The commissioner shall set a rental value for any 26 unit occupied by the owner or a person related to the owner or unoccu- 27 pied at the owner's choice for more than one month at the last regulated 28 rent plus the minimum number of guidelines increases or, if no such 29 regulated rent existed or is known, the commissioner shall impute a rent 30 consistent with other rents in the building. The amount of hardship 31 increase shall be such as may be required to maintain the annual gross 32 rent income as provided by this paragraph. The division shall not grant 33 a hardship application under this paragraph or paragraph [four] three of 34 this subdivision for a period of three years subsequent to granting a 35 hardship application under the provisions of this paragraph. The 36 collection of any increase in the rent for any housing accommodation 37 pursuant to this paragraph shall not exceed six percent in any year from 38 the effective date of the order granting the increase over the rent set 39 forth in the schedule of gross rents, with collectability of any dollar 40 excess above said sum to be spread forward in similar increments and 41 added to the rent as established or set in future years. No application 42 shall be approved unless the owner's equity in such building exceeds 43 five percent of: (i) the arms length purchase price of the property; 44 (ii) the cost of any capital improvements for which the owner has not 45 collected a surcharge; (iii) any repayment of principal of any mortgage 46 or loan used to finance the purchase of the property or any capital 47 improvements for which the owner has not collected a surcharge; and (iv) 48 any increase in the equalized assessed value of the property which 49 occurred subsequent to the first valuation of the property after 50 purchase by the owner. For the purposes of this paragraph, owner's equi- 51 ty shall mean the sum of (i) the purchase price of the property less the 52 principal of any mortgage or loan used to finance the purchase of the 53 property, (ii) the cost of any capital improvement for which the owner 54 has not collected a surcharge less the principal of any mortgage or loan 55 used to finance said improvement, (iii) any repayment of the principal 56 of any mortgage or loan used to finance the purchase of the property orA. 5495 3 1 any capital improvement for which the owner has not collected a 2 surcharge, and (iv) any increase in the equalized assessed value of the 3 property which occurred subsequent to the first valuation of the proper- 4 ty after purchase by the owner. 5 § 2. This act shall take effect immediately; provided that the amend- 6 ments to section 6 of the emergency tenant protection act of nineteen 7 seventy-four made by section one of this act shall expire on the same 8 date as such act expires and shall not affect the expiration of such act 9 as provided in section 17 of chapter 576 of the laws of 1974.