Bill Text: NY A11312 | 2017-2018 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Eliminates the department of homes and community renewal's major capital improvement program; creates the guaranteed habitability protections program within the department of homes and community renewal; creates a guaranteed habitability protections tax credit; eliminates rent increases to pay for major capital improvements.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2018-08-29 - print number 11312a [A11312 Detail]

Download: New_York-2017-A11312-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          11312
                   IN ASSEMBLY
                                     August 22, 2018
                                       ___________
        Introduced by COMMITTEE ON RULES -- (at request of M. of A. Barnwell) --
          read once and referred to the Committee on Housing
        AN ACT eliminating the department of homes and community renewal's major
          capital  improvement  program;  creating  the  guaranteed habitability
          protections program within  the  department  of  homes  and  community
          renewal;  to  amend  the tax law, in relation to creating a guaranteed
          habitability protections tax credit; to amend chapter 274 of the  laws
          of  1946, constituting the emergency housing rent control law, chapter
          576 of the laws of 1974, constituting the emergency tenant  protection
          act  of  1974, and the administrative code of the city of New York, in
          relation to eliminating  rent  increases  to  pay  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. The department of homes and community renewal shall end the
     2  major capital improvement program. All increases to rents allowed during
     3  the life of the major capital improvement program shall be repealed upon
     4  petition from a tenant, all applications pending review  for  the  major
     5  capital improvement program shall be denied, and no rent increases shall
     6  be allowed under the major capital improvement program.
     7    §  2.  (a)  The  department  of  homes and community renewal is hereby
     8  authorized  and  directed  to  establish   a   guaranteed   habitability
     9  protections  program  and  promulgate, amend, add or remove any rules or
    10  regulations necessary to establish such program.
    11    (b) The program shall work to ensure the habitability  of  all  rental
    12  dwellings, specifically that no rental dwelling becomes uninhabitable by
    13  requiring regular updates and improvements to rental dwellings. A rental
    14  dwelling  shall be deemed uninhabitable where it is not safe and livable
    15  and the landlord would be in violation of the warranty of habitability.
    16    (c) When the department of homes and community renewal determines that
    17  any unit of a rental dwelling has an issue which may impact the  habita-
    18  bility  of  the  unity,  such  department  under this program shall give
    19  notice to the landlord. Where the issue is  not  life  threatening,  the
    20  landlord  shall  have  within  thirty  days  to rectify the issue before
    21  incurring a violation. Where the issue is life  threatening,  as  deter-
    22  mined  by  the  department  of homes and community renewal, the landlord
    23  shall have an amount of time as determined by such department  based  on
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16373-01-8
        A. 11312                            2
     1  the  severity  of  the  issue  to  rectify  the issue before incurring a
     2  violation. The department of homes and community renewal shall determine
     3  which issues are and which issues are not life threatening. Upon  incur-
     4  ring  a  violation,  the  landlord shall have the same amount of time to
     5  rectify the issue before incurring another violation. An issue shall  be
     6  deemed  rectified  when  the  issue no longer exists or the tenants have
     7  been moved into another unit of equal or  greater  quality,  where  such
     8  determination  of  quality  shall be made by the department of homes and
     9  community renewal. A landlord shall be fined:
    10    (i) $10,000 for the first violation involving a  non-life  threatening
    11  issue;
    12    (ii) $25,000 for the second violation involving a non-life threatening
    13  issue;
    14    (iii)  $50,000 for the third and each subsequent violation involving a
    15  non-life threatening issue; and
    16    (iv) $100,000 for each resident of an affected unit  for  a  violation
    17  involving a life threatening issue.
    18    §  3. Section 210-B of the tax law is amended by adding a new subdivi-
    19  sion 53 to read as follows:
    20    53. Guaranteed habitability protections tax credit. (a)  Allowance  of
    21  credit.  A  taxpayer  with  approval  from  the  guaranteed habitability
    22  protections program of the department of  homes  and  community  renewal
    23  shall  be  allowed a credit, to be computed as provided in paragraph (b)
    24  of this subdivision, against the tax imposed by this article.
    25    (b) Amount of credit. The credit allowed pursuant to paragraph (a)  of
    26  this  subdivision  shall be in an amount equal to the amount approved by
    27  the guaranteed habitability protections program  of  the  department  of
    28  homes and community renewal.
    29    (c)  Application  of credit. The credit allowed under this subdivision
    30  for any taxable year shall not reduce the tax due for such year to  less
    31  than  the  amount  prescribed  in  paragraph  (d)  of subdivision one of
    32  section two hundred ten of this article.  If,  however,  the  amount  of
    33  credits  allowed under this subdivision for any taxable year reduces the
    34  tax to such amount, any amount of credit thus  not  deductible  in  such
    35  taxable year shall be treated as an overpayment of tax to be credited or
    36  refunded  in  accordance  with  the  provisions  of section one thousand
    37  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    38  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    39  notwithstanding, no interest shall be paid thereon.
    40    § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
    41  of  the  tax  law  is  amended  by adding a new clause (xliv) to read as
    42  follows:
    43  (xliv) Guaranteed habitability        Amount of credit under
    44  protections tax credit under          subdivision fifty-three of
    45  subsection (jjj)                      section two hundred ten-B
    46    § 5. Section 606 of the tax law is amended by adding a new  subsection
    47  (jjj) to read as follows:
    48    (jjj) Guaranteed habitability protections tax credit. (1) Allowance of
    49  credit.  A  taxpayer  with  approval  from  the  guaranteed habitability
    50  protections program of the department of  homes  and  community  renewal
    51  shall  be  allowed a credit, to be computed as provided in paragraph two
    52  of this subsection, against the tax imposed by this article.
    53    (2) Amount of credit. The credit allowed pursuant to paragraph one  of
    54  this  subsection  shall  be in an amount equal to the amount approved by
    55  the guaranteed habitability protections program  of  the  department  of
    56  homes and community renewal.
        A. 11312                            3
     1    (3)  Application  of credit. If the amount of the credit allowed under
     2  this subsection for any taxable year shall exceed the taxpayer's tax for
     3  such year, the excess shall be treated as an overpayment of  tax  to  be
     4  credited  or  refunded  in accordance with the provisions of section six
     5  hundred  eighty-six of this article, provided, however, that no interest
     6  shall be paid thereon.
     7    § 6. Paragraph 2 of subdivision 3-a of section 4,  subparagraph  (iii)
     8  of the opening paragraph of paragraph (a) of subdivision 4 of section 4,
     9  subparagraphs  7,  8,  9  and 10 of the second undesignated paragraph of
    10  paragraph (a) of subdivision 4  of  section  4,  and  subdivision  9  of
    11  section 5 of chapter 274 of the laws of 1946, constituting the emergency
    12  housing rent control law, as amended by chapter 337 of the laws of 1961,
    13  subparagraph  (iii)  of  paragraph  (a) of subdivision 4 of section 4 as
    14  amended by chapter 21 of the laws of 1962, subparagraphs 8, 9 and 10  of
    15  the  second  undesignated paragraph of paragraph (a) of subdivision 4 of
    16  section 4 as amended by section 25 of part B of chapter 97 of  the  laws
    17  of  2011,  subparagraph  7 of the second undesignated paragraph of para-
    18  graph (a) of subdivision 4 of section 4 as amended by section 32 of part
    19  A of chapter 20 of the laws of 2015, and subdivision 9 of section  5  as
    20  added  by  chapter  116  of  the  laws  of  1997, are amended to read as
    21  follows:
    22    (2) the amount of  increases  in  maximum  rent  authorized  by  order
    23  because of increases in dwelling space, services, furniture, furnishings
    24  or equipment[, or major capital improvements].
    25    (iii)  The  ratio of the sales price to the annual gross income of the
    26  property, with consideration given to the total amount of  rent  adjust-
    27  ments  previously  granted,  exclusive  of  rent  adjustments because of
    28  changes in dwelling space, services, furniture,  furnishings  or  equip-
    29  ment, [major capital improvements,] or substantial rehabilitation;
    30    (7) [there has been since March first, nineteen hundred fifty, a major
    31  capital  improvement required for the operation, preservation or mainte-
    32  nance of the structure; which for any order of the  commissioner  issued
    33  after  the  effective  date  of  the  rent  act of 2015 the cost of such
    34  improvement shall be amortized over an eight-year period  for  buildings
    35  with thirty-five or fewer units or a nine year period for buildings with
    36  more  than  thiry-five  units, or (8)] there has been since March first,
    37  nineteen hundred fifty, in structures containing more than four  housing
    38  accommodations,  other improvements made with the express consent of the
    39  tenants in occupancy of at least seventy-five per centum of the  housing
    40  accommodations,  provided, however, that no adjustment granted hereunder
    41  shall exceed fifteen per centum unless the  tenants  have  agreed  to  a
    42  higher  percentage  of  increase, as herein provided; or [(9)] (8) there
    43  has been, since March first, nineteen hundred fifty, a subletting  with-
    44  out  written  consent  from the landlord or an increase in the number of
    45  adult occupants who are not members  of  the  immediate  family  of  the
    46  tenant, and the landlord has not been compensated therefor by adjustment
    47  of  the  maximum rent by lease or order of the commission or pursuant to
    48  the federal act; or [(10)]  (9)  the  presence  of  unique  or  peculiar
    49  circumstances  materially  affecting  the maximum rent has resulted in a
    50  maximum rent which is  substantially  lower  than  the  rents  generally
    51  prevailing  in  the same area for substantially similar housing accommo-
    52  dations.
    53    9. Notwithstanding any provision of this law to the  contrary  in  the
    54  case where all tenants occupying the housing accommodation on the effec-
    55  tive date of this subdivision have vacated the housing accommodation and
    56  a  family  member  of such vacating tenant or tenants is entitled to and
        A. 11312                            4
     1  continues to occupy the housing accommodation subject to the protections
     2  of this law, if such accommodation continues to be subject to  this  law
     3  after  such family member vacates, on the occurrence of such vacancy the
     4  maximum collectable rent shall be increased by a sum equal to the allow-
     5  ance  then  in  effect  for  vacancy  leases  for housing accommodations
     6  covered by the rent stabilization law of  nineteen  hundred  sixty-nine,
     7  including  the  amount  allowed  by paragraph five-a of subdivision c of
     8  section 26-511 of such law. This increase shall be in  addition  to  any
     9  other  increases provided in this law including an adjustment based upon
    10  [a major capital improvement, or] a substantial increase or decrease  in
    11  dwelling  space  or  a change in the services, furniture, furnishings or
    12  equipment provided in the housing  accommodation,  pursuant  to  section
    13  four  of  this law and shall be applicable in like manner to each second
    14  subsequent succession.
    15    § 7. Paragraphs 3, 4, and 5 of subdivision  d  and  subdivision  g  of
    16  section  6 of section 4 of chapter 576 of the laws of 1974, constituting
    17  the emergency tenant protection act of 1974, paragraph 3 of  subdivision
    18  d  as amended by section 30 of part A of chapter 20 of the laws of 2015,
    19  paragraph 4 of subdivision d as amended by chapter 403 of  the  laws  of
    20  1983, paragraph 5 of subdivision d as amended by chapter 102 of the laws
    21  of  1984, and subdivision g as added by chapter 116 of the laws of 1997,
    22  are amended to read as follows:
    23    (3) [there has been since January first, nineteen hundred seventy-four
    24  a major capital improvement required for the operation, preservation  or
    25  maintenance  of  the structure. An adjustment under this paragraph shall
    26  be in an amount sufficient to amortize  the  cost  of  the  improvements
    27  pursuant to this paragraph over an eight-year period for a building with
    28  thirty-five or fewer housing accommodations, or a nine-year period for a
    29  building  with  more  than  thirty-five  housing accommodations, for any
    30  determination issued by the division of housing  and  community  renewal
    31  after the effective date of the rent act of 2015, or
    32    (4)]  an  owner  by  application  to the state division of housing and
    33  community renewal for increases in the  rents  in  excess  of  the  rent
    34  adjustment authorized by the rent guidelines board under this act estab-
    35  lishes  a  hardship,  and the state division finds that the rate of rent
    36  adjustment is not sufficient to enable the owner  to  maintain  approxi-
    37  mately  the  same  ratio between operating expenses, including taxes and
    38  labor costs but excluding debt service, financing costs, and  management
    39  fees,  and gross rents which prevailed on the average over the immediate
    40  preceding five year period, or for the entire life of  the  building  if
    41  less than five years, or
    42    [(5)] (4) as an alternative to the hardship application provided under
    43  paragraph  four of this subdivision, owners of buildings acquired by the
    44  same owner or a related entity owned by the same principals three  years
    45  prior to the date of application may apply to the division for increases
    46  in  excess  of  the  level of applicable guideline increases established
    47  under this law based on a finding by the commissioner that  such  guide-
    48  line  increases  are  not  sufficient to enable the owner to maintain an
    49  annual gross rent income for such  building  which  exceeds  the  annual
    50  operating  expenses  of  such  building  by a sum equal to at least five
    51  percent of such gross rent. For the purposes of this paragraph,  operat-
    52  ing  expenses  shall  consist  of the actual, reasonable, costs of fuel,
    53  labor, utilities, taxes, other than income or corporate franchise taxes,
    54  fees, permits, necessary contracted services  and  non-capital  repairs,
    55  insurance,  parts and supplies, management fees and other administrative
    56  costs and mortgage interest. For the purposes of this  paragraph,  mort-
        A. 11312                            5
     1  gage  interest  shall be deemed to mean interest on a bona fide mortgage
     2  including an allocable portion of charges related thereto.  Criteria  to
     3  be considered in determining a bona fide mortgage other than an institu-
     4  tional  mortgage  shall  include; condition of the property, location of
     5  the property, the existing mortgage market at the time the  mortgage  is
     6  placed,  the  term of the mortgage, the amortization rate, the principal
     7  amount of the mortgage, security and other terms and conditions  of  the
     8  mortgage.  The  commissioner shall set a rental value for any unit occu-
     9  pied by the owner or a person related to the owner or unoccupied at  the
    10  owner's  choice  for more than one month at the last regulated rent plus
    11  the minimum number of guidelines increases or, if no such regulated rent
    12  existed or is known, the commissioner shall  impute  a  rent  consistent
    13  with  other rents in the building. The amount of hardship increase shall
    14  be such as may be required to maintain the annual gross rent  income  as
    15  provided  by  this  paragraph.  The  division shall not grant a hardship
    16  application under this paragraph or paragraph four of  this  subdivision
    17  for  a  period of three years subsequent to granting a hardship applica-
    18  tion under the provisions of  this  paragraph.  The  collection  of  any
    19  increase  in  the  rent  for  any housing accommodation pursuant to this
    20  paragraph shall not exceed six percent in any year  from  the  effective
    21  date  of  the order granting the increase over the rent set forth in the
    22  schedule of gross rents, with collectability of any dollar excess  above
    23  said  sum  to  be  spread forward in similar increments and added to the
    24  rent as established or set in future  years.  No  application  shall  be
    25  approved unless the owner's equity in such building exceeds five percent
    26  of: (i) the arms length purchase price of the property; (ii) the cost of
    27  any  capital  improvements  for  which  the  owner  has  not collected a
    28  surcharge; (iii) any repayment of principal of any mortgage or loan used
    29  to finance the purchase of the property or any capital improvements  for
    30  which  the owner has not collected a surcharge; and (iv) any increase in
    31  the equalized assessed value of the property which  occurred  subsequent
    32  to  the first valuation of the property after purchase by the owner. For
    33  the purposes of this paragraph, owner's equity shall mean the sum of (i)
    34  the purchase price of the property less the principal of any mortgage or
    35  loan used to finance the purchase of the property, (ii) the cost of  any
    36  capital  improvement  for  which the owner has not collected a surcharge
    37  less the principal of any mortgage or loan used to finance said improve-
    38  ment, (iii) any repayment of the principal of any mortgage or loan  used
    39  to  finance  the purchase of the property or any capital improvement for
    40  which the owner has not collected a surcharge, and (iv) any increase  in
    41  the  equalized  assessed value of the property which occurred subsequent
    42  to the first valuation of the property after purchase by the owner.
    43    g. Notwithstanding any provision of this act to the  contrary  in  the
    44  case where all tenants named in a lease have permanently vacated a hous-
    45  ing accommodation and a family member of such tenant or tenants is enti-
    46  tled  to  and  executes a renewal lease for the housing accommodation if
    47  such accommodation continues to be subject to this act after such family
    48  member vacates, on the occurrence of such vacancy  the  legal  regulated
    49  rent  shall  be increased by a sum equal to the allowance then in effect
    50  for vacancy leases, including the amount allowed by subdivision (a-1) of
    51  section ten of this act. Such increase shall be in addition to any other
    52  increases provided for in this act including an adjustment based upon [a
    53  major capital improvement, or] a substantial modification or increase of
    54  dwelling space or services, or installation of new equipment or improve-
    55  ments or new furniture or furnishings provided  in  or  to  the  housing
        A. 11312                            6
     1  accommodation, pursuant to section six of this act and shall be applica-
     2  ble in like manner to each second subsequent succession.
     3    §  8.  Subdivision  (a-1) of section 10 of section 4 of chapter 576 of
     4  the laws of 1974, constituting the emergency tenant  protection  act  of
     5  1974,  as amended by section 16-b of part A of chapter 20 of the laws of
     6  2015, is amended to read as follows:
     7    (a-1) provides that, notwithstanding any provision of  this  act,  the
     8  legal regulated rent for any vacancy lease entered into after the effec-
     9  tive  date  of  this subdivision shall be as hereinafter set forth.  The
    10  previous legal regulated rent for such housing  accommodation  shall  be
    11  increased  by  the  following: (i) if the vacancy lease is for a term of
    12  two years, twenty percent of the previous legal regulated rent; or  (ii)
    13  if  the  vacancy  lease  is for a term of one year the increase shall be
    14  twenty percent of the previous legal regulated rent less an amount equal
    15  to the difference between (a)  the  two  year  renewal  lease  guideline
    16  promulgated  by  the guidelines board of the county in which the housing
    17  accommodation is located applied to the previous  legal  regulated  rent
    18  and  (b)  the one year renewal lease guideline promulgated by the guide-
    19  lines board of the county in which the housing accommodation is  located
    20  applied  to the previous legal regulated rent. However, where the amount
    21  charged and paid by the prior tenant pursuant to paragraph  fourteen  of
    22  this  subdivision, was less than the legal regulated rent, such increase
    23  to the legal regulated rent shall not  exceed:    five  percent  of  the
    24  previous  legal  regulated rent if the last vacancy lease commenced less
    25  than two years ago; ten percent of the previous legal regulated rent  if
    26  the last vacancy commenced less than three years ago; fifteen percent of
    27  the  previous  legal  regulated rent if the last vacancy lease commenced
    28  less than four years ago; twenty percent of the previous legal regulated
    29  rent if the last vacancy lease commenced four  or  more  years  ago.  In
    30  addition,  if the legal regulated rent was not increased with respect to
    31  such housing accommodation by a permanent vacancy allowance within eight
    32  years prior to a vacancy lease executed on or after the  effective  date
    33  of  this  subdivision, the legal regulated rent may be further increased
    34  by an amount equal to the product resulting from multiplying such previ-
    35  ous legal regulated rent by six-tenths of one percent and further multi-
    36  plying the amount of rent increase resulting therefrom by the greater of
    37  (A) the number of years since  the  imposition  of  the  last  permanent
    38  vacancy  allowance,  or (B) if the rent was not increased by a permanent
    39  vacancy allowance since the housing accommodation became subject to this
    40  act, the number of  years  that  such  housing  accommodation  has  been
    41  subject  to this act. Provided that if the previous legal regulated rent
    42  was less than three hundred dollars  the  total  increase  shall  be  as
    43  calculated  above plus one hundred dollars per month. Provided, further,
    44  that if the previous legal regulated rent was  at  least  three  hundred
    45  dollars  and  no  more  than  five hundred dollars in no event shall the
    46  total increase pursuant to this subdivision be  less  than  one  hundred
    47  dollars  per  month.  Such  increase  shall  be in lieu of any allowance
    48  authorized for the one or two year renewal component thereof, but  shall
    49  be  in  addition  to any other increases authorized pursuant to this act
    50  including an adjustment based upon [a major capital improvement,  or]  a
    51  substantial  modification  or increase of dwelling space or services, or
    52  installation of new  equipment  or  improvements  or  new  furniture  or
    53  furnishings  provided  in  or  to  the housing accommodation pursuant to
    54  section six of this act.  The increase authorized  in  this  subdivision
    55  may not be implemented more than one time in any calendar year, notwith-
    56  standing the number of vacancy leases entered into in such year.
        A. 11312                            7
     1    §  9.  Section  26-403.2 of the administrative code of the city of New
     2  York, as added by chapter 116 of the laws of 1997, is amended to read as
     3  follows:
     4    §  26-403.2  Increase in maximum collectable rent. Notwithstanding any
     5  provision of this law to the contrary in  the  case  where  all  tenants
     6  occupying  the  housing  accommodation  on  the  effective  date of this
     7  section have vacated the housing accommodation and a  family  member  of
     8  such  vacating  tenant or tenants is entitled to and continues to occupy
     9  the housing accommodation subject to the protections  of  this  law,  if
    10  such accommodation continues to be subject to this law after such family
    11  member  vacates, on the occurrence of such vacancy the maximum collecta-
    12  ble rent shall be increased by a sum equal  to  the  allowance  then  in
    13  effect for vacancy leases for housing accommodations covered by the rent
    14  stabilization  law  of nineteen hundred sixty-nine, including the amount
    15  allowed by paragraph five-a of subdivision c of section 26-511  of  such
    16  law.  This increase shall be in addition to any other increases provided
    17  for in this law including an adjustment  based  upon  [a  major  capital
    18  improvement, or] a substantial increase or decrease in dwelling space or
    19  a  change  in the services, furniture, furnishings or equipment provided
    20  in the housing accommodation, pursuant to section 26-405 of this law and
    21  shall be applicable in like manner to each second subsequent succession.
    22    § 10. Subparagraph (c) of paragraph 1  of  subdivision  g  of  section
    23  26-405  of the administrative code of the city of New York is amended to
    24  read as follows:
    25    (c) the ratio of the sales price to the annual  gross  income  of  the
    26  property,  with  consideration given to the total amount of rent adjust-
    27  ments previously granted,  exclusive  of  rent  adjustments  because  of
    28  changes  in  dwelling  space, services, furniture, furnishings or equip-
    29  ment, [major capital improvements,] or substantial rehabilitation;
    30    § 11. Subparagraphs (g), (h), (i), (j), (k), (l), (m), (n) and (o)  of
    31  paragraph  1  of  subdivision  g of section 26-405 of the administrative
    32  code of the city of New York, subparagraph (g) as amended by section  31
    33  of part A of chapter 20 of the laws of 2015, subparagraph (k) as amended
    34  by  chapter 749 of the laws of 1990, and clause 7 of subparagraph (n) as
    35  amended by local law number 76 of the city of  New  York  for  the  year
    36  2005, are amended to read as follows:
    37    (g)  [There  has  been  since  July first, nineteen hundred seventy, a
    38  major capital improvement required for the  operation,  preservation  or
    39  maintenance  of the structure. An adjustment under this subparagraph (g)
    40  for any order of the commissioner issued after the effective date of the
    41  rent act of 2015 shall be in an amount sufficient to amortize  the  cost
    42  of the improvements pursuant to this subparagraph (g) over an eight-year
    43  period  for  buildings  with  thirty-five  or fewer units or a nine year
    44  period for buildings with more than thiry-five units, or
    45    (h)] There have been since March first, nineteen  hundred  fifty-nine,
    46  in  structures  containing  more than four housing accommodations, other
    47  improvements made with the express consent of the tenants  in  occupancy
    48  of  at  least  seventy-five  per  centum  of the housing accommodations;
    49  provided, however, that whenever the city  rent  agency  has  determined
    50  that  the improvements proposed were part of a plan designed for overall
    51  improvement of the structure or increases in services, it may  authorize
    52  increases  in maximum rents for all housing accommodations affected upon
    53  the express consent of the tenants in occupancy of  at  least  fifty-one
    54  per  centum  of the housing accommodations, and provided further that no
    55  adjustment granted hereunder shall exceed fifteen per centum unless  the
        A. 11312                            8
     1  tenants  have  agreed  to  a  higher  percentage  of increase, as herein
     2  provided; or
     3    [(i)]  (h)  There has been, since March first, nineteen hundred fifty-
     4  nine, a subletting without written  consent  from  the  landlord  or  an
     5  increase  in  the  number  of adult occupants who are not members of the
     6  immediate family of the tenant, and the landlord has  not  been  compen-
     7  sated  therefor  by  adjustment of the maximum rent by lease or order of
     8  the city rent agency or pursuant to the state rent act  or  the  federal
     9  act; or
    10    [(j)]  (i) The presence of unique or peculiar circumstances materially
    11  affecting the maximum rent has resulted  in  a  maximum  rent  which  is
    12  substantially lower than the rents generally prevailing in the same area
    13  for substantially similar housing accommodations.
    14    [(k)  The landlord has incurred, since January first, nineteen hundred
    15  seventy, in connection with and in addition to a concurrent major  capi-
    16  tal  improvement  pursuant  to subparagraph (g) of this paragraph, other
    17  expenditures to improve, restore or preserve the quality of  the  struc-
    18  ture.  An  adjustment  under  this subparagraph shall be granted only if
    19  such improvements represent an expenditure equal to  at  least  ten  per
    20  centum of the total operating and maintenance expenses for the preceding
    21  year.  An adjustment under this subparagraph shall be in addition to any
    22  adjustment granted for the  concurrent  major  capital  improvement  and
    23  shall  be  in  an amount sufficient to amortize the cost of the improve-
    24  ments pursuant to this subparagraph over a seven-year period.
    25    (l)] (j) (1) The actual labor expenses currently  incurred  or  to  be
    26  incurred (pursuant to a collective agreement or other obligation actual-
    27  ly  entered  into  by  the  landlord)  exceed  the provision for payroll
    28  expenses in the current applicable  operating  and  maintenance  expense
    29  allowance  under  subdivision a of this section. No application pursuant
    30  to this subparagraph may be granted within one year from the granting of
    31  an adjustment in maximum rent pursuant to this  subparagraph  [(l)],  or
    32  pursuant  to  subparagraph  (a) of this paragraph. Any rent increase the
    33  applicant would be entitled to,  or  such  portion  thereof,  shall  not
    34  exceed  a  total  increase of seven and one-half per centum per annum of
    35  the maximum rent as provided in paragraph five of subdivision a of  this
    36  section.
    37    (2)  Any  adjustment  in  the  maximum  rents pursuant hereto shall be
    38  subject to:
    39    (i) The adjustment in maximum rent for any twelve-month period for any
    40  housing accommodation shall not exceed four percent of the maximum  rent
    41  in effect on December thirty-first, nineteen hundred seventy-three.
    42    (ii)  Where  the  increase  in  labor  costs compensable herein is the
    43  result of an industry-wide collective bargaining agreement or a specific
    44  agreement in anticipation of, or subsequent to, an industry-wide collec-
    45  tive bargaining agreement,  the  adjustment  shall  be  in  such  amount
    46  (subject  to the above limitation) that the increased rental income from
    47  January first, nineteen hundred seventy-four to  December  thirty-first,
    48  nineteen hundred seventy-six shall reflect the increased labor costs for
    49  the period from April thirtieth, nineteen hundred seventy-three to April
    50  thirtieth, nineteen hundred seventy-six.
    51    (3)  For  the purpose of this subparagraph [(l)] the increase in labor
    52  costs shall be the amount by which  the  labor  costs  (a)  actually  in
    53  effect and paid, or (b) actually in effect and paid or payable and fixed
    54  and  determined  pursuant  to agreement on the date of the filing of the
    55  application and projected over the period ending April thirtieth,  nine-
    56  teen hundred seventy-six, exceed the labor costs for the twelve calendar
        A. 11312                            9
     1  months immediately preceding the last day of the month in which the wage
     2  agreement became effective.
     3    (4)  Notwithstanding  any other provision of this chapter, the adjust-
     4  ment pursuant to this subparagraph shall be collectible upon  the  land-
     5  lord's  filing  of  a  report  with the city rent agency, subject to the
     6  provisions of subparagraph (e) of paragraph two of subdivision a of this
     7  section.
     8    (5) No increase in the maximum rent for any housing accommodation  may
     9  be  granted under this subparagraph [(l)] if on the date when the appli-
    10  cation is sought to be filed, less than the full term of such  agreement
    11  has  elapsed  since the date of the filing of the last prior application
    12  for an increase with respect to such property  under  this  subparagraph
    13  [(l)], which application resulted in the granting of an increase. Where,
    14  however,  the  landlord  establishes the existence of unique or peculiar
    15  circumstances affecting an increase in labor costs for the property, the
    16  agency may accept such application where it determines that such accept-
    17  ance is not inconsistent with the purposes of this local law.
    18    (6) The increase authorized  herein  shall  be  apportioned  equitably
    19  among  all  the  housing  accommodations  in the property whether or not
    20  subject to control under this chapter.
    21    [(m)] (k) Where the rehabilitation or improvement of  sub-standard  or
    22  deteriorated  housing  accommodations  has been financed under a govern-
    23  mental program providing assistance through loans, loan insurance or tax
    24  abatement or has been undertaken under  another  rehabilitation  program
    25  not so financed but approved by the commissioner.
    26    [(n)](l)(1) The city rent agency shall hereafter promulgate in January
    27  of each year;
    28    (i)  findings  regarding the price increase or decrease, respectively,
    29  for all types of heating fuel, including numbers two, four and six  home
    30  heating oils, utility supplied steam, gas, electricity and coal, togeth-
    31  er  with the sales and excise taxes thereon, on December thirty-first as
    32  compared to the January first in any year; and
    33    (ii) standards for consumption of heating fuel, which shall be no more
    34  than two hundred twenty-five gallons per year per room commencing  Janu-
    35  ary first, nineteen hundred eighty-one, for buildings using heating oils
    36  for  heat with comparable unit limitations to be established by the city
    37  rent agency for utility supplied steam, gas, electricity, coal  and  any
    38  other types of heating systems, provided that such consumption standards
    39  for heating fuels shall be reduced by five gallons per room per year for
    40  heating  oils  and  a  comparable amount for other heating fuels for the
    41  next succeeding year and ten gallons per room per year for heating  oils
    42  and a comparable amount for other heating fuels for two succeeding years
    43  thereafter.
    44    Such findings and consumption standards shall be published in the City
    45  Record.
    46    (2) To obtain a rental adjustment pursuant to this subparagraph [(n)],
    47  the  landlord shall file a report with the agency on forms prescribed by
    48  the agency and shall:
    49    (i) certify the amount of heating fuel consumed in the  calendar  year
    50  immediately prior to the filing of the report;
    51    (ii) state the type of fuel used and the number of rooms in the build-
    52  ing;
    53    (iii)  certify that (a) all essential services required to be provided
    54  have been and will continue to be maintained and (b) there has  been  no
    55  rent  reduction order issued pursuant to this chapter based on the land-
        A. 11312                           10
     1  lord's failure to provide heat or hot  water  during  the  prior  twelve
     2  months;
     3    (iv)  certify  on  information  and belief, in order to qualify for an
     4  additional rent increase pursuant to this subparagraph [(n)],  that  for
     5  an  individual  housing  accommodation,  if the maximum rent collectible
     6  pursuant to paragraph five of subdivision a of this section plus  actual
     7  rent adjustments pursuant to this subparagraph [(n)] and such additional
     8  rent  increase,  is  equal  to  or  exceeds the maximum rent established
     9  pursuant to paragraphs three and four of subdivision a of  this  section
    10  plus  the  amount  calculated  pursuant to subitem (i) of item three and
    11  subitem (i) of item four of this subparagraph [(n)], each  to  be  allo-
    12  cated  to  such  housing  accommodation pursuant to subitem (ii) of item
    13  four of this subparagraph [(n)], that the landlord will not  be  earning
    14  an  amount  in  excess of the statutory return specified in subparagraph
    15  (a) of paragraph one of subdivision g of this section  after  collection
    16  of  a rent increase pursuant to this subparagraph [(n)], with respect to
    17  a building or buildings serviced by a single heating plant;
    18    (v) report any funds received with respect  to  the  housing  accommo-
    19  dations  from  any governmental grant program compensating such landlord
    20  for fuel price increases during the period for which  an  adjustment  is
    21  obtained pursuant to this subparagraph [(n)];
    22    (vi) provide such other information as the agency may require.
    23    (3)  Rent adjustments for controlled housing accommodations for annual
    24  heating fuel cost increases  or  decreases  experienced  after  December
    25  thirty-first,  nineteen  hundred  seventy-nine,  shall  be determined as
    26  follows:
    27    (i) the increase or decrease in heating fuel prices found by the agen-
    28  cy for that year shall be multiplied by the actual consumption,  not  to
    29  exceed  that year's consumption standard established pursuant to subitem
    30  (ii) of item one of this subparagraph; and
    31    (ii) seventy-five percentum of such amount shall  be  allocated  among
    32  all rental space in the building, including commercial, professional and
    33  similar  facilities,  provided,  for  the  purposes of this subparagraph
    34  [(n)], that living rooms, kitchens over fifty-nine square feet  in  area
    35  and  bedrooms  shall  be considered rooms and that bathrooms, foyers and
    36  kitchenettes shall not be considered rooms.
    37    (4) Rent adjustments for controlled housing accommodations for heating
    38  fuel cost increases or decreases experienced from April ninth,  nineteen
    39  hundred seventy-nine, through and including December thirty-first, nine-
    40  teen hundred seventy-nine, shall be determined as follows:
    41    (i) the increase or decrease in heating fuel prices found by the agen-
    42  cy  for that period shall be multiplied by seventy-five percentum of the
    43  actual heating fuel consumption during the period  from  January  first,
    44  nineteen  hundred  seventy-nine,  through and including December thirty-
    45  first, nineteen hundred seventy-nine, which consumption shall not exceed
    46  seventy-five percentum of that year's consumption  standard  established
    47  by the agency; and
    48    (ii)  such  amount  shall  be  allocated among all rental space in the
    49  building, including commercial,  professional  and  similar  facilities,
    50  provided,  for  the  purposes  of  this  subparagraph [(n)], that living
    51  rooms, kitchens over fifty-nine square feet in area and  bedrooms  shall
    52  be  considered  rooms  and that bathrooms, foyers and kitchenettes shall
    53  not be considered rooms.
    54    The city rent agency shall promulgate findings for heating fuel  price
    55  increases or decreases and standards for consumption for the periods set
    56  forth in this item four thirty days after this local law is enacted. The
        A. 11312                           11
     1  standard for consumption shall be no more than seventy-five percentum of
     2  two hundred thirty gallons per room for buildings using heating oils for
     3  heat with comparable unit limitations to be established by the city rent
     4  agency  for utility supplied steam, gas, electricity, coal and any other
     5  types of heating systems.
     6    (5) A landlord who files a report pursuant to  this  subparagraph  and
     7  who  falsely certifies shall not be eligible to collect any rent adjust-
     8  ment pursuant to this subparagraph for two years  following  a  determi-
     9  nation  of  a  false  certification  and,  in  addition, any adjustments
    10  obtained pursuant to this subparagraph for up to two years prior to such
    11  determination shall not be collectible for that same  two  year  period.
    12  Such  landlord shall also be subject to any additional penalties imposed
    13  by law.
    14    (6) A landlord annually may file a report pursuant  to  this  subpara-
    15  graph  [(n)]  after  promulgation  by  the  agency  of  the findings and
    16  consumption standards set forth in item one of this subparagraph  [(n)].
    17  A rent adjustment pursuant to such report shall be prospectively collec-
    18  tible  upon  the  landlord's  serving  and  filing the report, provided,
    19  however, that if a landlord files such report within sixty days  of  the
    20  promulgation  of  such  findings  and  consumption  standards, such rent
    21  adjustment shall be retroactive to and shall  be  effective  as  of  the
    22  January first of the year in which the report is filed.
    23    (7)  A  landlord demanding or collecting a rent adjustment pursuant to
    24  this subparagraph [(n)] shall at  the  time  of  either  the  demand  or
    25  collection  issue to the tenant either a rent bill or receipt separately
    26  setting forth the amount of the adjustment pursuant to this subparagraph
    27  [(n)]  and  the  amount  of  the  maximum  rent  otherwise  demanded  or
    28  collected.    If  the tenant has been issued a valid senior citizen rent
    29  exemption order or a valid disability rent exemption  order,  the  owner
    30  shall  also separately state the amount payable by the senior citizen or
    31  person with a disability after the exemption.
    32    (8) In the event that a rent reduction order is  issued  by  the  city
    33  rent  agency  based  upon  the landlord's failure to provide heat or hot
    34  water to housing accommodations for which the landlord is  collecting  a
    35  rent adjustment pursuant to this subparagraph [(n)], the rent adjustment
    36  shall  not  be collected during the time such rent reduction order is in
    37  effect and for twelve months following the date of  the  restoration  of
    38  the  rent  reduction. In addition, the landlord shall not be eligible to
    39  collect any subsequent rent adjustment  pursuant  to  this  subparagraph
    40  [(n)]  until  twelve months following the date of the restoration of the
    41  rent reduction.
    42    (9) In the event that the city rent agency promulgates a finding of  a
    43  price  decrease,  if  any  landlord  who  has obtained a rent adjustment
    44  pursuant to this subparagraph [(n)] does not file a report  for  a  rent
    45  adjustment  pursuant to this subparagraph [(n)] within sixty days of the
    46  promulgation of such findings, then all rent adjustments obtained pursu-
    47  ant to this subparagraph [(n)] shall not be collectible for a period  of
    48  twelve months.
    49    (10)  Any rent adjustment obtained pursuant to this subparagraph [(n)]
    50  shall not be included in the maximum rent established pursuant to  para-
    51  graph four or five of subdivision (a) of this section.
    52    (11)  The  city  rent  agency  shall have the power to promulgate such
    53  regulations as it may consider necessary or convenient to implement  and
    54  administer  the  provisions  of this subparagraph [(n)]. The regulations
    55  shall also require that any rent adjustment  granted  pursuant  to  this
    56  subparagraph  [(n)]  be  reduced  by an amount equal to any governmental
        A. 11312                           12
     1  grant received by the landlord compensating the landlord  for  any  fuel
     2  price  increases, but not required by the city, the agency or any grant-
     3  ing government entity  to  be  expended  for  fuel  related  repairs  or
     4  improvements.
     5    [(o)]  (m)  (1) There has been an increase in heating and heating fuel
     6  expenditures in a property resulting from a city-wide  rise  in  heating
     7  fuel  costs such that the verifiable expenditures for heating or heating
     8  fuel in a property for nineteen hundred seventy-four exceeds the verifi-
     9  able expenditures for such  heating  or  heating  fuel  during  nineteen
    10  hundred seventy-three.
    11    (2) To obtain a rental adjustment pursuant to this subparagraph [(o)],
    12  the  landlord  must  certify that he or she is presently maintaining all
    13  essential services required to be furnished with respect to the  housing
    14  accommodations  covered  by  such certification, and that he or she will
    15  continue to so maintain such essential services for the  period  of  any
    16  such adjustment.
    17    (3) To obtain a rental adjustment pursuant to this subparagraph [(o)],
    18  the  landlord must certify on information and belief that he or she will
    19  not be earning an amount in excess of the statutory return specified  in
    20  subparagraph  (a)  of  this  paragraph  [one  of  subdivision  g of this
    21  section] after collection of such rental adjustment, with respect to the
    22  building or buildings serviced by a single heating plant; and where  the
    23  building,  or  buildings  serviced  by  a single heating plant, contains
    24  forty-nine or fewer housing accommodations, the  landlord  must  certify
    25  that  the  amount expended directly for heating or heating fuel in nine-
    26  teen hundred seventy-four equalled or exceeded ten per cent of the total
    27  rental income which  was  derived  from  the  property  during  nineteen
    28  hundred  seventy-four; and, where the building, or buildings serviced by
    29  a single heating plant, contains fifty or  more  housing  accommodations
    30  the  landlord must certify that the amount expended directly for heating
    31  or heating fuel in nineteen hundred seventy-four  equalled  or  exceeded
    32  seven  and  one-half  percentum  of  the  total  rental income which was
    33  derived from the property during nineteen hundred seventy-four.
    34    (4) The total rental adjustments for a property  to  be  allocated  or
    35  deemed  allocated  pursuant  to this subparagraph [(o)] shall not exceed
    36  one-half of the gross amount by which the total verifiable  expenditures
    37  for  heating  or  heating fuel for nineteen hundred seventy-four exceeds
    38  the total verifiable expenditures for such heating or heating  fuel  for
    39  nineteen hundred seventy-three.
    40    (5)  Such  total rental adjustments shall be allocated or deemed allo-
    41  cated pursuant to this subparagraph [(o)] to all housing  accommodations
    42  subject to this chapter, to all other housing accommodations, and to all
    43  commercial,  professional  and  similar facilities in or associated with
    44  the property in a manner to be determined by the  agency.  In  no  event
    45  shall any adjustment in maximum rent pursuant to this subparagraph [(o)]
    46  for  any housing accommodations subject to this chapter exceed a monthly
    47  increase of two dollars per room, as defined by item eight below. In any
    48  apartment containing five or more rooms, any increase shall  not  exceed
    49  the total of nine dollars.
    50    (6) Any adjustment pursuant to this subparagraph [(o)] shall be effec-
    51  tive  for  all or part of the period July first, nineteen hundred seven-
    52  ty-five  through  June  thirtieth,  nineteen  hundred  seventy-six.  Any
    53  adjustment  pursuant  to this subparagraph shall automatically expire no
    54  later than June thirtieth, nineteen hundred seventy-six.
    55    (7) The rental increases provided for herein shall  be  effective  and
    56  collectible upon the landlord's filing a report with the agency on forms
        A. 11312                           13
     1  prescribed  by  the agency and upon giving such notice to the tenants as
     2  the agency shall prescribe, subject to adjustments  upon  order  of  the
     3  agency.
     4    (8)  In  determining  the  amount  of  an  adjustment allocation of an
     5  adjustment pursuant to  this  subparagraph  [(o)],  only  living  rooms,
     6  kitchens  over fifty-nine square feet in area, dining rooms and bedrooms
     7  shall be considered rooms; bathrooms, foyers, and kitchenettes shall not
     8  be considered rooms.
     9    § 12. Subdivision a of section 26-407 of the  administrative  code  of
    10  the city of New York is amended to read as follows:
    11    a.  Notwithstanding  any  provisions  of  this chapter, any labor cost
    12  pass-along rent increase requested of, or received from, any  tenant  on
    13  or  after  July  first,  nineteen  hundred  seventy-two, pursuant to the
    14  provisions of subparagraph [(1)] (i) of paragraph one of  subdivision  g
    15  of  section  26-405  of  this  title,  shall not exceed the maximum rent
    16  adjustment as provided under this chapter after the  effective  date  of
    17  this section.
    18    §  13.  Paragraphs 5-a and 6 of subdivision c of section 26-511 of the
    19  administrative code of the city of New York, paragraph 5-a as amended by
    20  section 16-a of part A of chapter 20 of the laws of 2015 and paragraph 6
    21  as amended by section 29 of part A of chapter 20 of the  laws  of  2015,
    22  are amended to read as follows:
    23    (5-a)  provides  that,  notwithstanding any provision of this chapter,
    24  the legal regulated rent for any vacancy lease entered  into  after  the
    25  effective  date  of  this  paragraph shall be as hereinafter provided in
    26  this paragraph. The previous  legal  regulated  rent  for  such  housing
    27  accommodation  shall  be  increased by the following: (i) if the vacancy
    28  lease is for a term of two years, twenty percent of the  previous  legal
    29  regulated  rent;  or (ii) if the vacancy lease is for a term of one year
    30  the increase shall be twenty percent of  the  previous  legal  regulated
    31  rent  less  an  amount  equal to the difference between (a) the two year
    32  renewal lease guideline promulgated by the guidelines board of the  city
    33  of New York applied to the previous legal regulated rent and (b) the one
    34  year  renewal lease guideline promulgated by the guidelines board of the
    35  city of New York applied to the previous legal regulated rent.  However,
    36  where  the amount charged and paid by the prior tenant pursuant to para-
    37  graph fourteen of this subdivision, was less than  the  legal  regulated
    38  rent,  such  increase to the legal regulated rent shall not exceed: five
    39  percent of the previous legal regulated rent if the last  vacancy  lease
    40  commenced  less  than  two  years ago; ten percent of the previous legal
    41  regulated rent if the last vacancy lease commenced less than three years
    42  ago; fifteen percent of the previous legal regulated rent  if  the  last
    43  vacancy  lease commenced less than four years ago; twenty percent of the
    44  previous legal regulated rent if the last vacancy lease  commenced  four
    45  or  more  years  ago.  In  addition, if the legal regulated rent was not
    46  increased with respect to such  housing  accommodation  by  a  permanent
    47  vacancy  allowance  within eight years prior to a vacancy lease executed
    48  on or after the effective date of this paragraph,  the  legal  regulated
    49  rent  may be further increased by an amount equal to the product result-
    50  ing from multiplying such previous legal regulated rent by six-tenths of
    51  one percent and further multiplying the amount of rent increase  result-
    52  ing  therefrom by the greater of (A) the number of years since the impo-
    53  sition of the last permanent vacancy allowance, or (B) if the  rent  was
    54  not  increased by a permanent vacancy allowance since the housing accom-
    55  modation became subject to this chapter, the number of years  that  such
    56  housing accommodation has been subject to this chapter. Provided that if
        A. 11312                           14
     1  the  previous  legal  regulated rent was less than three hundred dollars
     2  the total increase shall be as calculated above plus one hundred dollars
     3  per month. Provided, further, that if the previous legal regulated  rent
     4  was at least three hundred dollars and no more than five hundred dollars
     5  in  no event shall the total increase pursuant to this paragraph be less
     6  than one hundred dollars per month. Such increase shall be  in  lieu  of
     7  any allowance authorized for the one or two year renewal component ther-
     8  eof, but shall be in addition to any other increases authorized pursuant
     9  to  this  chapter  including  an  adjustment based upon [a major capital
    10  improvement, or] a substantial  modification  or  increase  of  dwelling
    11  space  or  services, or installation of new equipment or improvements or
    12  new furniture or furnishings provided in or to the housing accommodation
    13  pursuant to this section. The increase authorized in this paragraph  may
    14  not  be  implemented  more  than one time in any calendar year, notwith-
    15  standing the number of vacancy leases entered into in such year.
    16    (6) provides criteria whereby the commissioner may act  upon  applica-
    17  tions  by  owners  for  increases  in  excess  of the level of fair rent
    18  increase established under this law provided, however, that such  crite-
    19  ria shall provide [(a)], as to hardship applications, for a finding that
    20  the level of fair rent increase is not sufficient to enable the owner to
    21  maintain  approximately  the same average annual net income (which shall
    22  be computed without regard to debt service, financing costs  or  manage-
    23  ment  fees)  for the three year period ending on or within six months of
    24  the date of an application pursuant to such criteria  as  compared  with
    25  annual  net income, which prevailed on the average over the period nine-
    26  teen hundred sixty-eight through nineteen hundred seventy,  or  for  the
    27  first three years of operation if the building was completed since nine-
    28  teen  hundred  sixty-eight  or  for the first three fiscal years after a
    29  transfer of title to a new owner provided the new owner can establish to
    30  the satisfaction of the commissioner that he or she  acquired  title  to
    31  the  building as a result of a bona fide sale of the entire building and
    32  that the new owner is unable to obtain requisite records for the  fiscal
    33  years  nineteen  hundred  sixty-eight  through  nineteen hundred seventy
    34  despite diligent efforts to obtain same from predecessors in  title  and
    35  further  provided that the new owner can provide financial data covering
    36  a minimum of six years under his or  her  continuous  and  uninterrupted
    37  operation  of  the building to meet the three year to three year compar-
    38  ative test periods herein provided[; and (b) as to  completed  building-
    39  wide  major  capital  improvements, for a finding that such improvements
    40  are deemed depreciable under the Internal Revenue Code and that the cost
    41  is to be amortized over an eight-year period for a building  with  thir-
    42  ty-five  or  fewer  housing  accommodations, or a nine-year period for a
    43  building with more than  thirty-five  housing  accommodations,  for  any
    44  determination  issued  by  the division of housing and community renewal
    45  after the effective date of the  rent  act  of  2015,  based  upon  cash
    46  purchase price exclusive of interest or service charges].  Notwithstand-
    47  ing  anything  to  the  contrary  contained herein, no hardship increase
    48  granted pursuant to this paragraph shall, when added to the annual gross
    49  rents, as determined by the commissioner, exceed the  sum  of,  (i)  the
    50  annual  operating expenses, (ii) an allowance for management services as
    51  determined by  the  commissioner,  (iii)  actual  annual  mortgage  debt
    52  service  (interest  and  amortization)  on its indebtedness to a lending
    53  institution, an insurance company, a retirement  fund  or  welfare  fund
    54  which is operated under the supervision of the banking or insurance laws
    55  of  the  state of New York or the United States, and (iv) eight and one-
    56  half percent of that portion of the fair market value  of  the  property
        A. 11312                           15
     1  which  exceeds  the unpaid principal amount of the mortgage indebtedness
     2  referred to in subparagraph (iii) of this paragraph. Fair  market  value
     3  for  the  purposes of this paragraph shall be six times the annual gross
     4  rent.  The  collection  of  any  increase in the stabilized rent for any
     5  apartment pursuant to this paragraph shall not exceed six percent in any
     6  year from the effective date of the order granting the increase over the
     7  rent set forth in the schedule of gross rents,  with  collectability  of
     8  any  dollar excess above said sum to be spread forward in similar incre-
     9  ments and added to the stabilized rent as established or set  in  future
    10  years;
    11    §  14.  Subdivision  f of section 26-512 of the administrative code of
    12  the city of New York, as added by chapter 116 of the laws  of  1997,  is
    13  amended to read as follows:
    14    f.  Notwithstanding  any  provision of this law to the contrary in the
    15  case where all tenants named in a lease have permanently vacated a hous-
    16  ing accommodation and a family member of such tenant or tenants is enti-
    17  tled to and executes a renewal lease for the  housing  accommodation  if
    18  such accommodation continues to be subject to this law after such family
    19  member  vacates,  on  the occurrence of such vacancy the legal regulated
    20  rent shall be increased by a sum equal to the allowance then  in  effect
    21  for vacancy leases, including the amount allowed by paragraph [(five-a)]
    22  five-a  of  subdivision  c  of section 26-511 of this law. Such increase
    23  shall be in addition to any other increases provided  for  in  this  law
    24  including  an  adjustment based upon [a major capital improvement, or] a
    25  substantial modification or increase of dwelling space or  services,  or
    26  installation  of  new  equipment  or  improvements  or  new furniture or
    27  furnishings provided in or to  the  housing  accommodation  pursuant  to
    28  section  26-511  of  this  law and shall be applicable in like manner to
    29  each second subsequent succession.
    30    § 15. This act shall take effect immediately; provided:
    31    (a) that sections three, four, and five of this  act  shall  apply  to
    32  taxable years beginning on and after January 1, 2019;
    33    (b)  that  the amendments to sections 4 and 5 of the emergency housing
    34  rent control law made by section six of this act  shall  expire  on  the
    35  same  date  as  such  law expires and shall not affect the expiration of
    36  such law as provided in subdivision 2 of section 1 of chapter 274 of the
    37  laws of 1946;
    38    (c) that the amendments to sections 6 and 10 of section 4 of the emer-
    39  gency tenant protection act of 1974 made by sections seven and eight  of
    40  this act shall expire on the same date as such act expires and shall not
    41  affect  the  expiration of such act as provided in section 17 of chapter
    42  576 of the laws of 1974;
    43    (d) that the amendments to section 26-511 of chapter 4 of title 26  of
    44  the administrative code of the city of New York made by section thirteen
    45  of  this act shall expire on the same date as such law expires and shall
    46  not affect the expiration of such law as provided under  section  26-520
    47  of such law; and
    48    (e)  that the amendments to section 26-512 of chapter 4 of title 26 of
    49  the administrative code of the city of New York made by section fourteen
    50  of this act shall expire on the same date as such law expires and  shall
    51  not  affect  the expiration of such law as provided under section 26-520
    52  of such law.
    53    (f) Effective immediately, the addition, amendment  and/or  repeal  of
    54  any  rule  or regulation necessary for the implementation of this act on
    55  its effective date are authorized and directed to be made and  completed
    56  on or before such effective date.