Bill Text: NY S03437 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to the adjustment of maximum allowable rent and requires the division of housing and community renewal to confirm improvements have been made prior to the approval of rent increases.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S03437 Detail]
Download: New_York-2019-S03437-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3437 2019-2020 Regular Sessions IN SENATE February 7, 2019 ___________ Introduced by Sen. MYRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four and the emer- gency housing rent control law, in relation to the adjustment of maxi- mum allowable rent and requiring the division of housing and community renewal to confirm improvements have been made prior to the approval of rent increases The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraphs (e) and (g) of paragraph 1 of subdivision g 2 of section 26-405 of the administrative code of the city of New York, 3 subparagraph (e) as amended by section 15 of part B of chapter 97 of the 4 laws of 2011 and subparagraph (g) as amended by section 31 of part A of 5 chapter 20 of the laws of 2015, are amended and a new paragraph 8 is 6 added to read as follows: 7 (e) The landlord and tenant by mutual voluntary written agreement 8 agree to a substantial increase or decrease in dwelling space or a 9 change in the services, furniture, furnishings or equipment provided in 10 the housing accommodations. An adjustment under this subparagraph shall 11 be equal to one-fortieth, in the case of a building with thirty-five or 12 fewer housing accommodations, or one-sixtieth, in the case of a building 13 with more than thirty-five housing accommodations where such adjustment 14 takes effect on or after September twenty-fourth, two thousand eleven, 15 of the total cost incurred by the landlord in providing such modifica- 16 tion or increase in dwelling space, services, furniture, furnishings or 17 equipment, including the cost of installation, but excluding finance 18 charges, provided further that an owner who is entitled to a rent 19 increase pursuant to this subparagraph shall not be entitled to a 20 further rent increase based upon the installation of similar equipment, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04447-01-9S. 3437 2 1 or new furniture or furnishings within the useful life of such new 2 equipment, or new furniture or furnishings. An owner entitled to a rent 3 increase pursuant to this subparagraph shall only be entitled to such 4 increase for a period of five years from the date of the adjustment. The 5 owner shall give written notice to the city rent agency of any such 6 adjustment pursuant to this subparagraph; or 7 (g) There has been since July first, nineteen hundred seventy, a major 8 capital improvement required for the operation, preservation or mainte- 9 nance of the structure. An adjustment under this subparagraph [(g) for10any order of the commissioner issued after the effective date of the11rent act of 2015 shall be in an amount sufficient to amortize the cost12of the improvements pursuant to this subparagraph (g) over an eight-year13period for buildings with thirty-five or fewer units or a nine year14period for buildings with more than thiry-five units] shall only be in 15 effect for a period of five years from the date of such adjustment, or 16 (8) Before ordering any adjustment in rent pursuant to subparagraphs 17 (e) and (g) of paragraph one of this subdivision, the division of hous- 18 ing and community renewal shall require the owner of the property to 19 file a statement with the division containing information outlining the 20 scope of the work and the date of completion of such work. Upon receipt 21 of such statement, the division of housing and community renewal shall 22 inspect the property to ensure the specified work has been completed. No 23 increase shall be collectible under subparagraphs (e) and (g) of para- 24 graph one of this subdivision where the division of housing and communi- 25 ty renewal has determined the specified work has not been completed. 26 § 2. Paragraphs 6 and 13 of subdivision c of section 26-511 of the 27 administrative code of the city of New York, paragraph 6 as amended by 28 section 29 of part A of chapter 20 of the laws of 2015 and paragraph 13 29 as amended by section 16 of part B of chapter 97 of the laws of 2011, 30 are amended and two new paragraphs 6-b and 15 are added to read as 31 follows: 32 (6) provides criteria whereby the commissioner may act upon applica- 33 tions by owners for increases in excess of the level of fair rent 34 increase established under this law provided, however, that such crite- 35 ria shall provide [(a)] as to hardship applications, for a finding that 36 the level of fair rent increase is not sufficient to enable the owner to 37 maintain approximately the same average annual net income (which shall 38 be computed without regard to debt service, financing costs or manage- 39 ment fees) for the three year period ending on or within six months of 40 the date of an application pursuant to such criteria as compared with 41 annual net income, which prevailed on the average over the period nine- 42 teen hundred sixty-eight through nineteen hundred seventy, or for the 43 first three years of operation if the building was completed since nine- 44 teen hundred sixty-eight or for the first three fiscal years after a 45 transfer of title to a new owner provided the new owner can establish to 46 the satisfaction of the commissioner that he or she acquired title to 47 the building as a result of a bona fide sale of the entire building and 48 that the new owner is unable to obtain requisite records for the fiscal 49 years nineteen hundred sixty-eight through nineteen hundred seventy 50 despite diligent efforts to obtain same from predecessors in title and 51 further provided that the new owner can provide financial data covering 52 a minimum of six years under his or her continuous and uninterrupted 53 operation of the building to meet the three year to three year compar- 54 ative test periods herein provided[; and (b) as to completed building-55wide major capital improvements, for a finding that such improvements56are deemed depreciable under the Internal Revenue Code and that the costS. 3437 3 1is to be amortized over an eight-year period for a building with thir-2ty-five or fewer housing accommodations, or a nine-year period for a3building with more than thirty-five housing accommodations, for any4determination issued by the division of housing and community renewal5after the effective date of the rent act of 2015, based upon cash6purchase price exclusive of interest or service charges]. Notwithstand- 7 ing anything to the contrary contained herein, no hardship increase 8 granted pursuant to this paragraph shall, when added to the annual gross 9 rents, as determined by the commissioner, exceed the sum of, (i) the 10 annual operating expenses, (ii) an allowance for management services as 11 determined by the commissioner, (iii) actual annual mortgage debt 12 service (interest and amortization) on its indebtedness to a lending 13 institution, an insurance company, a retirement fund or welfare fund 14 which is operated under the supervision of the banking or insurance laws 15 of the state of New York or the United States, and (iv) eight and one- 16 half percent of that portion of the fair market value of the property 17 which exceeds the unpaid principal amount of the mortgage indebtedness 18 referred to in subparagraph (iii) of this paragraph. Fair market value 19 for the purposes of this paragraph shall be six times the annual gross 20 rent. The collection of any increase in the stabilized rent for any 21 apartment pursuant to this paragraph shall not exceed six percent in any 22 year from the effective date of the order granting the increase over the 23 rent set forth in the schedule of gross rents, with collectability of 24 any dollar excess above said sum to be spread forward in similar incre- 25 ments and added to the stabilized rent as established or set in future 26 years; 27 (6-b) provides criteria whereby the commissioner may act upon applica- 28 tion by owners for increases in excess of the level of fair rent 29 increase established under this law provided, however, that as to 30 completed building-wide major capital improvements, an owner shall only 31 be entitled to a rent increase for a five year period from the date of 32 the approved increase. 33 (13) provides that an owner is entitled to a rent increase where there 34 has been a substantial modification or increase of dwelling space or an 35 increase in the services, or installation of new equipment or improve- 36 ments or new furniture or furnishings provided in or to a tenant's hous- 37 ing accommodation, on written tenant consent to the rent increase. In 38 the case of a vacant housing accommodation, tenant consent shall not be 39 required. The [permanent] increase in the legal regulated rent for the 40 affected housing accommodation shall be one-fortieth, in the case of a 41 building with thirty-five or fewer housing accommodations, or one-sixti- 42 eth, in the case of a building with more than thirty-five housing accom- 43 modations where such [permanent] increase takes effect on or after 44 September twenty-fourth, two thousand eleven, of the total cost incurred 45 by the landlord in providing such modification or increase in dwelling 46 space, services, furniture, furnishings or equipment, including the cost 47 of installation, but excluding finance charges; provided, however, the 48 increase allowable under this paragraph shall only be in effect for a 49 period of five years from the date of such increase. Provided further 50 that an owner who is entitled to a rent increase pursuant to this para- 51 graph shall not be entitled to a further rent increase based upon the 52 installation of similar equipment, or new furniture or furnishings with- 53 in the useful life of such new equipment, or new furniture or 54 furnishings. 55 (15) provides that before ordering any adjustment in rent pursuant to 56 paragraphs six-b and thirteen of this subdivision, the division of hous-S. 3437 4 1 ing and community renewal shall require the owner of the property to 2 file a statement with the division containing information outlining the 3 scope of the work and the date of completion of such work. Upon receipt 4 of such statement, the division of housing and community renewal shall 5 inspect the property to ensure the specified work has been completed. No 6 increase shall be collectible under paragraphs six-b and thirteen of 7 this subdivision where the division of housing and community renewal has 8 determined the specified work has not been completed. 9 § 3. Paragraphs 1 and 3 of subdivision d of section 6 of section 4 of 10 chapter 576 of the laws of 1974, constituting the emergency tenant 11 protection act of nineteen seventy-four, paragraph 1 as amended by 12 section 18 of part B of chapter 97 of the laws of 2011 and paragraph 3 13 as amended by section 30 of part A of chapter 20 of the laws of 2015, 14 are amended and a new paragraph 6 is added to read as follows: 15 (1) there has been a substantial modification or increase of dwelling 16 space or an increase in the services, or installation of new equipment 17 or improvements or new furniture or furnishings, provided in or to a 18 tenant's housing accommodation, on written tenant consent to the rent 19 increase. In the case of a vacant housing accommodation, tenant consent 20 shall not be required. The [permanent] increase in the legal regulated 21 rent for the affected housing accommodation shall be one-fortieth, in 22 the case of a building with thirty-five or fewer housing accommodations, 23 or one-sixtieth, in the case of a building with more than thirty-five 24 housing accommodations where such [permanent] increase takes effect on 25 or after September twenty-fourth, two thousand eleven, of the total cost 26 incurred by the landlord in providing such modification or increase in 27 dwelling space, services, furniture, furnishings or equipment, including 28 the cost of installation, but excluding finance charges; provided, 29 however, the increase allowable under this paragraph shall only be in 30 effect for a period of five years from the date of such increase. 31 Provided further that an owner who is entitled to a rent increase pursu- 32 ant to this paragraph shall not be entitled to a further rent increase 33 based upon the installation of similar equipment, or new furniture or 34 furnishings within the useful life of such new equipment, or new furni- 35 ture or furnishings. 36 (3) there has been since January first, nineteen hundred seventy-four 37 a major capital improvement required for the operation, preservation or 38 maintenance of the structure. An adjustment under this paragraph shall 39 [be in an amount sufficient to amortize the cost of the improvements40pursuant to this paragraph over an eight-year period for a building with41thirty-five or fewer housing accommodations, or a nine-year period for a42building with more than thirty-five housing accommodations, for any43determination issued by the division of housing and community renewal44after the effective date of the rent act of 2015] only be in effect for 45 a period of five years from the date of such adjustment, or 46 (6) Before ordering any adjustment in rent pursuant to paragraphs one 47 and three of this subdivision, the division of housing and community 48 renewal shall require the owner of the property to file a statement with 49 the division containing information outlining the scope of the work and 50 the date of completion of such work. Upon receipt of such statement, the 51 division of housing and community renewal shall inspect the property to 52 ensure the specified work has been completed. No increase shall be 53 collectible under paragraphs one and three of this subdivision where the 54 division of housing and community renewal has determined the specified 55 work has not been completed.S. 3437 5 1 § 4. Clauses 5 and 7 of the second undesignated paragraph of paragraph 2 (a) of subdivision 4 of section 4 of chapter 274 of the laws of 1946, 3 constituting the emergency housing rent control law, clause 5 as amended 4 by section 25 of part B of chapter 97 of the laws of 2011 and clause 7 5 as amended by section 32 of part A of chapter 20 of the laws of 2015, 6 are amended to read as follows: 7 (5) the landlord and tenant by mutual voluntary written agreement 8 agree to a substantial increase or decrease in dwelling space or a 9 change in the services, furniture, furnishings or equipment provided in 10 the housing accommodations; provided that an owner shall be entitled to 11 a rent increase where there has been a substantial modification or 12 increase of dwelling space or an increase in the services, or installa- 13 tion of new equipment or improvements or new furniture or furnishings 14 provided in or to a tenant's housing accommodation. The [permanent] 15 increase in the maximum rent for the affected housing accommodation 16 shall be one-fortieth, in the case of a building with thirty-five or 17 fewer housing accommodations, or one-sixtieth, in the case of a building 18 with more than thirty-five housing accommodations where such [permanent] 19 increase takes effect on or after September twenty-fourth, two thousand 20 eleven, of the total cost incurred by the landlord in providing such 21 modification or increase in dwelling space, services, furniture, 22 furnishings or equipment, including the cost of installation, but 23 excluding finance charges provided further that an owner who is entitled 24 to a rent increase pursuant to this clause shall not be entitled to a 25 further rent increase based upon the installation of similar equipment, 26 or new furniture or furnishings within the useful life of such new 27 equipment, or new furniture or furnishings; provided, however, the 28 increase allowable under this clause shall only be in effect for a peri- 29 od of five years from the date of such increase. The owner shall give 30 written notice to the commission of any such adjustment pursuant to this 31 clause; provided, however, before any adjustment in rent shall take 32 effect pursuant to this clause, the division of housing and community 33 renewal shall require the owner of the property to file a statement with 34 the division containing information outlining the scope of the work and 35 the date of completion of such work. Upon receipt of such statement, the 36 division of housing and community renewal shall inspect the property to 37 ensure the specified work has been completed. No increase shall be 38 collectible under this clause where the division of housing and communi- 39 ty renewal has determined the specified work has not been completed; or 40 (7) there has been since March first, nineteen hundred fifty, a major 41 capital improvement required for the operation, preservation or mainte- 42 nance of the structure; which [for any order of the commissioner issued43after the effective date of the rent act of 2015 the cost of such44improvement shall be amortized over an eight-year period for buildings45with thirty-five or fewer units or a nine year period for buildings with46more than thiry-five units,] shall only be in effect for a period of 47 five years from the date of such adjustment. Before ordering any adjust- 48 ment in rent pursuant to this clause, the division of housing and commu- 49 nity renewal shall require the owner of the property to file a statement 50 with the division containing information outlining the scope of the work 51 and the date of completion of such work. Upon receipt of such statement, 52 the division of housing and community renewal shall inspect the property 53 to ensure the specified work has been completed. No increase shall be 54 collectible under this clause where the division of housing and communi- 55 ty renewal has determined the specified work has not been completed; or 56 § 5. This act shall take effect immediately; provided that:S. 3437 6 1 (a) the amendments to section 26-405 of the city rent and rehabili- 2 tation law made by section one of this act shall remain in full force 3 and effect only as long as the public emergency requiring the regulation 4 and control of residential rents and evictions continues, as provided in 5 subdivision 3 of section 1 of the local emergency housing rent control 6 act; 7 (b) the amendments to section 26-511 of chapter 4 of title 26 of the 8 administrative code of the city of New York made by section two of this 9 act shall expire on the same date as such law expires and shall not 10 affect the expiration of such law as provided under section 26-520 of 11 such law; 12 (c) the amendments to section 6 of the emergency tenant protection act 13 of nineteen seventy-four made by section three of this act shall expire 14 on the same date as such act expires and shall not affect the expiration 15 of such act as provided in section 17 of chapter 576 of the laws of 16 1974; 17 (d) the amendments to section 4 of the emergency housing rent control 18 law made by section four of this act shall expire on the same date as 19 such law expires and shall not affect the expiration of such law as 20 provided in subdivision 2 of section 1 of chapter 274 of the laws of 21 1946.