Bill Text: NY S03693 | 2019-2020 | General Assembly | Introduced


Bill Title: Eliminates rent increase for major capital improvements.

Spectrum: Partisan Bill (Democrat 13-0)

Status: (Introduced) 2019-02-12 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S03693 Detail]

Download: New_York-2019-S03693-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          3693
                               2019-2020 Regular Sessions
                    IN SENATE
                                    February 12, 2019
                                       ___________
        Introduced  by Sen. GIANARIS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Housing, Construction  and
          Community Development
        AN  ACT  eliminating rent increases based on major capital improvements;
          to amend chapter 274 of the laws of 1946, constituting  the  emergency
          housing rent control law, the emergency tenant protection act of nine-
          teen seventy-four 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.  Legislative  findings  and  declaration of emergency. The
     2  legislature hereby finds and declares that the serious public  emergency
     3  which  led  to the enactment of the existing laws regulating residential
     4  rents and evictions continues to exist. The  legislature  further  finds
     5  that a majority of households currently occupying housing accommodations
     6  subject  to  rent  laws  are  rent-burdened; that permanent increases in
     7  rents are no longer necessary to incentivize rental property  owners  to
     8  make,  or  to compensate landlords for, necessary major capital improve-
     9  ments; that publicly funded  tax  incentives  and  other  subsidies  are
    10  available  to  rental  property owners to support major capital improve-
    11  ments; that value from major  capital  improvements  accrues  to  rental
    12  property owners through increased property values and sale prices; that,
    13  due  to  market  conditions  in  localities subject to rent laws, rental
    14  property owners are already able to realize a reasonable return on their
    15  investments in major capital  improvements  through  increased  property
    16  values and sale prices alone; and that provisions for hardship increases
    17  under  existing rent laws already ensure that rental property owners are
    18  able to operate rent regulated housing without incurring  undue  losses.
    19  The  legislature further declares and finds that a substantial number of
    20  the rent increases previously granted  for  major  capital  improvements
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02240-03-9

        S. 3693                             2
     1  were  tainted  by  inflated costs, particularly in the last seven years;
     2  that the  provision  of  permanent  rent  increases  for  major  capital
     3  improvements  in existing rent laws has resulted in exactions of unjust,
     4  unreasonable  and oppressive rents, as well as profiteering, speculation
     5  and other disruptive practices tending to produce tenant dislocation and
     6  threats to the public health, safety  and  general  welfare;  that  such
     7  results  were  contrary  to  the intent and purpose of the existing rent
     8  laws; that it is therefore necessary to amend the rent  laws  to  remove
     9  any  provision  of  a  permanent  rent increase based upon major capital
    10  improvements; and that it  is  additionally  necessary  to  repeal  rent
    11  increases  based  upon  major capital improvements that became effective
    12  within the previous seven years.
    13    § 2. (a) The division of housing and  community  renewal,  the  "divi-
    14  sion",  shall  administer  the  elimination of rent increases based upon
    15  major capital improvements pursuant to this act. The division  shall  no
    16  longer  grant  rent increases on the basis of major capital improvements
    17  at buildings subject to rent regulation or rent  stabilization  pursuant
    18  to  the  emergency rent control law, the emergency tenant protection act
    19  and/or the administrative code of the city  of  New  York.  All  pending
    20  applications  for  rent  increases based upon major capital improvements
    21  shall be denied, and the division shall issue orders disposing of  pend-
    22  ing applications as necessary.
    23    (b) Any rent increase based upon major capital improvements previously
    24  ordered by the division, pursuant to the emergency rent control law, the
    25  emergency  tenant  protection  act and/or the administrative code of the
    26  city of New York, with an effective date within the seven years prior to
    27  the effective date of this act shall be repealed  effective  immediately
    28  unless  the  division  finds a basis for limiting the repeal pursuant to
    29  subdivision (d) of this  section.  For  all  affected  housing  accommo-
    30  dations,  the division shall determine what the present legal rent would
    31  be for each such accommodation if the division had not ordered any  rent
    32  increases  based upon major capital improvements during the repeal peri-
    33  od, and this amount shall be the proposed new legal rent.
    34    (c) Within 180 days of the effective date of this act, the division of
    35  housing and community renewal shall determine  the  proposed  new  legal
    36  rents  for  all  affected housing accommodations pursuant to subdivision
    37  (b) of this section and shall also provide written notification  to  all
    38  current  owners  and tenants of affected accommodations as to the amount
    39  of the proposed new legal rents, the basis for the department's determi-
    40  nation, and the time for each affected party to submit additional infor-
    41  mation that the division shall consider before  issuing  a  final  order
    42  determining  the  new legal rents, which shall not be less than 45 days.
    43  Unless an owner of an affected building has submitted a timely  applica-
    44  tion  to  the  division  for a limitation pursuant to subdivision (d) of
    45  this section, the division shall issue a final order determining the new
    46  legal rents for affected housing accommodations within 365 days  of  the
    47  effective date of this act.
    48    (d)  (1)  Within  90  days of receiving written notice of proposed new
    49  legal rents from the  division  pursuant  to  subdivision  (c)  of  this
    50  section,  a  building owner may apply to the commissioner of housing and
    51  community renewal for an order limiting the amount of the repeal of rent
    52  increases under this act based upon a finding  by  the  commissioner  of
    53  housing  and community renewal that the proposed new legal rents are not
    54  sufficient to enable the owner to maintain an annual gross  rent  income
    55  for  such  building  which exceeds the annual operating expenses of such
    56  building by a sum equal to at least five percent of such gross rent.  In

        S. 3693                             3
     1  buildings  for  which  the commissioner of housing and community renewal
     2  finds that the proposed new legal rents are not sufficient to enable the
     3  owner to maintain an annual gross rent income for  such  building  which
     4  exceeds the annual operating expenses of such building by a sum equal to
     5  at  least  five  percent  of  such gross rent, the repeal amount of rent
     6  increases based upon major capital improvements shall be limited  to  an
     7  amount  such  that  the annual operating expenses of the building do not
     8  exceed ninety-five percent of the new proposed annual gross rent  income
     9  for such building.
    10    (2)  For  the  purposes  of this subdivision, operating expenses shall
    11  consist of the actual, reasonable,  costs  of  fuel,  labor,  utilities,
    12  taxes,  other  than  income or corporate franchise taxes, fees, permits,
    13  necessary contracted services and noncapital repairs,  insurance,  parts
    14  and  supplies,  management fees and other administrative costs and mort-
    15  gage interest. For the purposes of this subdivision,  mortgage  interest
    16  shall  be  deemed  to mean interest on a bona fide mortgage including an
    17  allocable portion of charges related thereto. Criteria to be  considered
    18  in determining a bona fide mortgage other than an institutional mortgage
    19  shall  include: condition of the property, location of the property, the
    20  existing mortgage market at the time the mortgage is placed, the term of
    21  the mortgage, the amortization rate, the principal amount of  the  mort-
    22  gage,  security  and other terms and conditions of the mortgage. For the
    23  purposes of this subdivision, gross annual rent income  for  a  building
    24  shall  include  a  rental  value  set by the commissioner of housing and
    25  community renewal for any unit occupied by the owner or a person related
    26  to the owner or unoccupied at the owner's choice for more than one month
    27  at the last  regulated  rent  plus  the  minimum  number  of  guidelines
    28  increases or, if no such regulated rent existed or is known, the commis-
    29  sioner  shall  impute  a  rent  consistent with other proposed new legal
    30  rents in the building.
    31    (e) The division shall require that owners refund any  increase  in  a
    32  tenant's security deposit amount collected in excess of a new legal rent
    33  established  under this act within thirty days of the department's issu-
    34  ance of an order determining  new  legal  rents.  Such  excess  security
    35  deposit  amount  may  be  refunded  in the form of a rent credit applied
    36  toward the affected tenant's next monthly  rent  payment,  and  affected
    37  tenants  are  entitled to self-deduct the refund amount from future rent
    38  payments.
    39    (f) The new legal rent shall be the legal rent beginning on  the  date
    40  rent  is  required  to  be  paid next succeeding the issuance of a final
    41  order determining new legal rents under this act.
    42    (g) Any lease agreement executed after the issuance of a  final  order
    43  determining  new  legal rents under this act shall be deemed to incorpo-
    44  rate the rent amounts and effective dates set forth in such order.
    45    (h) Any tenant residing  in  an  affected  housing  accommodation  may
    46  assert  their  entitlement to the repeal of prior rent under subdivision
    47  (b) of this section, as a defense or counterclaim in any legal  proceed-
    48  ing predicated upon a landlord's claim of default in the payment of rent
    49  pursuant  to an agreement. Any court with jurisdiction over a landlord's
    50  claim as to a tenant's default in the payment of rent shall also adjudi-
    51  cate and have primary jurisdiction over  the  tenant's  assertion  of  a
    52  defense  or  counterclaim under this provision if the department has not
    53  yet issued an order determining the new legal rent. A court  order  made
    54  under this subdivision shall not in any way be deemed to impair a build-
    55  ing  owner's  right  or time to apply for a limitation under subdivision
    56  (d) of this section.

        S. 3693                             4
     1    (i) All final orders issued by the department pursuant to subdivisions
     2  (b), (c), and (d) of this section shall be subject to appeal pursuant to
     3  existing procedures for administrative review before the division.
     4    §  3. Paragraph 2 of subdivision 3-a of section 4, subparagraphs 7, 8,
     5  9 and 10 of the second undesignated paragraph of paragraph (a) of subdi-
     6  vision 4 of section 4, and subdivision 9 of section 5 of chapter 274  of
     7  the  laws  of 1946, constituting the emergency housing rent control law,
     8  paragraph 2 of subdivision 3-a of section 4 as amended by chapter 337 of
     9  the laws of 1961, subparagraphs 8, 9 and 10 of the  second  undesignated
    10  paragraph  of  paragraph (a) of subdivision 4 of section 4 as amended by
    11  section 25 of part B of chapter 97 of the laws of 2011,  subparagraph  7
    12  of  the  second undesignated paragraph of paragraph (a) of subdivision 4
    13  of section 4 as amended by section 32 of part A of  chapter  20  of  the
    14  laws  of 2015, and subdivision 9 of section 5 as added by chapter 116 of
    15  the laws of 1997, are amended to read as follows:
    16    (2) the amount of  increases  in  maximum  rent  authorized  by  order
    17  because of increases in dwelling space, services, furniture, furnishings
    18  or equipment[, or major capital improvements].
    19    (7) [there has been since March first, nineteen hundred fifty, a major
    20  capital  improvement required for the operation, preservation or mainte-
    21  nance of the structure; which for any order of the  commissioner  issued
    22  after  the  effective  date  of  the  rent  act of 2015 the cost of such
    23  improvement shall be amortized over an eight-year period  for  buildings
    24  with thirty-five or fewer units or a nine year period for buildings with
    25  more  than  thiry-five  units, or (8)] there has been since March first,
    26  nineteen hundred fifty, in structures containing more than four  housing
    27  accommodations,  other improvements made with the express consent of the
    28  tenants in occupancy of at least seventy-five per centum of the  housing
    29  accommodations,  provided, however, that no adjustment granted hereunder
    30  shall exceed fifteen per centum unless the  tenants  have  agreed  to  a
    31  higher  percentage  of  increase, as herein provided; or [(9)] (8) there
    32  has been, since March first, nineteen hundred fifty, a subletting  with-
    33  out  written  consent  from the landlord or an increase in the number of
    34  adult occupants who are not members  of  the  immediate  family  of  the
    35  tenant, and the landlord has not been compensated therefor by adjustment
    36  of  the  maximum rent by lease or order of the commission or pursuant to
    37  the federal act; or [(10)]  (9)  the  presence  of  unique  or  peculiar
    38  circumstances  materially  affecting  the maximum rent has resulted in a
    39  maximum rent which is  substantially  lower  than  the  rents  generally
    40  prevailing  in  the same area for substantially similar housing accommo-
    41  dations.
    42    9. Notwithstanding any provision of this law to the  contrary  in  the
    43  case where all tenants occupying the housing accommodation on the effec-
    44  tive date of this subdivision have vacated the housing accommodation and
    45  a  family  member  of such vacating tenant or tenants is entitled to and
    46  continues to occupy the housing accommodation subject to the protections
    47  of this law, if such accommodation continues to be subject to  this  law
    48  after  such family member vacates, on the occurrence of such vacancy the
    49  maximum collectable rent shall be increased by a sum equal to the allow-
    50  ance then in  effect  for  vacancy  leases  for  housing  accommodations
    51  covered  by  the  rent stabilization law of nineteen hundred sixty-nine,
    52  including the amount allowed by paragraph five-a  of  subdivision  c  of
    53  section  26-511  of  such law. This increase shall be in addition to any
    54  other increases provided in this law including an adjustment based  upon
    55  [a  major capital improvement, or] a substantial increase or decrease in
    56  dwelling space or a change in the services,  furniture,  furnishings  or

        S. 3693                             5
     1  equipment  provided  in  the  housing accommodation, pursuant to section
     2  four of this law and shall be applicable in like manner to  each  second
     3  subsequent succession.
     4    §  4.  Paragraphs  3,  4,  and 5 of subdivision d and subdivision g of
     5  section 6 of section 4 of chapter 576 of the laws of 1974,  constituting
     6  the  emergency tenant protection act of nineteen seventy-four, paragraph
     7  3 of subdivision d as amended by section 30 of part A of chapter  20  of
     8  the laws of 2015, paragraph 4 of subdivision d as amended by chapter 403
     9  of  the laws of 1983, paragraph 5 of subdivision d as amended by chapter
    10  102 of the laws of 1984, and subdivision g as added by  chapter  116  of
    11  the laws of 1997, are amended to read as follows:
    12    (3) [there has been since January first, nineteen hundred seventy-four
    13  a  major capital improvement required for the operation, preservation or
    14  maintenance of the structure. An adjustment under this  paragraph  shall
    15  be  in  an  amount  sufficient  to amortize the cost of the improvements
    16  pursuant to this paragraph over an eight-year period for a building with
    17  thirty-five or fewer housing accommodations, or a nine-year period for a
    18  building with more than  thirty-five  housing  accommodations,  for  any
    19  determination  issued  by  the division of housing and community renewal
    20  after the effective date of the rent act of 2015, or
    21    (4)] an owner by application to the  state  division  of  housing  and
    22  community  renewal  for  increases  in  the  rents in excess of the rent
    23  adjustment authorized by the rent guidelines board under this act estab-
    24  lishes a hardship, and the state division finds that the  rate  of  rent
    25  adjustment  is  not  sufficient to enable the owner to maintain approxi-
    26  mately the same ratio between operating expenses,  including  taxes  and
    27  labor  costs but excluding debt service, financing costs, and management
    28  fees, and gross rents which prevailed on the average over the  immediate
    29  preceding  five  year  period, or for the entire life of the building if
    30  less than five years, or
    31    [(5)] (4) as an alternative to the hardship application provided under
    32  paragraph [four] three of this subdivision, owners of buildings acquired
    33  by the same owner or a related entity owned by the same principals three
    34  years prior to the date of application may apply  to  the  division  for
    35  increases  in  excess  of  the  level  of applicable guideline increases
    36  established under this law based on a finding by the  commissioner  that
    37  such guideline increases are not sufficient to enable the owner to main-
    38  tain  an  annual  gross  rent income for such building which exceeds the
    39  annual operating expenses of such building by a sum equal  to  at  least
    40  five  percent  of  such  gross rent. For the purposes of this paragraph,
    41  operating expenses shall consist of the  actual,  reasonable,  costs  of
    42  fuel,  labor, utilities, taxes, other than income or corporate franchise
    43  taxes, fees, permits,  necessary  contracted  services  and  non-capital
    44  repairs, insurance, parts and supplies, management fees and other admin-
    45  istrative  costs  and  mortgage interest. For the purposes of this para-
    46  graph, mortgage interest shall be deemed to mean interest on a bona fide
    47  mortgage including an allocable  portion  of  charges  related  thereto.
    48  Criteria to be considered in determining a bona fide mortgage other than
    49  an  institutional  mortgage  shall  include;  condition of the property,
    50  location of the property, the existing mortgage market at the  time  the
    51  mortgage is placed, the term of the mortgage, the amortization rate, the
    52  principal  amount  of  the mortgage, security and other terms and condi-
    53  tions of the mortgage. The commissioner shall set a rental value for any
    54  unit occupied by the owner or a person related to the owner  or  unoccu-
    55  pied at the owner's choice for more than one month at the last regulated
    56  rent  plus  the  minimum  number  of guidelines increases or, if no such

        S. 3693                             6
     1  regulated rent existed or is known, the commissioner shall impute a rent
     2  consistent with other rents in the  building.  The  amount  of  hardship
     3  increase  shall  be such as may be required to maintain the annual gross
     4  rent  income as provided by this paragraph. The division shall not grant
     5  a hardship application under this paragraph or paragraph [four] three of
     6  this subdivision for a period of three years subsequent  to  granting  a
     7  hardship  application  under  the  provisions  of  this  paragraph.  The
     8  collection of any increase in the rent  for  any  housing  accommodation
     9  pursuant to this paragraph shall not exceed six percent in any year from
    10  the  effective date of the order granting the increase over the rent set
    11  forth in the schedule of gross rents, with collectability of any  dollar
    12  excess  above  said  sum  to be spread forward in similar increments and
    13  added to the rent as established or set in future years. No  application
    14  shall  be  approved  unless  the owner's equity in such building exceeds
    15  five percent of: (i) the arms length purchase  price  of  the  property;
    16  (ii)  the  cost  of any capital improvements for which the owner has not
    17  collected a surcharge; (iii) any repayment of principal of any  mortgage
    18  or  loan  used  to  finance  the purchase of the property or any capital
    19  improvements for which the owner has not collected a surcharge; and (iv)
    20  any increase in the equalized  assessed  value  of  the  property  which
    21  occurred  subsequent  to  the  first  valuation  of  the  property after
    22  purchase by the owner. For the purposes of this paragraph, owner's equi-
    23  ty shall mean the sum of (i) the purchase price of the property less the
    24  principal of any mortgage or loan used to finance the  purchase  of  the
    25  property,  (ii)  the cost of any capital improvement for which the owner
    26  has not collected a surcharge less the principal of any mortgage or loan
    27  used to finance said improvement, (iii) any repayment of  the  principal
    28  of  any mortgage or loan used to finance the purchase of the property or
    29  any capital  improvement  for  which  the  owner  has  not  collected  a
    30  surcharge,  and (iv) any increase in the equalized assessed value of the
    31  property which occurred subsequent to the first valuation of the proper-
    32  ty after purchase by the owner.
    33    g. Notwithstanding any provision of this act to the  contrary  in  the
    34  case where all tenants named in a lease have permanently vacated a hous-
    35  ing accommodation and a family member of such tenant or tenants is enti-
    36  tled  to  and  executes a renewal lease for the housing accommodation if
    37  such accommodation continues to be subject to this act after such family
    38  member vacates, on the occurrence of such vacancy  the  legal  regulated
    39  rent  shall  be increased by a sum equal to the allowance then in effect
    40  for vacancy leases, including the amount allowed by subdivision (a-1) of
    41  section ten of this act. Such increase shall be in addition to any other
    42  increases provided for in this act including an adjustment based upon [a
    43  major capital improvement, or] a substantial modification or increase of
    44  dwelling space or services, or installation of new equipment or improve-
    45  ments or new furniture or furnishings provided  in  or  to  the  housing
    46  accommodation, pursuant to section six of this act and shall be applica-
    47  ble in like manner to each second subsequent succession.
    48    §  5.  Subdivision  (a-1) of section 10 of section 4 of chapter 576 of
    49  the laws of 1974, constituting the emergency tenant  protection  act  of
    50  nineteen  seventy-four,  as amended by section 16-b of part A of chapter
    51  20 of the laws of 2015, is amended to read as follows:
    52    (a-1) provides that, notwithstanding any provision of  this  act,  the
    53  legal regulated rent for any vacancy lease entered into after the effec-
    54  tive  date  of  this subdivision shall be as hereinafter set forth.  The
    55  previous legal regulated rent for such housing  accommodation  shall  be
    56  increased  by  the  following: (i) if the vacancy lease is for a term of

        S. 3693                             7
     1  two years, twenty percent of the previous legal regulated rent; or  (ii)
     2  if  the  vacancy  lease  is for a term of one year the increase shall be
     3  twenty percent of the previous legal regulated rent less an amount equal
     4  to  the  difference  between  (a)  the  two year renewal lease guideline
     5  promulgated by the guidelines board of the county in which  the  housing
     6  accommodation  is  located  applied to the previous legal regulated rent
     7  and (b) the one year renewal lease guideline promulgated by  the  guide-
     8  lines  board of the county in which the housing accommodation is located
     9  applied to the previous legal regulated rent. However, where the  amount
    10  charged  and  paid by the prior tenant pursuant to paragraph fourteen of
    11  [this] subdivision c of section 26-511 of the administration code of the
    12  city of New York, was less than the legal regulated rent, such  increase
    13  to  the  legal  regulated  rent  shall not exceed:   five percent of the
    14  previous legal regulated rent if the last vacancy lease  commenced  less
    15  than  two years ago; ten percent of the previous legal regulated rent if
    16  the last vacancy commenced less than three years ago; fifteen percent of
    17  the previous legal regulated rent if the last  vacancy  lease  commenced
    18  less than four years ago; twenty percent of the previous legal regulated
    19  rent  if  the  last  vacancy  lease commenced four or more years ago. In
    20  addition, if the legal regulated rent was not increased with respect  to
    21  such housing accommodation by a permanent vacancy allowance within eight
    22  years  prior  to a vacancy lease executed on or after the effective date
    23  of this subdivision, the legal regulated rent may be  further  increased
    24  by an amount equal to the product resulting from multiplying such previ-
    25  ous legal regulated rent by six-tenths of one percent and further multi-
    26  plying the amount of rent increase resulting therefrom by the greater of
    27  (A)  the  number  of  years  since  the imposition of the last permanent
    28  vacancy allowance, or (B) if the rent was not increased by  a  permanent
    29  vacancy allowance since the housing accommodation became subject to this
    30  act,  the  number  of  years  that  such  housing accommodation has been
    31  subject to this act. Provided that if the previous legal regulated  rent
    32  was  less  than  three  hundred  dollars  the total increase shall be as
    33  calculated above plus one hundred dollars per month. Provided,  further,
    34  that  if  the  previous  legal regulated rent was at least three hundred
    35  dollars and no more than five hundred dollars  in  no  event  shall  the
    36  total  increase  pursuant  to  this subdivision be less than one hundred
    37  dollars per month. Such increase shall  be  in  lieu  of  any  allowance
    38  authorized  for the one or two year renewal component thereof, but shall
    39  be in addition to any other increases authorized pursuant  to  this  act
    40  including  an  adjustment based upon [a major capital improvement, or] a
    41  substantial modification or increase of dwelling space or  services,  or
    42  installation  of  new  equipment  or  improvements  or  new furniture or
    43  furnishings provided in or to  the  housing  accommodation  pursuant  to
    44  section  six  of this act.   The increase authorized in this subdivision
    45  may not be implemented more than one time in any calendar year, notwith-
    46  standing the number of vacancy leases entered into in such year.
    47    § 6. Section 26-403.2 of the administrative code of the  city  of  New
    48  York, as added by chapter 116 of the laws of 1997, is amended to read as
    49  follows:
    50    §  26-403.2  Increase in maximum collectable rent. Notwithstanding any
    51  provision of this law to the contrary in  the  case  where  all  tenants
    52  occupying  the  housing  accommodation  on  the  effective  date of this
    53  section have vacated the housing accommodation and a  family  member  of
    54  such  vacating  tenant or tenants is entitled to and continues to occupy
    55  the housing accommodation subject to the protections  of  this  law,  if
    56  such accommodation continues to be subject to this law after such family

        S. 3693                             8
     1  member  vacates, on the occurrence of such vacancy the maximum collecta-
     2  ble rent shall be increased by a sum equal  to  the  allowance  then  in
     3  effect for vacancy leases for housing accommodations covered by the rent
     4  stabilization  law  of nineteen hundred sixty-nine, including the amount
     5  allowed by paragraph five-a of subdivision c of section 26-511  of  such
     6  law.  This increase shall be in addition to any other increases provided
     7  for in this law including an adjustment  based  upon  [a  major  capital
     8  improvement, or] a substantial increase or decrease in dwelling space or
     9  a  change  in the services, furniture, furnishings or equipment provided
    10  in the housing accommodation, pursuant to section 26-405 of this law and
    11  shall be applicable in like manner to each second subsequent succession.
    12    § 7. Subparagraphs (g), (h), (i), (j), (k), (l), (m), (n) and  (o)  of
    13  paragraph  1  of  subdivision  g of section 26-405 of the administrative
    14  code of the city of New York, subparagraph (g) as amended by section  31
    15  of part A of chapter 20 of the laws of 2015, subparagraph (k) as amended
    16  by  chapter 749 of the laws of 1990, and clause 7 of subparagraph (n) as
    17  amended by local law number 76 of the city of  New  York  for  the  year
    18  2005, are amended to read as follows:
    19    (g)  [There  has  been  since  July first, nineteen hundred seventy, a
    20  major capital improvement required for the  operation,  preservation  or
    21  maintenance  of the structure. An adjustment under this subparagraph (g)
    22  for any order of the commissioner issued after the effective date of the
    23  rent act of 2015 shall be in an amount sufficient to amortize  the  cost
    24  of the improvements pursuant to this subparagraph (g) over an eight-year
    25  period  for  buildings  with  thirty-five  or fewer units or a nine year
    26  period for buildings with more than thirty-five units, or
    27    (h) There have been since March first, nineteen hundred fifty-nine, in
    28  structures containing  more  than  four  housing  accommodations,  other
    29  improvements  made  with the express consent of the tenants in occupancy
    30  of at least seventy-five  per  centum  of  the  housing  accommodations;
    31  provided,  however,  that  whenever  the city rent agency has determined
    32  that the improvements proposed were part of a plan designed for  overall
    33  improvement  of the structure or increases in services, it may authorize
    34  increases in maximum rents for all housing accommodations affected  upon
    35  the  express  consent  of the tenants in occupancy of at least fifty-one
    36  per centum of the housing accommodations, and provided further  that  no
    37  adjustment  granted hereunder shall exceed fifteen per centum unless the
    38  tenants have agreed to  a  higher  percentage  of  increase,  as  herein
    39  provided; or
    40    (i)] There has been, since March first, nineteen hundred fifty-nine, a
    41  subletting  without  written consent from the landlord or an increase in
    42  the number of adult occupants who are not members of the immediate fami-
    43  ly of the tenant, and the landlord has not been compensated therefor  by
    44  adjustment of the maximum rent by lease or order of the city rent agency
    45  or pursuant to the state rent act or the federal act; or
    46    [(j)]  (h) The presence of unique or peculiar circumstances materially
    47  affecting the maximum rent has resulted  in  a  maximum  rent  which  is
    48  substantially lower than the rents generally prevailing in the same area
    49  for substantially similar housing accommodations.
    50    [(k)  The landlord has incurred, since January first, nineteen hundred
    51  seventy, in connection with and in addition to a concurrent major  capi-
    52  tal  improvement  pursuant  to subparagraph (g) of this paragraph, other
    53  expenditures to improve, restore or preserve the quality of  the  struc-
    54  ture.  An  adjustment  under  this subparagraph shall be granted only if
    55  such improvements represent an expenditure equal to  at  least  ten  per
    56  centum of the total operating and maintenance expenses for the preceding

        S. 3693                             9

     1  year.  An adjustment under this subparagraph shall be in addition to any
     2  adjustment granted for the  concurrent  major  capital  improvement  and
     3  shall  be  in  an amount sufficient to amortize the cost of the improve-
     4  ments pursuant to this subparagraph over a seven-year period.
     5    (l)]  (i)  (1)  The  actual labor expenses currently incurred or to be
     6  incurred (pursuant to a collective agreement or other obligation actual-
     7  ly entered into by  the  landlord)  exceed  the  provision  for  payroll
     8  expenses  in  the  current  applicable operating and maintenance expense
     9  allowance under subdivision a of this section. No  application  pursuant
    10  to this subparagraph may be granted within one year from the granting of
    11  an  adjustment  in  maximum rent pursuant to this subparagraph [(l)], or
    12  pursuant to subparagraph (a) of this paragraph. Any  rent  increase  the
    13  applicant  would  be  entitled  to,  or  such portion thereof, shall not
    14  exceed a total increase of seven and one-half per centum  per  annum  of
    15  the  maximum rent as provided in paragraph five of subdivision a of this
    16  section.
    17    (2) Any adjustment in the  maximum  rents  pursuant  hereto  shall  be
    18  subject to:
    19    (i) The adjustment in maximum rent for any twelve-month period for any
    20  housing  accommodation shall not exceed four percent of the maximum rent
    21  in effect on December thirty-first, nineteen hundred seventy-three.
    22    (ii) Where the increase in  labor  costs  compensable  herein  is  the
    23  result of an industry-wide collective bargaining agreement or a specific
    24  agreement in anticipation of, or subsequent to, an industry-wide collec-
    25  tive  bargaining  agreement,  the  adjustment  shall  be  in such amount
    26  (subject to the above limitation) that the increased rental income  from
    27  January  first,  nineteen hundred seventy-four to December thirty-first,
    28  nineteen hundred seventy-six shall reflect the increased labor costs for
    29  the period from April thirtieth, nineteen hundred seventy-three to April
    30  thirtieth, nineteen hundred seventy-six.
    31    (3) For the purpose of this subparagraph [(l)] the increase  in  labor
    32  costs  shall  be  the  amount  by  which the labor costs (a) actually in
    33  effect and paid, or (b) actually in effect and paid or payable and fixed
    34  and determined pursuant to agreement on the date of the  filing  of  the
    35  application  and projected over the period ending April thirtieth, nine-
    36  teen hundred seventy-six, exceed the labor costs for the twelve calendar
    37  months immediately preceding the last day of the month in which the wage
    38  agreement became effective.
    39    (4) Notwithstanding any other provision of this chapter,  the  adjust-
    40  ment  pursuant  to this subparagraph shall be collectible upon the land-
    41  lord's filing of a report with the city  rent  agency,  subject  to  the
    42  provisions of subparagraph (e) of paragraph two of subdivision a of this
    43  section.
    44    (5)  No increase in the maximum rent for any housing accommodation may
    45  be granted under this subparagraph [(l)] if on the date when the  appli-
    46  cation  is sought to be filed, less than the full term of such agreement
    47  has elapsed since the date of the filing of the last  prior  application
    48  for  an  increase  with respect to such property under this subparagraph
    49  [(l)], which application resulted in the granting of an increase. Where,
    50  however, the landlord establishes the existence of  unique  or  peculiar
    51  circumstances affecting an increase in labor costs for the property, the
    52  agency may accept such application where it determines that such accept-
    53  ance is not inconsistent with the purposes of this local law.
    54    (6)  The  increase  authorized  herein  shall be apportioned equitably
    55  among all the housing accommodations in  the  property  whether  or  not
    56  subject to control under this chapter.

        S. 3693                            10
     1    [(m)]  (j)  Where the rehabilitation or improvement of sub-standard or
     2  deteriorated housing accommodations has been financed  under  a  govern-
     3  mental program providing assistance through loans, loan insurance or tax
     4  abatement  or  has  been undertaken under another rehabilitation program
     5  not so financed but approved by the commissioner.
     6    [(n)](k)(1) The city rent agency shall hereafter promulgate in January
     7  of each year;
     8    (i)  findings  regarding the price increase or decrease, respectively,
     9  for all types of heating fuel, including numbers two, four and six  home
    10  heating oils, utility supplied steam, gas, electricity and coal, togeth-
    11  er  with the sales and excise taxes thereon, on December thirty-first as
    12  compared to the January first in any year; and
    13    (ii) standards for consumption of heating fuel, which shall be no more
    14  than two hundred twenty-five gallons per year per room commencing  Janu-
    15  ary first, nineteen hundred eighty-one, for buildings using heating oils
    16  for  heat with comparable unit limitations to be established by the city
    17  rent agency for utility supplied steam, gas, electricity, coal  and  any
    18  other types of heating systems, provided that such consumption standards
    19  for heating fuels shall be reduced by five gallons per room per year for
    20  heating  oils  and  a  comparable amount for other heating fuels for the
    21  next succeeding year and ten gallons per room per year for heating  oils
    22  and a comparable amount for other heating fuels for two succeeding years
    23  thereafter.
    24    Such findings and consumption standards shall be published in the City
    25  Record.
    26    (2) To obtain a rental adjustment pursuant to this subparagraph [(n)],
    27  the  landlord shall file a report with the agency on forms prescribed by
    28  the agency and shall:
    29    (i) certify the amount of heating fuel consumed in the  calendar  year
    30  immediately prior to the filing of the report;
    31    (ii) state the type of fuel used and the number of rooms in the build-
    32  ing;
    33    (iii)  certify that (a) all essential services required to be provided
    34  have been and will continue to be maintained and (b) there has  been  no
    35  rent  reduction order issued pursuant to this chapter based on the land-
    36  lord's failure to provide heat or hot  water  during  the  prior  twelve
    37  months;
    38    (iv)  certify  on  information  and belief, in order to qualify for an
    39  additional rent increase pursuant to this subparagraph [(n)],  that  for
    40  an  individual  housing  accommodation,  if the maximum rent collectible
    41  pursuant to paragraph five of subdivision a of this section plus  actual
    42  rent adjustments pursuant to this subparagraph [(n)] and such additional
    43  rent  increase,  is  equal  to  or  exceeds the maximum rent established
    44  pursuant to paragraphs three and four of subdivision a of  this  section
    45  plus  the  amount  calculated  pursuant to subitem (i) of item three and
    46  subitem (i) of item four of this subparagraph [(n)], each  to  be  allo-
    47  cated  to  such  housing  accommodation pursuant to subitem (ii) of item
    48  four of this subparagraph [(n)], that the landlord will not  be  earning
    49  an  amount  in  excess of the statutory return specified in subparagraph
    50  (a) of this paragraph [one of  subdivision  g  of  this  section]  after
    51  collection  of a rent increase pursuant to this subparagraph [(n)], with
    52  respect to a building or buildings serviced by a single heating plant;
    53    (v) report any funds received with respect  to  the  housing  accommo-
    54  dations  from  any governmental grant program compensating such landlord
    55  for fuel price increases during the period for which  an  adjustment  is
    56  obtained pursuant to this subparagraph [(n)];

        S. 3693                            11
     1    (vi) provide such other information as the agency may require.
     2    (3)  Rent adjustments for controlled housing accommodations for annual
     3  heating fuel cost increases  or  decreases  experienced  after  December
     4  thirty-first,  nineteen  hundred  seventy-nine,  shall  be determined as
     5  follows:
     6    (i) the increase or decrease in heating fuel prices found by the agen-
     7  cy for that year shall be multiplied by the actual consumption,  not  to
     8  exceed  that year's consumption standard established pursuant to subitem
     9  (ii) of item one of this subparagraph; and
    10    (ii) seventy-five percentum of such amount shall  be  allocated  among
    11  all rental space in the building, including commercial, professional and
    12  similar  facilities,  provided,  for  the  purposes of this subparagraph
    13  [(n)], that living rooms, kitchens over fifty-nine square feet  in  area
    14  and  bedrooms  shall  be considered rooms and that bathrooms, foyers and
    15  kitchenettes shall not be considered rooms.
    16    (4) Rent adjustments for controlled housing accommodations for heating
    17  fuel cost increases or decreases experienced from April ninth,  nineteen
    18  hundred seventy-nine, through and including December thirty-first, nine-
    19  teen hundred seventy-nine, shall be determined as follows:
    20    (i) the increase or decrease in heating fuel prices found by the agen-
    21  cy  for that period shall be multiplied by seventy-five percentum of the
    22  actual heating fuel consumption during the period  from  January  first,
    23  nineteen  hundred  seventy-nine,  through and including December thirty-
    24  first, nineteen hundred seventy-nine, which consumption shall not exceed
    25  seventy-five percentum of that year's consumption  standard  established
    26  by the agency; and
    27    (ii)  such  amount  shall  be  allocated among all rental space in the
    28  building, including commercial,  professional  and  similar  facilities,
    29  provided,  for  the  purposes  of  this  subparagraph [(n)], that living
    30  rooms, kitchens over fifty-nine square feet in area and  bedrooms  shall
    31  be  considered  rooms  and that bathrooms, foyers and kitchenettes shall
    32  not be considered rooms.
    33    The city rent agency shall promulgate findings for heating fuel  price
    34  increases or decreases and standards for consumption for the periods set
    35  forth in this item four thirty days after this local law is enacted. The
    36  standard for consumption shall be no more than seventy-five percentum of
    37  two hundred thirty gallons per room for buildings using heating oils for
    38  heat with comparable unit limitations to be established by the city rent
    39  agency  for utility supplied steam, gas, electricity, coal and any other
    40  types of heating systems.
    41    (5) A landlord who files a report pursuant to  this  subparagraph  and
    42  who  falsely certifies shall not be eligible to collect any rent adjust-
    43  ment pursuant to this subparagraph for two years  following  a  determi-
    44  nation  of  a  false  certification  and,  in  addition, any adjustments
    45  obtained pursuant to this subparagraph for up to two years prior to such
    46  determination shall not be collectible for that same  two  year  period.
    47  Such  landlord shall also be subject to any additional penalties imposed
    48  by law.
    49    (6) A landlord annually may file a report pursuant  to  this  subpara-
    50  graph  [(n)]  after  promulgation  by  the  agency  of  the findings and
    51  consumption standards set forth in item one of this subparagraph  [(n)].
    52  A rent adjustment pursuant to such report shall be prospectively collec-
    53  tible  upon  the  landlord's  serving  and  filing the report, provided,
    54  however, that if a landlord files such report within sixty days  of  the
    55  promulgation  of  such  findings  and  consumption  standards, such rent

        S. 3693                            12
     1  adjustment shall be retroactive to and shall  be  effective  as  of  the
     2  January first of the year in which the report is filed.
     3    (7)  A  landlord demanding or collecting a rent adjustment pursuant to
     4  this subparagraph [(n)] shall at  the  time  of  either  the  demand  or
     5  collection  issue to the tenant either a rent bill or receipt separately
     6  setting forth the amount of the adjustment pursuant to this subparagraph
     7  [(n)]  and  the  amount  of  the  maximum  rent  otherwise  demanded  or
     8  collected.    If  the tenant has been issued a valid senior citizen rent
     9  exemption order or a valid disability rent exemption  order,  the  owner
    10  shall  also separately state the amount payable by the senior citizen or
    11  person with a disability after the exemption.
    12    (8) In the event that a rent reduction order is  issued  by  the  city
    13  rent  agency  based  upon  the landlord's failure to provide heat or hot
    14  water to housing accommodations for which the landlord is  collecting  a
    15  rent adjustment pursuant to this subparagraph [(n)], the rent adjustment
    16  shall  not  be collected during the time such rent reduction order is in
    17  effect and for twelve months following the date of  the  restoration  of
    18  the  rent  reduction. In addition, the landlord shall not be eligible to
    19  collect any subsequent rent adjustment  pursuant  to  this  subparagraph
    20  [(n)]  until  twelve months following the date of the restoration of the
    21  rent reduction.
    22    (9) In the event that the city rent agency promulgates a finding of  a
    23  price  decrease,  if  any  landlord  who  has obtained a rent adjustment
    24  pursuant to this subparagraph [(n)] does not file a report  for  a  rent
    25  adjustment  pursuant to this subparagraph [(n)] within sixty days of the
    26  promulgation of such findings, then all rent adjustments obtained pursu-
    27  ant to this subparagraph [(n)] shall not be collectible for a period  of
    28  twelve months.
    29    (10)  Any rent adjustment obtained pursuant to this subparagraph [(n)]
    30  shall not be included in the maximum rent established pursuant to  para-
    31  graph four or five of subdivision [(a)] a of this section.
    32    (11)  The  city  rent  agency  shall have the power to promulgate such
    33  regulations as it may consider necessary or convenient to implement  and
    34  administer  the  provisions  of this subparagraph [(n)]. The regulations
    35  shall also require that any rent adjustment  granted  pursuant  to  this
    36  subparagraph  [(n)]  be  reduced  by an amount equal to any governmental
    37  grant received by the landlord compensating the landlord  for  any  fuel
    38  price  increases, but not required by the city, the agency or any grant-
    39  ing government entity  to  be  expended  for  fuel  related  repairs  or
    40  improvements.
    41    [(o)]  (l)  (1) There has been an increase in heating and heating fuel
    42  expenditures in a property resulting from a city-wide  rise  in  heating
    43  fuel  costs such that the verifiable expenditures for heating or heating
    44  fuel in a property for nineteen hundred seventy-four exceeds the verifi-
    45  able expenditures for such  heating  or  heating  fuel  during  nineteen
    46  hundred seventy-three.
    47    (2) To obtain a rental adjustment pursuant to this subparagraph [(o)],
    48  the  landlord  must  certify that he or she is presently maintaining all
    49  essential services required to be furnished with respect to the  housing
    50  accommodations  covered  by  such certification, and that he or she will
    51  continue to so maintain such essential services for the  period  of  any
    52  such adjustment.
    53    (3) To obtain a rental adjustment pursuant to this subparagraph [(o)],
    54  the  landlord must certify on information and belief that he or she will
    55  not be earning an amount in excess of the statutory return specified  in
    56  subparagraph  (a)  of  this  paragraph  [one  of  subdivision  g of this

        S. 3693                            13

     1  section] after collection of such rental adjustment, with respect to the
     2  building or buildings serviced by a single heating plant; and where  the
     3  building,  or  buildings  serviced  by  a single heating plant, contains
     4  forty-nine  or  fewer  housing accommodations, the landlord must certify
     5  that the amount expended directly for heating or heating fuel  in  nine-
     6  teen hundred seventy-four equalled or exceeded ten per cent of the total
     7  rental  income  which  was  derived  from  the  property during nineteen
     8  hundred seventy-four; and, where the building, or buildings serviced  by
     9  a  single  heating  plant, contains fifty or more housing accommodations
    10  the landlord must certify that the amount expended directly for  heating
    11  or  heating  fuel  in nineteen hundred seventy-four equalled or exceeded
    12  seven and one-half percentum  of  the  total  rental  income  which  was
    13  derived from the property during nineteen hundred seventy-four.
    14    (4)  The  total  rental  adjustments for a property to be allocated or
    15  deemed allocated pursuant to this subparagraph [(o)]  shall  not  exceed
    16  one-half  of the gross amount by which the total verifiable expenditures
    17  for heating or heating fuel for nineteen  hundred  seventy-four  exceeds
    18  the  total  verifiable expenditures for such heating or heating fuel for
    19  nineteen hundred seventy-three.
    20    (5) Such total rental adjustments shall be allocated or  deemed  allo-
    21  cated  pursuant to this subparagraph [(o)] to all housing accommodations
    22  subject to this chapter, to all other housing accommodations, and to all
    23  commercial, professional and similar facilities in  or  associated  with
    24  the  property  in  a  manner to be determined by the agency. In no event
    25  shall any adjustment in maximum rent pursuant to this subparagraph [(o)]
    26  for any housing accommodations subject to this chapter exceed a  monthly
    27  increase of two dollars per room, as defined by item eight below. In any
    28  apartment  containing  five or more rooms, any increase shall not exceed
    29  the total of nine dollars.
    30    (6) Any adjustment pursuant to this subparagraph [(o)] shall be effec-
    31  tive for all or part of the period July first, nineteen  hundred  seven-
    32  ty-five  through  June  thirtieth,  nineteen  hundred  seventy-six.  Any
    33  adjustment pursuant to this subparagraph shall automatically  expire  no
    34  later than June thirtieth, nineteen hundred seventy-six.
    35    (7)  The  rental  increases provided for herein shall be effective and
    36  collectible upon the landlord's filing a report with the agency on forms
    37  prescribed by the agency and upon giving such notice to the  tenants  as
    38  the  agency  shall  prescribe,  subject to adjustments upon order of the
    39  agency.
    40    (8) In determining the  amount  of  an  adjustment  allocation  of  an
    41  adjustment  pursuant  to  this  subparagraph  [(o)],  only living rooms,
    42  kitchens over fifty-nine square feet in area, dining rooms and  bedrooms
    43  shall be considered rooms; bathrooms, foyers, and kitchenettes shall not
    44  be considered rooms.
    45    § 8. Subdivision a of section 26-407 of the administrative code of the
    46  city of New York is amended to read as follows:
    47    a.  Notwithstanding  any  provisions  of  this chapter, any labor cost
    48  pass-along rent increase requested of, or received from, any  tenant  on
    49  or  after  July  first,  nineteen  hundred  seventy-two, pursuant to the
    50  provisions of subparagraph [(1)] (i) of paragraph one of  subdivision  g
    51  of  section  26-405  of  this  title,  shall not exceed the maximum rent
    52  adjustment as provided under this chapter after the  effective  date  of
    53  this section.
    54    §  9.  Paragraphs  5-a and 6 of subdivision c of section 26-511 of the
    55  administrative code of the city of New York, paragraph 5-a as amended by
    56  section 16-a of part A of chapter 20 of the laws of 2015 and paragraph 6

        S. 3693                            14
     1  as amended by section 29 of part A of chapter 20 of the  laws  of  2015,
     2  are amended to read as follows:
     3    (5-a)  provides  that,  notwithstanding any provision of this chapter,
     4  the legal regulated rent for any vacancy lease entered  into  after  the
     5  effective  date  of  this  paragraph shall be as hereinafter provided in
     6  this paragraph. The previous  legal  regulated  rent  for  such  housing
     7  accommodation  shall  be  increased by the following: (i) if the vacancy
     8  lease is for a term of two years, twenty percent of the  previous  legal
     9  regulated  rent;  or (ii) if the vacancy lease is for a term of one year
    10  the increase shall be twenty percent of  the  previous  legal  regulated
    11  rent  less  an  amount  equal to the difference between (a) the two year
    12  renewal lease guideline promulgated by the guidelines board of the  city
    13  of New York applied to the previous legal regulated rent and (b) the one
    14  year  renewal lease guideline promulgated by the guidelines board of the
    15  city of New York applied to the previous legal regulated rent.  However,
    16  where  the amount charged and paid by the prior tenant pursuant to para-
    17  graph fourteen of this subdivision, was less than  the  legal  regulated
    18  rent,  such  increase to the legal regulated rent shall not exceed: five
    19  percent of the previous legal regulated rent if the last  vacancy  lease
    20  commenced  less  than  two  years ago; ten percent of the previous legal
    21  regulated rent if the last vacancy lease commenced less than three years
    22  ago; fifteen percent of the previous legal regulated rent  if  the  last
    23  vacancy  lease commenced less than four years ago; twenty percent of the
    24  previous legal regulated rent if the last vacancy lease  commenced  four
    25  or  more  years  ago.  In  addition, if the legal regulated rent was not
    26  increased with respect to such  housing  accommodation  by  a  permanent
    27  vacancy  allowance  within eight years prior to a vacancy lease executed
    28  on or after the effective date of this paragraph,  the  legal  regulated
    29  rent  may be further increased by an amount equal to the product result-
    30  ing from multiplying such previous legal regulated rent by six-tenths of
    31  one percent and further multiplying the amount of rent increase  result-
    32  ing  therefrom by the greater of (A) the number of years since the impo-
    33  sition of the last permanent vacancy allowance, or (B) if the  rent  was
    34  not  increased by a permanent vacancy allowance since the housing accom-
    35  modation became subject to this chapter, the number of years  that  such
    36  housing accommodation has been subject to this chapter. Provided that if
    37  the  previous  legal  regulated rent was less than three hundred dollars
    38  the total increase shall be as calculated above plus one hundred dollars
    39  per month. Provided, further, that if the previous legal regulated  rent
    40  was at least three hundred dollars and no more than five hundred dollars
    41  in  no event shall the total increase pursuant to this paragraph be less
    42  than one hundred dollars per month. Such increase shall be  in  lieu  of
    43  any allowance authorized for the one or two year renewal component ther-
    44  eof, but shall be in addition to any other increases authorized pursuant
    45  to  this  chapter  including  an  adjustment based upon [a major capital
    46  improvement, or] a substantial  modification  or  increase  of  dwelling
    47  space  or  services, or installation of new equipment or improvements or
    48  new furniture or furnishings provided in or to the housing accommodation
    49  pursuant to this section. The increase authorized in this paragraph  may
    50  not  be  implemented  more  than one time in any calendar year, notwith-
    51  standing the number of vacancy leases entered into in such year.
    52    (6) provides criteria whereby the commissioner may act  upon  applica-
    53  tions  by  owners  for  increases  in  excess  of the level of fair rent
    54  increase established under this law provided, however, that such  crite-
    55  ria shall provide [(a)], as to hardship applications, for a finding that
    56  the level of fair rent increase is not sufficient to enable the owner to

        S. 3693                            15
     1  maintain  approximately  the same average annual net income (which shall
     2  be computed without regard to debt service, financing costs  or  manage-
     3  ment  fees)  for the three year period ending on or within six months of
     4  the  date  of  an application pursuant to such criteria as compared with
     5  annual net income, which prevailed on the average over the period  nine-
     6  teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
     7  first three years of operation if the building was completed since nine-
     8  teen hundred sixty-eight or for the first three  fiscal  years  after  a
     9  transfer of title to a new owner provided the new owner can establish to
    10  the  satisfaction  of  the commissioner that he or she acquired title to
    11  the building as a result of a bona fide sale of the entire building  and
    12  that  the new owner is unable to obtain requisite records for the fiscal
    13  years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
    14  despite  diligent  efforts to obtain same from predecessors in title and
    15  further provided that the new owner can provide financial data  covering
    16  a  minimum  of  six  years under his or her continuous and uninterrupted
    17  operation of the building to meet the three year to three  year  compar-
    18  ative  test  periods herein provided[; and (b) as to completed building-
    19  wide major capital improvements, for a finding  that  such  improvements
    20  are deemed depreciable under the Internal Revenue Code and that the cost
    21  is  to  be amortized over an eight-year period for a building with thir-
    22  ty-five or fewer housing accommodations, or a  nine-year  period  for  a
    23  building  with  more  than  thirty-five  housing accommodations, for any
    24  determination issued by the division of housing  and  community  renewal
    25  after  the  effective  date  of  the  rent  act of 2015, based upon cash
    26  purchase price exclusive of interest or service charges].  Notwithstand-
    27  ing anything to the contrary  contained  herein,  no  hardship  increase
    28  granted pursuant to this paragraph shall, when added to the annual gross
    29  rents,  as  determined  by  the commissioner, exceed the sum of, (i) the
    30  annual operating expenses, (ii) an allowance for management services  as
    31  determined  by  the  commissioner,  (iii)  actual  annual  mortgage debt
    32  service (interest and amortization) on its  indebtedness  to  a  lending
    33  institution,  an  insurance  company,  a retirement fund or welfare fund
    34  which is operated under the supervision of the banking or insurance laws
    35  of the state of New York or the United States, and (iv) eight  and  one-
    36  half  percent  of  that portion of the fair market value of the property
    37  which exceeds the unpaid principal amount of the  mortgage  indebtedness
    38  referred  to  in subparagraph (iii) of this paragraph. Fair market value
    39  for the purposes of this paragraph shall be six times the  annual  gross
    40  rent.  The  collection  of  any  increase in the stabilized rent for any
    41  apartment pursuant to this paragraph shall not exceed six percent in any
    42  year from the effective date of the order granting the increase over the
    43  rent set forth in the schedule of gross rents,  with  collectability  of
    44  any  dollar excess above said sum to be spread forward in similar incre-
    45  ments and added to the stabilized rent as established or set  in  future
    46  years;
    47    §  10.  Subdivision  f of section 26-512 of the administrative code of
    48  the city of New York, as added by chapter 116 of the laws  of  1997,  is
    49  amended to read as follows:
    50    f.  Notwithstanding  any  provision of this law to the contrary in the
    51  case where all tenants named in a lease have permanently vacated a hous-
    52  ing accommodation and a family member of such tenant or tenants is enti-
    53  tled to and executes a renewal lease for the  housing  accommodation  if
    54  such accommodation continues to be subject to this law after such family
    55  member  vacates,  on  the occurrence of such vacancy the legal regulated
    56  rent shall be increased by a sum equal to the allowance then  in  effect

        S. 3693                            16
     1  for vacancy leases, including the amount allowed by paragraph [(five-a)]
     2  five-a  of  subdivision  c  of section 26-511 of this law. Such increase
     3  shall be in addition to any other increases provided  for  in  this  law
     4  including  an  adjustment based upon [a major capital improvement, or] a
     5  substantial modification or increase of dwelling space or  services,  or
     6  installation  of  new  equipment  or  improvements  or  new furniture or
     7  furnishings provided in or to  the  housing  accommodation  pursuant  to
     8  section  26-511  of  this  law and shall be applicable in like manner to
     9  each second subsequent succession.
    10    § 11. If any clause, sentence, paragraph, subdivision, section or part
    11  of this act shall be adjudged by any court of competent jurisdiction  to
    12  be  invalid,  such  judgment shall not affect, impair, or invalidate the
    13  remainder thereof, but shall be confined in its operation to the clause,
    14  sentence, paragraph,  subdivision,  section  or  part  thereof  directly
    15  involved  in  the  controversy  in  which  such judgment shall have been
    16  rendered. It is hereby declared to be the intent of the legislature that
    17  this act would have been enacted even if such invalid provisions had not
    18  been included herein. It is further declared to be  the  intent  of  the
    19  legislature  that  this act would have been enacted even if subdivisions
    20  (b), (c), (d), (e), (f), (g), (h), and (i) of section two  of  this  act
    21  had not been included herein.
    22    § 12. This act shall take effect immediately; provided:
    23    (a)  that  the amendments to sections 4 and 5 of the emergency housing
    24  rent control law made by section three of this act shall expire  on  the
    25  same  date  as  such  law expires and shall not affect the expiration of
    26  such law as provided in subdivision 2 of section 1 of chapter 274 of the
    27  laws of 1946;
    28    (b) that the amendments to sections 6 and 10 of section 4 of the emer-
    29  gency tenant protection act of nineteen seventy-four  made  by  sections
    30  four  and  five  of  this  act shall expire on the same date as such act
    31  expires and shall not affect the expiration of such act as  provided  in
    32  section 17 of chapter 576 of the laws of 1974;
    33    (c)  that the amendments to section 26-511 of chapter 4 of title 26 of
    34  the administrative code of the city of New York made by section nine  of
    35  this act shall expire on the same date as such law expires and shall not
    36  affect  the  expiration  of such law as provided under section 26-520 of
    37  such law;
    38    (d) that the amendments to section 26-512 of chapter 4 of title 26  of
    39  the  administrative  code of the city of New York made by section ten of
    40  this act shall expire on the same date as such law expires and shall not
    41  affect the expiration of such law as provided under  section  26-520  of
    42  such law; and
    43    (e) that the amendments to sections 26-403.2, 26-405 and 26-407 of the
    44  city  rent and rehabilitation law made by sections six, seven, and eight
    45  of this act shall remain in full force and effect only as  long  as  the
    46  public  emergency  requiring  the  regulation and control of residential
    47  rents and evictions continues, as provided in subdivision 3 of section 1
    48  of the local emergency housing rent control act.
    49    (f) Effective immediately, the addition, amendment  and/or  repeal  of
    50  any  rule  or regulation necessary for the implementation of this act on
    51  its effective date are authorized and directed to be made and  completed
    52  on or before such effective date.
feedback