Bill Text: NY S06352 | 2023-2024 | General Assembly | Amended
Bill Title: Provides that when a housing accommodation has been vacated after continuous tenancy or occupancy of ten years or more prior to vacancy, and the owner can demonstrate restoration of the unit, the new legal regulated rent shall be the rent agreed to by the owner and first tenant after such restoration and reserved in a lease or other rental agreement; makes related provisions.
Spectrum: Partisan Bill (Democrat 10-0)
Status: (Introduced) 2024-02-09 - PRINT NUMBER 6352C [S06352 Detail]
Download: New_York-2023-S06352-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6352--C 2023-2024 Regular Sessions IN SENATE April 17, 2023 ___________ Introduced by Sens. COMRIE, FERNANDEZ, SEPULVEDA, ADDABBO, MANNION, MARTINEZ, PARKER, PERSAUD, SCARCELLA-SPANTON, SKOUFIS, THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Hous- ing, Construction and Community Development in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the administrative code of the city of New York, in relation to certain housing accommodations; and to amend the emergency tenant protection act of nineteen seventy-four, in relation to certain hardship provisions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision c of section 26-511 of the administrative code 2 of the city of New York is amended by adding a new paragraph 16 to read 3 as follows: 4 (16) provides that, notwithstanding any other provision of this chap- 5 ter to the contrary, when a housing accommodation subject to this chap- 6 ter has been vacated after continuous tenancy or occupancy of ten years 7 or more prior to vacancy, and the owner can demonstrate restoration of 8 the unit as set forth in section 26-511.2 of this chapter, the new legal 9 regulated rent shall be the rent agreed to by the owner and first tenant 10 after such restoration and reserved in a lease or other rental agree- 11 ment; provided that such new legal regulated rent: (i) shall not exceed 12 the section 8 voucher payment standard adopted by a local public housing 13 agency for a unit of the same size and located within the same zip code 14 that was in effect at the time the lease was executed; and (ii) may be EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10320-17-4S. 6352--C 2 1 adjusted on audit by the division under section 26-511.2 of this chap- 2 ter, or on application of a tenant or owner under section 26-513.1 of 3 this chapter. The legal regulated rent adjustment set forth in this 4 paragraph shall be known as the local regulated housing restoration 5 adjustment. 6 § 2. The administrative code of the city of New York is amended by 7 adding a new section 26-511.2 to read as follows: 8 § 26-511.2 The local regulated housing restoration adjustment. a. The 9 division of housing and community renewal, the "division" shall estab- 10 lish a notification procedure and documentation submission guidelines 11 for the local regulated housing restoration adjustment. Documentation 12 to qualify for the local regulated housing restoration adjustment shall 13 be limited to: 14 (1) XRF test results or other documentation demonstrating a lead-free 15 housing accommodation under applicable local definitions; 16 (2) any required tenant protection plans or similar submissions to the 17 local building department in connection with such restoration; 18 (3) any required contractor licenses or certifications; 19 (4) list and specifications of new electric appliances installed; 20 (5) before and after photos; 21 (6) lease or rental agreement listing new legal regulated rent; 22 (7) evidence of renting to a housing subsidy voucher holder, or the 23 section 8 voucher payment standard adopted by a local public housing 24 agency for a unit of the same size and located within the same zip code 25 that was in effect at the time the lease was executed; 26 (8) evidence of renting to a housing subsidy voucher holder, or 27 documentation confirming that, as of the date of the commencement of the 28 incoming tenant's lease, any physical condition within the unit that was 29 the basis for a previously issued violation has been corrected; and 30 (9) for units vacated after the effective date of this section, a form 31 to be promulgated by the division and signed by the previous tenant 32 affirming that the vacatur prior to the local regulated housing restora- 33 tion adjustment was voluntary and not the result of unlawful owner 34 harassment. In considering the sufficiency of alternate documentation, 35 and notwithstanding other potentially sufficient documentation, vacatur 36 shall be presumed voluntary and not the result of owner harassment when 37 (i) the owner recovered possession of the unit through judicial 38 proceedings, (ii) the owner demonstrates abandonment of the unit through 39 electronic communications, recordings, or other evidence of voluntary 40 vacatur, or (iii) the owner demonstrates the previous tenant died and 41 the unit was not occupied by a lawful successor. 42 b. The local regulated housing restoration adjustment shall not be 43 permitted: 44 (1) for units that are rented within a twenty-four-month period after 45 an arm's length transfer of ownership; 46 (2) for units that are rented within a thirty-six-month period after 47 determination by the division that the owner has engaged in unlawful 48 harassment with respect to the unit; 49 (3) for units in buildings subject to housing preservation and devel- 50 opment's alternative enforcement program; or 51 (4) after an unlawful eviction. 52 c. The division shall establish an audit process to review a percent- 53 age, as established by the division, of housing accommodations that 54 register adjusted legal regulated rents under the local regulated hous- 55 ing restoration adjustment. The division's established audit process 56 shall be subject to the following requirements:S. 6352--C 3 1 (1) any audit shall be limited to: (i) confirmation that documentation 2 set forth in subdivision a of this section has been submitted; and (ii) 3 unless rented to a housing subsidy voucher holder, confirmation that the 4 unit's agreed rent does not exceed the section 8 voucher payment stand- 5 ard adopted by a local public housing agency for a unit of the same size 6 and located within the same zip code that was in effect at the time the 7 lease was executed. Such audit shall be initiated within one year of 8 the filing of an annual apartment registration indicating an adjustment 9 to the legal regulated rent under the local regulated housing restora- 10 tion adjustment; and 11 (2) if an audit under this subdivision determines that (i) an owner 12 has failed to submit documentation set forth in subdivision a of this 13 section and the owner then fails to submit any missing documentation 14 after sixty days' written notice from the division, or (ii) the local 15 housing restoration adjustment exceeds the section 8 voucher payment 16 standard adopted by a local public housing agency for a unit of the same 17 size and located within the same zip code that was in effect at the time 18 the lease was executed, the division shall set the subject unit's legal 19 regulated rent at an amount equal to seventy-five percent of the section 20 8 voucher payment standard adopted by a local public housing agency for 21 a unit of the same size and located within the same zip code that was in 22 effect at the time the lease was executed, except that the legal regu- 23 lated rents for units subject to housing subsidy vouchers shall be 24 established at the contract rent amount approved by the agency adminis- 25 tering the voucher. 26 (3) Any required refunds shall be made in accordance with section 27 26-513.1 of this chapter. 28 d. To encourage rental of units subject to a local housing restoration 29 adjustment to individuals and families with housing subsidy vouchers or 30 that are in communities of need, the division shall establish incen- 31 tives, in addition to those already contained in this section, for hous- 32 ing providers who rent to housing subsidy voucher holders located in 33 very low- and low-income zip codes. 34 e. Access to the documentation submitted as part of the local regu- 35 lated housing restoration adjustment shall be governed by the same laws 36 governing access to building and apartment registrations filed with the 37 division. 38 § 3. The administrative code of the city of New York is amended by 39 adding a new section 26-513.1 to read as follows: 40 § 26-513.1 Application for adjustment of local regulated housing 41 restoration adjustment. a. The tenant of a housing accommodation that 42 was vacant on, or became vacant after, June 14, 2019, and has been 43 subject to the local regulated housing restoration adjustment, may file 44 with the commissioner of housing and community renewal within 120 days 45 after notice has been received under subdivision c of this section an 46 application for the adjustment of the rent for such housing accommo- 47 dation. Such applications shall be subject to the following: 48 (1) in the application, the tenant must allege that the local regu- 49 lated housing restoration adjustment rent exceeds the section 8 voucher 50 payment standard adopted by a local public housing agency for a unit of 51 the same size and located within the same zip code that was in effect at 52 the time the lease was executed. 53 (2) in determining an application filed pursuant to this section, the 54 commissioner shall only consider whether the subject rent exceeds the 55 section 8 voucher payment standard adopted by a local public housingS. 6352--C 4 1 agency for a unit of the same size and located within the same zip code 2 that was in effect at the time the lease was executed. 3 (3) the owner of the housing accommodation subject to an application 4 under this section shall be given an opportunity to submit a written 5 answer to any application. 6 (4) when the local regulated housing restoration adjustment rent 7 amount is determined to exceed the section 8 voucher payment standard 8 adopted by a local public housing agency for a unit of the same size and 9 located within the same zip code that was in effect at the time the 10 lease was executed, the commissioner of housing and community renewal 11 shall order that the legal regulated rent for the subject unit shall be 12 equal to seventy-five percent of the section 8 voucher payment standard 13 adopted by a local public housing agency for a unit of the same size and 14 located within the same zip code that was in effect at the time the 15 lease was executed; except that the legal regulated rents for units 16 subject to housing subsidy vouchers shall be equal to the contract rent 17 amount approved by the local housing authority that issues the voucher. 18 Any required refunds shall be made by the owner in cash or as a credit 19 against unpaid rent over a period not to exceed six months. 20 b. Notwithstanding subdivision a of this section, provided that the 21 owner has submitted to the division documentation in accordance with 22 subdivision a of section 26-511.2 of this chapter, the division shall 23 only determine whether the tenancy is subject to a housing subsidy 24 voucher and, if not, whether the rent charged to the first tenant after 25 the local regulated housing restoration adjustment exceeds the section 8 26 voucher payment standard adopted by a local public housing agency for a 27 unit of the same size located within the same zip code that was in 28 effect at the time the lease was executed. Any documentation deficien- 29 cies shall be resolved through the audit process set forth in section 30 26-511.2 of this chapter. 31 c. In the lease execution package for the first lease after the legal 32 rent was adjusted under the local regulated housing restoration adjust- 33 ment, the owner shall give notice, both in the lease and subsequently in 34 writing by certified mail, or by electronic delivery if the tenant has 35 opted to receive electronic delivery of documents, to the tenant of such 36 housing accommodation on a form prescribed by the commissioner of hous- 37 ing and community renewal that the local regulated housing restoration 38 adjustment was applied, including notification of the prior legal regu- 39 lated rent, a description of work completed, the building address and 40 the section 8 voucher payment standard adopted by a local public housing 41 agency for a unit of the same size and located within the same zip code 42 that was in effect at the time the lease was executed, and such tenant's 43 right to file an application challenging the new legal regulated rent of 44 such housing accommodation. 45 § 4. Paragraph 5 of subdivision d of section 6 of section 4 of chapter 46 576 of the laws of 1974, constituting the emergency tenant protection 47 act of nineteen seventy-four, as amended by chapter 102 of the laws of 48 1984, is amended and a new paragraph 6 is added to read as follows: 49 (5) as an alternative to the hardship application provided under para- 50 graph four of this subdivision, owners of buildings acquired by the same 51 owner or a related entity owned by the same principals three years prior 52 to the date of application may apply to the division for increases in 53 excess of the level of applicable guideline increases established under 54 this law based on a finding by the commissioner that such guideline 55 increases are not sufficient to enable the owner to maintain an annual 56 gross rent income for such building which exceeds the annual operatingS. 6352--C 5 1 expenses of such building by a sum equal to at least five percent of 2 such gross rent. For the purposes of this paragraph, operating expenses 3 shall consist of the actual, reasonable, costs of fuel, labor, utili- 4 ties, taxes, other than income or corporate franchise taxes, fees, 5 permits, necessary contracted services and non-capital repairs, insur- 6 ance, parts and supplies, management fees and other administrative costs 7 and mortgage interest. For the purposes of this paragraph, mortgage 8 interest shall be deemed to mean interest on a bona fide mortgage 9 including an allocable portion of charges related thereto. Criteria to 10 be considered in determining a bona fide mortgage other than an institu- 11 tional mortgage shall include; condition of the property, location of 12 the property, the existing mortgage market at the time the mortgage is 13 placed, the term of the mortgage, the amortization rate, the principal 14 amount of the mortgage, security and other terms and conditions of the 15 mortgage. The commissioner shall set a rental value for any unit occu- 16 pied by the owner or a person related to the owner or unoccupied at the 17 owner's choice for more than one month at the last regulated rent plus 18 the minimum number of guidelines increases or, if no such regulated rent 19 existed or is known, the commissioner shall impute a rent consistent 20 with other rents in the building. The amount of hardship increase shall 21 be such as may be required to maintain the annual gross rent income as 22 provided by this paragraph. The division shall not grant a hardship 23 application under this paragraph or paragraph four of this subdivision 24 for a period of three years subsequent to granting a hardship applica- 25 tion under the provisions of this paragraph. The collection of any 26 increase in the rent for any housing accommodation pursuant to this 27 paragraph shall not exceed six percent in any year from the effective 28 date of the order granting the increase over the rent set forth in the 29 schedule of gross rents, with collectability of any dollar excess above 30 said sum to be spread forward in similar increments and added to the 31 rent as established or set in future years. No application shall be 32 approved unless the owner's equity in such building exceeds five percent 33 of: (i) the arms length purchase price of the property; (ii) the cost of 34 any capital improvements for which the owner has not collected a 35 surcharge; (iii) any repayment of principal of any mortgage or loan used 36 to finance the purchase of the property or any capital improvements for 37 which the owner has not collected a surcharge; and (iv) any increase in 38 the equalized assessed value of the property which occurred subsequent 39 to the first valuation of the property after purchase by the owner. For 40 the purposes of this paragraph, owner's equity shall mean the sum of (i) 41 the purchase price of the property less the principal of any mortgage or 42 loan used to finance the purchase of the property, (ii) the cost of any 43 capital improvement for which the owner has not collected a surcharge 44 less the principal of any mortgage or loan used to finance said improve- 45 ment, (iii) any repayment of the principal of any mortgage or loan used 46 to finance the purchase of the property or any capital improvement for 47 which the owner has not collected a surcharge, and (iv) any increase in 48 the equalized assessed value of the property which occurred subsequent 49 to the first valuation of the property after purchase by the owner[.]; 50 or 51 (6) provides that, notwithstanding any other provision of this chapter 52 to the contrary, when a housing accommodation subject to this chapter 53 has been vacated after continuous tenancy or occupancy of ten years or 54 more prior to vacancy, and the owner can demonstrate restoration of the 55 unit as set forth in subdivision (a-1) of section ten of this chapter, 56 the new legal regulated rent shall be the rent agreed to by the ownerS. 6352--C 6 1 and first tenant after such restoration and reserved in a lease or other 2 rental agreement; provided that such new legal regulated rent: (i) 3 shall not exceed the section 8 voucher payment standard adopted by a 4 local public housing agency for a unit of the same size and located 5 within the same zip code that was in effect at the time the lease was 6 executed; and (ii) may be adjusted on audit by the division under subdi- 7 vision (a-1) of section ten of this chapter, or on application of a 8 tenant or owner under subdivision d-1 of section nine of this chapter. 9 The legal regulated rent adjustment set forth in this paragraph shall be 10 known as the local regulated housing restoration adjustment. 11 § 5. Section 10 of section 4 of chapter 576 of the laws of 1974, 12 constituting the emergency tenant protection act of nineteen seventy- 13 four is amended by adding a new subdivision (a-1) to read as follows: 14 (a-1) the division of housing and community renewal shall establish a 15 notification procedure and documentation submission guidelines for the 16 local regulated housing restoration adjustment. a. Documentation to 17 qualify for the local regulated housing restoration adjustment shall be 18 limited to: 19 (1) XRF test results or other documentation demonstrating a lead-free 20 housing accommodation under applicable local definitions; 21 (2) any required tenant protection plans or similar submissions to the 22 local building department in connection with such restoration; 23 (3) any required contractor licenses or certifications; 24 (4) list and specifications of new electric appliances installed; 25 (5) before and after photos; 26 (6) lease or rental agreement listing new legal regulated rent; 27 (7) evidence of renting to a housing subsidy voucher holder, or the 28 section 8 voucher payment standard adopted by a local public housing 29 agency for a unit of the same size and located within the same zip code 30 that was in effect at the time the lease was executed; 31 (8) evidence of renting to a housing subsidy voucher holder, or 32 documentation confirming that, as of the date of the commencement of the 33 incoming tenant's lease, any physical condition within the unit that was 34 the basis for a previously issued violation has been corrected; and 35 (9) for units vacated after the effective date of this subdivision, a 36 form to be promulgated by the division and signed by the previous tenant 37 affirming that the vacatur prior to the local regulated housing restora- 38 tion adjustment was voluntary and not the result of unlawful owner 39 harassment. In considering the sufficiency of alternate documentation, 40 and notwithstanding other potentially sufficient documentation, vacatur 41 shall be presumed voluntary and not the result of owner harassment when 42 (i) the owner recovered possession of the unit through judicial 43 proceedings, (ii) the owner demonstrates abandonment of the unit through 44 electronic communications, recordings, or other evidence of voluntary 45 vacatur, or (iii) the owner demonstrates the previous tenant died and 46 the unit was not occupied by a lawful successor. 47 b. The local regulated housing restoration adjustment shall not be 48 permitted: 49 (1) for units that are rented within a twenty-four-month period after 50 an arm's length transfer of ownership; 51 (2) for units that are rented within a thirty-six-month period after 52 determination by the division that the owner has engaged in unlawful 53 harassment with respect to the unit; 54 (3) for units in buildings subject to housing preservation and devel- 55 opment's alternative enforcement program; or 56 (4) after an unlawful eviction.S. 6352--C 7 1 c. The division of housing and community renewal shall establish an 2 audit process to review a percentage, as established by the division, of 3 housing accommodations that register adjusted legal regulated rents 4 under the local regulated housing restoration adjustment. The divi- 5 sion's established audit process shall be subject to the following 6 requirements: 7 (1) any audit shall be limited to: (i) confirmation that documentation 8 set forth in paragraph a of this subdivision has been submitted; and 9 (ii) unless rented to a housing subsidy voucher holder, confirmation 10 that the units agreed upon rent as reserved in a lease agreement does 11 not exceed the section 8 voucher payment standard adopted by a local 12 public housing agency for a unit of the same size and located within the 13 same zip code that was in effect at the time the lease was executed. 14 Such audit shall be initiated within one year of the filing of an annual 15 apartment registration indicating an adjustment to the legal regulated 16 rent under the local regulated housing restoration adjustment; and 17 (2) if an audit under this subdivision determines that: (i) an owner 18 has failed to submit documentation set forth in subdivision a of this 19 section and the owner then fails to submit any missing documentation 20 after sixty days' written notice from the division; or (ii) the local 21 housing restoration adjustment exceeds the section 8 voucher payment 22 standard adopted by a local public housing agency for a unit of the same 23 size and located within the same zip code that was in effect at the time 24 the lease was executed, the division shall set the subject unit's legal 25 regulated rent at an amount equal to seventy-five percent of the section 26 8 voucher payment standard adopted by a local public housing agency for 27 a unit of the same size and located within the same zip code that was in 28 effect at the time the lease was executed, provided, however, that the 29 legal regulated rents for units subject to housing subsidy vouchers 30 shall be established at the contract rent amount approved by the agency 31 administering the voucher. 32 (3) Any required refunds shall be made in accordance with section 33 26-513.1 of this chapter. 34 d. To encourage rental of units subject to a local housing restoration 35 adjustment to individuals and families with housing subsidy vouchers or 36 that are in communities of need, the division shall establish incen- 37 tives, in addition to those already contained in this section, for hous- 38 ing providers who rent to housing subsidy voucher holders located in 39 very low- and low-income zip codes. 40 e. Access to the documentation submitted as part of the local regu- 41 lated housing restoration adjustment shall be governed by the same laws 42 governing access to building and apartment registrations filed with the 43 division. 44 § 6. Section 9 of section 4 of chapter 576 of the laws of 1974, 45 constituting the emergency tenant protection act of nineteen seventy- 46 four is amended by adding a new subdivision d-1 to read as follows: 47 d-1. (1) The tenant of a housing accommodation that was vacant on, or 48 became vacant after, June 14, 2019, and has been subject to the local 49 regulated housing restoration adjustment, may file with the commissioner 50 within 120 days after notice has been received under paragraph three of 51 this subdivision an application for the adjustment of the rent for such 52 housing accommodation. Such applications shall be subject to the 53 following: 54 (i) in the application, the tenant must allege that the local regu- 55 lated housing restoration adjustment rent exceeds the section 8 voucher 56 payment standard adopted by a local public housing agency for a unit ofS. 6352--C 8 1 the same size and located within the same zip code that was in effect at 2 the time the lease was executed; 3 (ii) in determining an application filed pursuant to this section, the 4 commissioner of housing and community renewal shall only consider wheth- 5 er the subject rent exceeds the section 8 voucher payment standard 6 adopted by a local public housing agency for a unit of the same size and 7 located within the same zip code that was in effect at the time the 8 lease was executed; 9 (iii) the owner of the housing accommodation subject to an application 10 under this section shall be given an opportunity to submit a written 11 answer to any application; and 12 (iv) when the local regulated housing restoration adjustment rent 13 amount is determined to exceed the section 8 voucher payment standard 14 adopted by a local public housing agency for a unit of the same size and 15 located within the same zip code that was in effect at the time the 16 lease was executed, the commissioner of housing and community renewal 17 shall order that the legal regulated rent for the subject unit shall be 18 equal to seventy-five percent of the section 8 voucher payment standard 19 adopted by a local public housing agency for a unit of the same size and 20 located within the same zip code that was in effect at the time the 21 lease was executed; provided, however, that the legal regulated rents 22 for units subject to housing subsidy vouchers shall be equal to the 23 contract rent amounts approved by the local housing agency administering 24 the voucher. Any required refunds shall be made by the owner in cash or 25 as a credit against unpaid rent over a period not to exceed six months. 26 (2) Notwithstanding paragraph a of this subdivision, provided that the 27 owner has submitted to the division documentation in accordance with 28 subdivision (a-1) of section ten of this chapter, the division shall 29 only determine whether the tenancy is subject to a housing subsidy 30 voucher and, if not, whether the rent charged to the first tenant after 31 the local regulated housing restoration adjustment exceeds the section 8 32 voucher payment standard adopted by a local public housing agency for a 33 unit of the same size located within the same zip code that was in 34 effect at the time the lease was executed. Any documentation deficien- 35 cies shall be resolved through the audit process set forth in subdivi- 36 sion (a-1) of section ten of this chapter. 37 (3) In the lease execution package for the first lease after the legal 38 rent was adjusted under the local regulated housing restoration adjust- 39 ment, the owner shall give notice, both in the lease and subsequently in 40 writing by certified mail, or by electronic delivery if the tenant has 41 opted to receive electronic delivery of documents, to the tenant of such 42 housing accommodation on a form prescribed by the commissioner of hous- 43 ing and community renewal that the local regulated housing restoration 44 adjustment was applied, including notification of the prior legal regu- 45 lated rent, a description of work completed, the building address and 46 the section 8 voucher payment standard adopted by a local public housing 47 agency for a unit of the same size and located within the same zip code 48 that was in effect at the time the lease was executed, and such tenant's 49 right to file an application for adjustment of the new legal regulated 50 rent of such housing accommodation. 51 § 7. This act shall take effect immediately; and provided that the 52 amendments to chapter 4 of title 26 of the administrative code of the 53 city of New York made by sections one, two and three of this act shall 54 expire on the same date as such law expires and shall not affect the 55 expiration of such law as provided under section 26-520 of such law.