Bill Text: NY S09154 | 2017-2018 | General Assembly | Amended


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

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2018-08-31 - PRINT NUMBER 9154A [S09154 Detail]

Download: New_York-2017-S09154-Amended.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                         9154--A
                    IN SENATE
                                     August 24, 2018
                                       ___________
        Introduced  by Sens. GIANARIS, AVELLA -- read twice and ordered printed,
          and when printed to be committed to the Committee on Rules --  commit-
          tee  discharged, bill amended, ordered reprinted as amended and recom-
          mitted to said committee
        AN ACT eliminating the department of homes and community renewal's major
          capital improvement  program;  creating  the  guaranteed  habitability
          protections  program  within  the  department  of  homes and community
          renewal; to amend the tax law, in relation to  creating  a  guaranteed
          habitability  protections tax credit; to amend chapter 274 of the laws
          of 1946, constituting the emergency  housing  rent  control  law,  the
          emergency  tenant  protection  act  of  nineteen  seventy-four and the
          administrative code of the city of New York, in relation to  eliminat-
          ing 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. (a) The department of homes and community renewal shall end
     2  the major capital improvement program. All increases  to  rents  allowed
     3  during  the  life  of  the  major  capital  improvement program shall be
     4  repealed upon petition from a tenant, all  applications  pending  review
     5  for  the  major capital improvement program shall be denied, and no rent
     6  increases shall be allowed under the major capital improvement program.
     7    (b) The department of homes and community renewal, upon repealing  any
     8  increase  in  rent  under  the  major capital improvement program, shall
     9  require that the rent is reduced by an  amount  equal  to  that  of  the
    10  increase  allowed  under  the  major capital improvement program in that
    11  instance for all current tenants affected  by  such  increase  provided,
    12  however,  that  no  rent  shall  be  reduced to an amount lower than the
    13  amount such rent was ten years or more in the past. This rent  shall  be
    14  considered the legal rent and shall no longer by a preferential rent.
    15    (c)  The  department of homes and community renewal shall require that
    16  any increase in a tenant's security deposit due to an increase  in  rent
    17  under  the  major capital improvement program be repaid to the tenant by
    18  the landlord within thirty days of such repeal.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16373-06-8

        S. 9154--A                          2
     1    (d) The new legal rent shall be the legal rent beginning on  the  date
     2  rent  is  required  to  be  paid  next succeeding the repeal of any rent
     3  increase under the major capital improvement program.
     4    (e) Any lease signed after a repeal of a rent increase under the major
     5  capital  improvement  program  shall be tied to the new legal rent which
     6  shall be  without  such  repealed  increases  under  the  major  capital
     7  improvement program.
     8    (f)  The  department  of  homes and community renewal shall notify all
     9  current tenants affected by an increase in rent under the major  capital
    10  improvement  program  that  they  can  appeal to such department for the
    11  repeal of such increase in rent and that any increase in rent under  the
    12  major  capital  improvement  program that is repealed will result in the
    13  reduction of rent and the repayment  of  the  various  security  deposit
    14  increases associated with said increases.
    15    (g)  The  department  of homes and community renewal shall, within one
    16  year of the effective date of this act, consider  all  appeals  for  the
    17  repeal  of  an  increase  in  rent  under  the major capital improvement
    18  program. If an appeal was filed but not ruled  upon  after  an  investi-
    19  gation  within one year of the effective date of this act by the depart-
    20  ment of homes and community renewal, the appeal shall be granted.
    21    § 2. (a) The department of  homes  and  community  renewal  is  hereby
    22  authorized   and   directed   to  establish  a  guaranteed  habitability
    23  protections program and promulgate, amend, add or remove  any  rules  or
    24  regulations necessary to establish such program.
    25    (b)  The  program  shall work to ensure the habitability of all rental
    26  dwellings, specifically that no rental dwelling becomes uninhabitable by
    27  requiring regular updates and improvements to rental dwellings. A rental
    28  dwelling shall be deemed uninhabitable where it is not safe and  livable
    29  and the landlord would be in violation of the warranty of habitability.
    30    (c) When the department of homes and community renewal determines that
    31  any  unit of a rental dwelling has an issue which may impact the habita-
    32  bility of the unity, such  department  under  this  program  shall  give
    33  notice  to  the  landlord.  Where the issue is not life threatening, the
    34  landlord shall have within thirty  days  to  rectify  the  issue  before
    35  incurring  a  violation.  Where the issue is life threatening, as deter-
    36  mined by the department of homes and  community  renewal,  the  landlord
    37  shall  have  an amount of time as determined by such department based on
    38  the severity of the issue  to  rectify  the  issue  before  incurring  a
    39  violation. The department of homes and community renewal shall determine
    40  which  issues are and which issues are not life threatening. Upon incur-
    41  ring a violation, the landlord shall have the same  amount  of  time  to
    42  rectify  the issue before incurring another violation. An issue shall be
    43  deemed rectified when the issue no longer exists  or  the  tenants  have
    44  been  moved  into  another  unit of equal or greater quality, where such
    45  determination of quality shall be made by the department  of  homes  and
    46  community renewal. A landlord shall be fined:
    47    (i)  $10,000  for the first violation involving a non-life threatening
    48  issue;
    49    (ii) $25,000 for the second violation involving a non-life threatening
    50  issue;
    51    (iii) $50,000 for the third and each subsequent violation involving  a
    52  non-life threatening issue; and
    53    (iv)  $100,000  for  each resident of an affected unit for a violation
    54  involving a life threatening issue.
    55    § 3. Section 210-B of the tax law is amended by adding a new  subdivi-
    56  sion 53 to read as follows:

        S. 9154--A                          3
     1    53.  Guaranteed  habitability protections tax credit. (a) Allowance of
     2  credit. A  taxpayer  with  approval  from  the  guaranteed  habitability
     3  protections  program  of  the  department of homes and community renewal
     4  shall be allowed a credit, to be computed as provided in  paragraph  (b)
     5  of this subdivision, against the tax imposed by this article.
     6    (b)  Amount of credit. The credit allowed pursuant to paragraph (a) of
     7  this subdivision shall be in an amount equal to the amount  approved  by
     8  the  guaranteed  habitability  protections  program of the department of
     9  homes and community renewal.
    10    (c) Application of credit. The credit allowed under  this  subdivision
    11  for  any taxable year shall not reduce the tax due for such year to less
    12  than the amount prescribed  in  paragraph  (d)  of  subdivision  one  of
    13  section  two  hundred  ten  of  this article. If, however, the amount of
    14  credits allowed under this subdivision for any taxable year reduces  the
    15  tax  to  such  amount,  any amount of credit thus not deductible in such
    16  taxable year shall be treated as an overpayment of tax to be credited or
    17  refunded in accordance with  the  provisions  of  section  one  thousand
    18  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    19  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    20  notwithstanding, no interest shall be paid thereon.
    21    §  4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
    22  of the tax law is amended by adding a  new  clause  (xliv)  to  read  as
    23  follows:
    24  (xliv) Guaranteed habitability        Amount of credit under
    25  protections tax credit under          subdivision fifty-three of
    26  subsection (jjj)                      section two hundred ten-B
    27    §  5. Section 606 of the tax law is amended by adding a new subsection
    28  (jjj) to read as follows:
    29    (jjj) Guaranteed habitability protections tax credit. (1) Allowance of
    30  credit. A  taxpayer  with  approval  from  the  guaranteed  habitability
    31  protections  program  of  the  department of homes and community renewal
    32  shall be allowed a credit, to be computed as provided in  paragraph  two
    33  of this subsection, against the tax imposed by this article.
    34    (2)  Amount of credit. The credit allowed pursuant to paragraph one of
    35  this subsection shall be in an amount equal to the  amount  approved  by
    36  the  guaranteed  habitability  protections  program of the department of
    37  homes and community renewal.
    38    (3) Application of credit. If the amount of the credit  allowed  under
    39  this subsection for any taxable year shall exceed the taxpayer's tax for
    40  such  year,  the  excess shall be treated as an overpayment of tax to be
    41  credited or refunded in accordance with the provisions  of  section  six
    42  hundred  eighty-six of this article, provided, however, that no interest
    43  shall be paid thereon.
    44    § 6. Paragraph 2 of subdivision 3-a of section 4,  subparagraph  (iii)
    45  of the opening paragraph of paragraph (a) of subdivision 4 of section 4,
    46  subparagraphs  7,  8,  9  and 10 of the second undesignated paragraph of
    47  paragraph (a) of subdivision 4  of  section  4,  and  subdivision  9  of
    48  section 5 of chapter 274 of the laws of 1946, constituting the emergency
    49  housing rent control law, as amended by chapter 337 of the laws of 1961,
    50  subparagraph  (iii)  of  paragraph  (a) of subdivision 4 of section 4 as
    51  amended by chapter 21 of the laws of 1962, subparagraphs 8, 9 and 10  of
    52  the  second  undesignated paragraph of paragraph (a) of subdivision 4 of
    53  section 4 as amended by section 25 of part B of chapter 97 of  the  laws
    54  of  2011,  subparagraph  7 of the second undesignated paragraph of para-
    55  graph (a) of subdivision 4 of section 4 as amended by section 32 of part
    56  A of chapter 20 of the laws of 2015, and subdivision 9 of section  5  as

        S. 9154--A                          4
     1  added  by  chapter  116  of  the  laws  of  1997, are amended to read as
     2  follows:
     3    (2)  the  amount  of  increases  in  maximum  rent authorized by order
     4  because of increases in dwelling space, services, furniture, furnishings
     5  or equipment[, or major capital improvements].
     6    (iii) The ratio of the sales price to the annual gross income  of  the
     7  property,  with  consideration given to the total amount of rent adjust-
     8  ments previously granted,  exclusive  of  rent  adjustments  because  of
     9  changes  in  dwelling  space, services, furniture, furnishings or equip-
    10  ment, [major capital improvements,] or substantial rehabilitation;
    11    (7) [there has been since March first, nineteen hundred fifty, a major
    12  capital improvement required for the operation, preservation or  mainte-
    13  nance  of  the structure; which for any order of the commissioner issued
    14  after the effective date of the rent  act  of  2015  the  cost  of  such
    15  improvement  shall  be amortized over an eight-year period for buildings
    16  with thirty-five or fewer units or a nine year period for buildings with
    17  more than thirty-five units, or (8)] there has been since  March  first,
    18  nineteen  hundred fifty, in structures containing more than four housing
    19  accommodations, other improvements made with the express consent of  the
    20  tenants  in occupancy of at least seventy-five per centum of the housing
    21  accommodations, provided, however, that no adjustment granted  hereunder
    22  shall  exceed  fifteen  per  centum  unless the tenants have agreed to a
    23  higher percentage of increase, as herein provided; or  [(9)]  (8)  there
    24  has  been, since March first, nineteen hundred fifty, a subletting with-
    25  out written consent from the landlord or an increase in  the  number  of
    26  adult  occupants  who  are  not  members  of the immediate family of the
    27  tenant, and the landlord has not been compensated therefor by adjustment
    28  of the maximum rent by lease or order of the commission or  pursuant  to
    29  the  federal  act;  or  [(10)]  (9)  the  presence of unique or peculiar
    30  circumstances materially affecting the maximum rent has  resulted  in  a
    31  maximum  rent  which  is  substantially  lower  than the rents generally
    32  prevailing in the same area for substantially similar  housing  accommo-
    33  dations.
    34    9.  Notwithstanding  any  provision of this law to the contrary in the
    35  case where all tenants occupying the housing accommodation on the effec-
    36  tive date of this subdivision have vacated the housing accommodation and
    37  a family member of such vacating tenant or tenants is  entitled  to  and
    38  continues to occupy the housing accommodation subject to the protections
    39  of  this  law, if such accommodation continues to be subject to this law
    40  after such family member vacates, on the occurrence of such vacancy  the
    41  maximum collectable rent shall be increased by a sum equal to the allow-
    42  ance  then  in  effect  for  vacancy  leases  for housing accommodations
    43  covered by the rent stabilization law of  nineteen  hundred  sixty-nine,
    44  including  the  amount  allowed  by paragraph five-a of subdivision c of
    45  section 26-511 of such law. This increase shall be in  addition  to  any
    46  other  increases provided in this law including an adjustment based upon
    47  [a major capital improvement, or] a substantial increase or decrease  in
    48  dwelling  space  or  a change in the services, furniture, furnishings or
    49  equipment provided in the housing  accommodation,  pursuant  to  section
    50  four  of  this law and shall be applicable in like manner to each second
    51  subsequent succession.
    52    § 7. Paragraphs 3, 4, and 5 of subdivision  d  and  subdivision  g  of
    53  section  6 of section 4 of chapter 576 of the laws of 1974, constituting
    54  the emergency tenant protection act of nineteen seventy-four,  paragraph
    55  3  of  subdivision d as amended by section 30 of part A of chapter 20 of
    56  the laws of 2015, paragraph 4 of subdivision d as amended by chapter 403

        S. 9154--A                          5
     1  of the laws of 1983, paragraph 5 of subdivision d as amended by  chapter
     2  102  of  the  laws of 1984, and subdivision g as added by chapter 116 of
     3  the laws of 1997, are amended to read as follows:
     4    (3) [there has been since January first, nineteen hundred seventy-four
     5  a  major capital improvement required for the operation, preservation or
     6  maintenance of the structure. An adjustment under this  paragraph  shall
     7  be  in  an  amount  sufficient  to amortize the cost of the improvements
     8  pursuant to this paragraph over an eight-year period for a building with
     9  thirty-five or fewer housing accommodations, or a nine-year period for a
    10  building with more than  thirty-five  housing  accommodations,  for  any
    11  determination  issued  by  the division of housing and community renewal
    12  after the effective date of the rent act of 2015, or
    13    (4)] an owner by application to the  state  division  of  housing  and
    14  community  renewal  for  increases  in  the  rents in excess of the rent
    15  adjustment authorized by the rent guidelines board under this act estab-
    16  lishes a hardship, and the state division finds that the  rate  of  rent
    17  adjustment  is  not  sufficient to enable the owner to maintain approxi-
    18  mately the same ratio between operating expenses,  including  taxes  and
    19  labor  costs but excluding debt service, financing costs, and management
    20  fees, and gross rents which prevailed on the average over the  immediate
    21  preceding  five  year  period, or for the entire life of the building if
    22  less than five years, or
    23    [(5)] (4) as an alternative to the hardship application provided under
    24  paragraph four of this subdivision, owners of buildings acquired by  the
    25  same  owner or a related entity owned by the same principals three years
    26  prior to the date of application may apply to the division for increases
    27  in excess of the level of  applicable  guideline  increases  established
    28  under  this  law based on a finding by the commissioner that such guide-
    29  line increases are not sufficient to enable the  owner  to  maintain  an
    30  annual  gross  rent  income  for  such building which exceeds the annual
    31  operating expenses of such building by a sum  equal  to  at  least  five
    32  percent  of such gross rent. For the purposes of this paragraph, operat-
    33  ing expenses shall consist of the actual,  reasonable,  costs  of  fuel,
    34  labor, utilities, taxes, other than income or corporate franchise taxes,
    35  fees,  permits,  necessary  contracted services and non-capital repairs,
    36  insurance, parts and supplies, management fees and other  administrative
    37  costs  and  mortgage interest. For the purposes of this paragraph, mort-
    38  gage interest shall be deemed to mean interest on a bona  fide  mortgage
    39  including  an allocable portion of charges related thereto.  Criteria to
    40  be considered in determining a bona fide mortgage other than an institu-
    41  tional mortgage shall include; condition of the  property,  location  of
    42  the  property,  the existing mortgage market at the time the mortgage is
    43  placed, the term of the mortgage, the amortization rate,  the  principal
    44  amount  of  the mortgage, security and other terms and conditions of the
    45  mortgage. The commissioner shall set a rental value for any  unit  occu-
    46  pied  by the owner or a person related to the owner or unoccupied at the
    47  owner's choice for more than one month at the last regulated  rent  plus
    48  the minimum number of guidelines increases or, if no such regulated rent
    49  existed  or  is  known,  the commissioner shall impute a rent consistent
    50  with other rents in the building. The amount of hardship increase  shall
    51  be  such  as may be required to maintain the annual gross rent income as
    52  provided by this paragraph. The division  shall  not  grant  a  hardship
    53  application  under  this paragraph or paragraph four of this subdivision
    54  for a period of three years subsequent to granting a  hardship  applica-
    55  tion  under  the  provisions  of  this  paragraph. The collection of any
    56  increase in the rent for any  housing  accommodation  pursuant  to  this

        S. 9154--A                          6
     1  paragraph  shall  not  exceed six percent in any year from the effective
     2  date of the order granting the increase over the rent set forth  in  the
     3  schedule  of gross rents, with collectability of any dollar excess above
     4  said  sum  to  be  spread forward in similar increments and added to the
     5  rent as established or set in future  years.  No  application  shall  be
     6  approved unless the owner's equity in such building exceeds five percent
     7  of: (i) the arms length purchase price of the property; (ii) the cost of
     8  any  capital  improvements  for  which  the  owner  has  not collected a
     9  surcharge; (iii) any repayment of principal of any mortgage or loan used
    10  to finance the purchase of the property or any capital improvements  for
    11  which  the owner has not collected a surcharge; and (iv) any increase in
    12  the equalized assessed value of the property which  occurred  subsequent
    13  to  the first valuation of the property after purchase by the owner. For
    14  the purposes of this paragraph, owner's equity shall mean the sum of (i)
    15  the purchase price of the property less the principal of any mortgage or
    16  loan used to finance the purchase of the property, (ii) the cost of  any
    17  capital  improvement  for  which the owner has not collected a surcharge
    18  less the principal of any mortgage or loan used to finance said improve-
    19  ment, (iii) any repayment of the principal of any mortgage or loan  used
    20  to  finance  the purchase of the property or any capital improvement for
    21  which the owner has not collected a surcharge, and (iv) any increase  in
    22  the  equalized  assessed value of the property which occurred subsequent
    23  to the first valuation of the property after purchase by the owner.
    24    g. Notwithstanding any provision of this act to the  contrary  in  the
    25  case where all tenants named in a lease have permanently vacated a hous-
    26  ing accommodation and a family member of such tenant or tenants is enti-
    27  tled  to  and  executes a renewal lease for the housing accommodation if
    28  such accommodation continues to be subject to this act after such family
    29  member vacates, on the occurrence of such vacancy  the  legal  regulated
    30  rent  shall  be increased by a sum equal to the allowance then in effect
    31  for vacancy leases, including the amount allowed by subdivision (a-1) of
    32  section ten of this act. Such increase shall be in addition to any other
    33  increases provided for in this act including an adjustment based upon [a
    34  major capital improvement, or] a substantial modification or increase of
    35  dwelling space or services, or installation of new equipment or improve-
    36  ments or new furniture or furnishings provided  in  or  to  the  housing
    37  accommodation, pursuant to section six of this act and shall be applica-
    38  ble in like manner to each second subsequent succession.
    39    §  8.  Subdivision  (a-1) of section 10 of section 4 of chapter 576 of
    40  the laws of 1974, constituting the emergency tenant  protection  act  of
    41  nineteen  seventy-four,  as amended by section 16-b of part A of chapter
    42  20 of the laws of 2015, is amended to read as follows:
    43    (a-1) provides that, notwithstanding any provision of  this  act,  the
    44  legal regulated rent for any vacancy lease entered into after the effec-
    45  tive  date  of  this subdivision shall be as hereinafter set forth.  The
    46  previous legal regulated rent for such housing  accommodation  shall  be
    47  increased  by  the  following: (i) if the vacancy lease is for a term of
    48  two years, twenty percent of the previous legal regulated rent; or  (ii)
    49  if  the  vacancy  lease  is for a term of one year the increase shall be
    50  twenty percent of the previous legal regulated rent less an amount equal
    51  to the difference between (a)  the  two  year  renewal  lease  guideline
    52  promulgated  by  the guidelines board of the county in which the housing
    53  accommodation is located applied to the previous  legal  regulated  rent
    54  and  (b)  the one year renewal lease guideline promulgated by the guide-
    55  lines board of the county in which the housing accommodation is  located
    56  applied  to the previous legal regulated rent. However, where the amount

        S. 9154--A                          7
     1  charged and paid by the prior tenant pursuant to paragraph  fourteen  of
     2  this  subdivision, was less than the legal regulated rent, such increase
     3  to the legal regulated rent shall not  exceed:    five  percent  of  the
     4  previous  legal  regulated rent if the last vacancy lease commenced less
     5  than two years ago; ten percent of the previous legal regulated rent  if
     6  the last vacancy commenced less than three years ago; fifteen percent of
     7  the  previous  legal  regulated rent if the last vacancy lease commenced
     8  less than four years ago; twenty percent of the previous legal regulated
     9  rent if the last vacancy lease commenced four  or  more  years  ago.  In
    10  addition,  if the legal regulated rent was not increased with respect to
    11  such housing accommodation by a permanent vacancy allowance within eight
    12  years prior to a vacancy lease executed on or after the  effective  date
    13  of  this  subdivision, the legal regulated rent may be further increased
    14  by an amount equal to the product resulting from multiplying such previ-
    15  ous legal regulated rent by six-tenths of one percent and further multi-
    16  plying the amount of rent increase resulting therefrom by the greater of
    17  (A) the number of years since  the  imposition  of  the  last  permanent
    18  vacancy  allowance,  or (B) if the rent was not increased by a permanent
    19  vacancy allowance since the housing accommodation became subject to this
    20  act, the number of  years  that  such  housing  accommodation  has  been
    21  subject  to this act. Provided that if the previous legal regulated rent
    22  was less than three hundred dollars  the  total  increase  shall  be  as
    23  calculated  above plus one hundred dollars per month. Provided, further,
    24  that if the previous legal regulated rent was  at  least  three  hundred
    25  dollars  and  no  more  than  five hundred dollars in no event shall the
    26  total increase pursuant to this subdivision be  less  than  one  hundred
    27  dollars  per  month.  Such  increase  shall  be in lieu of any allowance
    28  authorized for the one or two year renewal component thereof, but  shall
    29  be  in  addition  to any other increases authorized pursuant to this act
    30  including an adjustment based upon [a major capital improvement,  or]  a
    31  substantial  modification  or increase of dwelling space or services, or
    32  installation of new  equipment  or  improvements  or  new  furniture  or
    33  furnishings  provided  in  or  to  the housing accommodation pursuant to
    34  section six of this act.  The increase authorized  in  this  subdivision
    35  may not be implemented more than one time in any calendar year, notwith-
    36  standing the number of vacancy leases entered into in such year.
    37    §  9.  Section  26-403.2 of the administrative code of the city of New
    38  York, as added by chapter 116 of the laws of 1997, is amended to read as
    39  follows:
    40    § 26-403.2 Increase in maximum collectable rent.  Notwithstanding  any
    41  provision  of  this  law  to  the contrary in the case where all tenants
    42  occupying the housing  accommodation  on  the  effective  date  of  this
    43  section  have  vacated  the housing accommodation and a family member of
    44  such vacating tenant or tenants is entitled to and continues  to  occupy
    45  the  housing  accommodation  subject  to the protections of this law, if
    46  such accommodation continues to be subject to this law after such family
    47  member vacates, on the occurrence of such vacancy the maximum  collecta-
    48  ble  rent  shall  be  increased  by a sum equal to the allowance then in
    49  effect for vacancy leases for housing accommodations covered by the rent
    50  stabilization law of nineteen hundred sixty-nine, including  the  amount
    51  allowed  by  paragraph five-a of subdivision c of section 26-511 of such
    52  law. This increase shall be in addition to any other increases  provided
    53  for  in  this  law  including  an adjustment based upon [a major capital
    54  improvement, or] a substantial increase or decrease in dwelling space or
    55  a change in the services, furniture, furnishings or  equipment  provided

        S. 9154--A                          8
     1  in the housing accommodation, pursuant to section 26-405 of this law and
     2  shall be applicable in like manner to each second subsequent succession.
     3    §  10.  Subparagraph  (c)  of  paragraph 1 of subdivision g of section
     4  26-405 of the administrative code of the city of New York is amended  to
     5  read as follows:
     6    (c)  the  ratio  of  the sales price to the annual gross income of the
     7  property, with consideration given to the total amount of  rent  adjust-
     8  ments  previously  granted,  exclusive  of  rent  adjustments because of
     9  changes in dwelling space, services, furniture,  furnishings  or  equip-
    10  ment, [major capital improvements,] or substantial rehabilitation;
    11    §  11. Subparagraphs (g), (h), (i), (j), (k), (l), (m), (n) and (o) of
    12  paragraph 1 of subdivision g of section  26-405  of  the  administrative
    13  code  of the city of New York, subparagraph (g) as amended by section 31
    14  of part A of chapter 20 of the laws of 2015, subparagraph (k) as amended
    15  by chapter 749 of the laws of 1990, and clause 7 of subparagraph (n)  as
    16  amended  by  local  law  number  76 of the city of New York for the year
    17  2005, are amended to read as follows:
    18    (g) [There has been since July  first,  nineteen  hundred  seventy,  a
    19  major  capital  improvement  required for the operation, preservation or
    20  maintenance of the structure. An adjustment under this subparagraph  (g)
    21  for any order of the commissioner issued after the effective date of the
    22  rent  act  of 2015 shall be in an amount sufficient to amortize the cost
    23  of the improvements pursuant to this subparagraph (g) over an eight-year
    24  period for buildings with thirty-five or fewer  units  or  a  nine  year
    25  period for buildings with more than thirty-five units, or
    26    (h)]  There  have been since March first, nineteen hundred fifty-nine,
    27  in structures containing more than four  housing  accommodations,  other
    28  improvements  made  with the express consent of the tenants in occupancy
    29  of at least seventy-five  per  centum  of  the  housing  accommodations;
    30  provided,  however,  that  whenever  the city rent agency has determined
    31  that the improvements proposed were part of a plan designed for  overall
    32  improvement  of the structure or increases in services, it may authorize
    33  increases in maximum rents for all housing accommodations affected  upon
    34  the  express  consent  of the tenants in occupancy of at least fifty-one
    35  per centum of the housing accommodations, and provided further  that  no
    36  adjustment  granted hereunder shall exceed fifteen per centum unless the
    37  tenants have agreed to  a  higher  percentage  of  increase,  as  herein
    38  provided; or
    39    [(i)]  (h)  There has been, since March first, nineteen hundred fifty-
    40  nine, a subletting without written  consent  from  the  landlord  or  an
    41  increase  in  the  number  of adult occupants who are not members of the
    42  immediate family of the tenant, and the landlord has  not  been  compen-
    43  sated  therefor  by  adjustment of the maximum rent by lease or order of
    44  the city rent agency or pursuant to the state rent act  or  the  federal
    45  act; or
    46    [(j)]  (i) 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. 9154--A                          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)]  (j)  (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. 9154--A                         10
     1    [(m)]  (k)  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)](l)(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 paragraph one of subdivision g of this section  after  collection
    51  of  a rent increase pursuant to this subparagraph [(n)], with respect to
    52  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. 9154--A                         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. 9154--A                         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) 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)]  (m)  (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. 9154--A                         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    §  12.  Subdivision  a of section 26-407 of the administrative code of
    46  the 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    § 13. 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. 9154--A                         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. 9154--A                         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    §  14.  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. 9154--A                         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    § 15. This act shall take effect immediately; provided:
    11    (a) that sections three, four, and five of this  act  shall  apply  to
    12  taxable years beginning on and after January 1, 2019;
    13    (b)  that  the amendments to sections 4 and 5 of the emergency housing
    14  rent control law made by section six of this act  shall  expire  on  the
    15  same  date  as  such  law expires and shall not affect the expiration of
    16  such law as provided in subdivision 2 of section 1 of chapter 274 of the
    17  laws of 1946;
    18    (c) that the amendments to sections 6 and 10 of section 4 of the emer-
    19  gency tenant protection act of nineteen seventy-four  made  by  sections
    20  seven  and  eight  of this act shall expire on the same date as such act
    21  expires and shall not affect the expiration of such act as  provided  in
    22  section 17 of chapter 576 of the laws of 1974;
    23    (d)  that the amendments to section 26-511 of chapter 4 of title 26 of
    24  the administrative code of the city of New York made by section thirteen
    25  of this act shall expire on the same date as such law expires and  shall
    26  not  affect  the expiration of such law as provided under section 26-520
    27  of such law;
    28    (e) that the amendments to section 26-512 of chapter 4 of title 26  of
    29  the administrative code of the city of New York made by section fourteen
    30  of  this act shall expire on the same date as such law expires and shall
    31  not affect the expiration of such law as provided under  section  26-520
    32  of such law; and
    33    (f) that the amendments to sections 26-403.2, 26-405 and 26-407 of the
    34  city  rent and rehabilitation law made by sections nine, ten, eleven and
    35  twelve of this act shall remain in full force and effect only as long as
    36  the public emergency requiring the regulation and control of residential
    37  rents and evictions continues, as provided in subdivision 3 of section 1
    38  of the local emergency housing rent control act.
    39    (g) Effective immediately, the addition, amendment  and/or  repeal  of
    40  any  rule  or regulation necessary for the implementation of this act on
    41  its effective date are authorized and directed to be made and  completed
    42  on or before such effective date.
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