Bill Text: NY A01959 | 2019-2020 | General Assembly | Introduced

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Bill Title: Relates to the adjustment of maximum allowable rent and requires the division of housing and community renewal to confirm improvements have been made prior to the approval of rent increases.

Spectrum: Partisan Bill (Democrat 16-0)

Status: (Introduced - Dead) 2020-01-08 - referred to housing [A01959 Detail]

Download: New_York-2019-A01959-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          1959
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 18, 2019
                                       ___________
        Introduced  by  M.  of  A.  RICHARDSON,  MOSLEY, SIMON, ORTIZ, COLTON --
          Multi-Sponsored by -- M. of A. D'URSO -- read once and referred to the
          Committee on Housing
        AN ACT to amend the administrative code of the city  of  New  York,  the
          emergency tenant protection act of nineteen seventy-four and the emer-
          gency housing rent control law, in relation to the adjustment of maxi-
          mum allowable rent and requiring the division of housing and community
          renewal  to  confirm improvements have been made prior to the approval
          of rent increases
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Subparagraphs (e) and (g) of paragraph 1 of subdivision g
     2  of section 26-405 of the administrative code of the city  of  New  York,
     3  subparagraph (e) as amended by section 15 of part B of chapter 97 of the
     4  laws  of 2011 and subparagraph (g) as amended by section 31 of part A of
     5  chapter 20 of the laws of 2015, are amended and a  new  paragraph  8  is
     6  added to read as follows:
     7    (e)  The  landlord  and  tenant  by mutual voluntary written agreement
     8  agree to a substantial increase or  decrease  in  dwelling  space  or  a
     9  change  in the services, furniture, furnishings or equipment provided in
    10  the housing accommodations. An adjustment under this subparagraph  shall
    11  be  equal to one-fortieth, in the case of a building with thirty-five or
    12  fewer housing accommodations, or one-sixtieth, in the case of a building
    13  with more than thirty-five housing accommodations where such  adjustment
    14  takes  effect  on or after September twenty-fourth, two thousand eleven,
    15  of the total cost incurred by the landlord in providing  such  modifica-
    16  tion  or increase in dwelling space, services, furniture, furnishings or
    17  equipment, including the cost of  installation,  but  excluding  finance
    18  charges,  provided  further  that  an  owner  who  is entitled to a rent
    19  increase pursuant to this  subparagraph  shall  not  be  entitled  to  a
    20  further  rent increase based upon the installation of similar equipment,
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04447-01-9
        A. 1959                             2
     1  or new furniture or furnishings within  the  useful  life  of  such  new
     2  equipment,  or new furniture or furnishings. An owner entitled to a rent
     3  increase pursuant to this subparagraph shall only be  entitled  to  such
     4  increase for a period of five years from the date of the adjustment. The
     5  owner  shall  give  written  notice  to the city rent agency of any such
     6  adjustment pursuant to this subparagraph; or
     7    (g) There has been since July first, nineteen hundred seventy, a major
     8  capital improvement required for the operation, preservation or  mainte-
     9  nance  of  the structure. An adjustment under this subparagraph [(g) for
    10  any order of the commissioner issued after the  effective  date  of  the
    11  rent  act  of 2015 shall be in an amount sufficient to amortize the cost
    12  of the improvements pursuant to this subparagraph (g) over an eight-year
    13  period for buildings with thirty-five or fewer  units  or  a  nine  year
    14  period  for  buildings with more than thiry-five units] shall only be in
    15  effect for a period of five years from the date of such adjustment, or
    16    (8) Before ordering any adjustment in rent pursuant  to  subparagraphs
    17  (e)  and (g) of paragraph one of this subdivision, the division of hous-
    18  ing and community renewal shall require the owner  of  the  property  to
    19  file  a statement with the division containing information outlining the
    20  scope of the work and the date of completion of such work. Upon  receipt
    21  of  such  statement, the division of housing and community renewal shall
    22  inspect the property to ensure the specified work has been completed. No
    23  increase shall be collectible under subparagraphs (e) and (g)  of  para-
    24  graph one of this subdivision where the division of housing and communi-
    25  ty renewal has determined the specified work has not been completed.
    26    §  2.  Paragraphs  6  and 13 of subdivision c of section 26-511 of the
    27  administrative code of the city of New York, paragraph 6 as  amended  by
    28  section  29 of part A of chapter 20 of the laws of 2015 and paragraph 13
    29  as amended by section 16 of part B of chapter 97 of the  laws  of  2011,
    30  are  amended  and  two  new  paragraphs  6-b and 15 are added to read as
    31  follows:
    32    (6) provides criteria whereby the commissioner may act  upon  applica-
    33  tions  by  owners  for  increases  in  excess  of the level of fair rent
    34  increase established under this law provided, however, that such  crite-
    35  ria  shall provide [(a)] as to hardship applications, for a finding that
    36  the level of fair rent increase is not sufficient to enable the owner to
    37  maintain approximately the same average annual net income  (which  shall
    38  be  computed  without regard to debt service, financing costs or manage-
    39  ment fees) for the three year period ending on or within six  months  of
    40  the  date  of  an application pursuant to such criteria as compared with
    41  annual net income, which prevailed on the average over the period  nine-
    42  teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
    43  first three years of operation if the building was completed since nine-
    44  teen hundred sixty-eight or for the first three  fiscal  years  after  a
    45  transfer of title to a new owner provided the new owner can establish to
    46  the  satisfaction  of  the commissioner that he or she acquired title to
    47  the building as a result of a bona fide sale of the entire building  and
    48  that  the new owner is unable to obtain requisite records for the fiscal
    49  years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
    50  despite  diligent  efforts to obtain same from predecessors in title and
    51  further provided that the new owner can provide financial data  covering
    52  a  minimum  of  six  years under his or her continuous and uninterrupted
    53  operation of the building to meet the three year to three  year  compar-
    54  ative  test  periods herein provided[; and (b) as to completed building-
    55  wide major capital improvements, for a finding  that  such  improvements
    56  are deemed depreciable under the Internal Revenue Code and that the cost
        A. 1959                             3

     1  is  to  be amortized over an eight-year period for a building with thir-
     2  ty-five or fewer housing accommodations, or a  nine-year  period  for  a
     3  building  with  more  than  thirty-five  housing accommodations, for any
     4  determination  issued  by  the division of housing and community renewal
     5  after the effective date of the  rent  act  of  2015,  based  upon  cash
     6  purchase price exclusive of interest or service charges].  Notwithstand-
     7  ing  anything  to  the  contrary  contained herein, no hardship increase
     8  granted pursuant to this paragraph shall, when added to the annual gross
     9  rents, as determined by the commissioner, exceed the  sum  of,  (i)  the
    10  annual  operating expenses, (ii) an allowance for management services as
    11  determined by  the  commissioner,  (iii)  actual  annual  mortgage  debt
    12  service  (interest  and  amortization)  on its indebtedness to a lending
    13  institution, an insurance company, a retirement  fund  or  welfare  fund
    14  which is operated under the supervision of the banking or insurance laws
    15  of  the  state of New York or the United States, and (iv) eight and one-
    16  half percent of that portion of the fair market value  of  the  property
    17  which  exceeds  the unpaid principal amount of the mortgage indebtedness
    18  referred to in subparagraph (iii) of this paragraph. Fair  market  value
    19  for  the  purposes of this paragraph shall be six times the annual gross
    20  rent. The collection of any increase in  the  stabilized  rent  for  any
    21  apartment pursuant to this paragraph shall not exceed six percent in any
    22  year from the effective date of the order granting the increase over the
    23  rent  set  forth  in the schedule of gross rents, with collectability of
    24  any dollar excess above said sum to be spread forward in similar  incre-
    25  ments  and  added to the stabilized rent as established or set in future
    26  years;
    27    (6-b) provides criteria whereby the commissioner may act upon applica-
    28  tion by owners for increases  in  excess  of  the  level  of  fair  rent
    29  increase  established  under  this  law  provided,  however,  that as to
    30  completed building-wide major capital improvements, an owner shall  only
    31  be  entitled  to a rent increase for a five year period from the date of
    32  the approved increase.
    33    (13) provides that an owner is entitled to a rent increase where there
    34  has been a substantial modification or increase of dwelling space or  an
    35  increase  in  the services, or installation of new equipment or improve-
    36  ments or new furniture or furnishings provided in or to a tenant's hous-
    37  ing accommodation, on written tenant consent to the  rent  increase.  In
    38  the  case of a vacant housing accommodation, tenant consent shall not be
    39  required. The [permanent] increase in the legal regulated rent  for  the
    40  affected  housing  accommodation shall be one-fortieth, in the case of a
    41  building with thirty-five or fewer housing accommodations, or one-sixti-
    42  eth, in the case of a building with more than thirty-five housing accom-
    43  modations where such [permanent]  increase  takes  effect  on  or  after
    44  September twenty-fourth, two thousand eleven, of the total cost incurred
    45  by  the  landlord in providing such modification or increase in dwelling
    46  space, services, furniture, furnishings or equipment, including the cost
    47  of installation, but excluding finance charges; provided,  however,  the
    48  increase  allowable  under  this paragraph shall only be in effect for a
    49  period of five years from the date of such  increase.  Provided  further
    50  that  an owner who is entitled to a rent increase pursuant to this para-
    51  graph shall not be entitled to a further rent increase  based  upon  the
    52  installation of similar equipment, or new furniture or furnishings with-
    53  in  the  useful  life  of  such  new  equipment,  or  new  furniture  or
    54  furnishings.
    55    (15) provides that before ordering any adjustment in rent pursuant  to
    56  paragraphs six-b and thirteen of this subdivision, the division of hous-
        A. 1959                             4
     1  ing  and  community  renewal  shall require the owner of the property to
     2  file a statement with the division containing information outlining  the
     3  scope  of the work and the date of completion of such work. Upon receipt
     4  of  such  statement, the division of housing and community renewal shall
     5  inspect the property to ensure the specified work has been completed. No
     6  increase shall be collectible under paragraphs  six-b  and  thirteen  of
     7  this subdivision where the division of housing and community renewal has
     8  determined the specified work has not been completed.
     9    §  3. Paragraphs 1 and 3 of subdivision d of section 6 of section 4 of
    10  chapter 576 of the laws  of  1974,  constituting  the  emergency  tenant
    11  protection  act  of  nineteen  seventy-four,  paragraph  1 as amended by
    12  section 18 of part B of chapter 97 of the laws of 2011 and  paragraph  3
    13  as  amended  by  section 30 of part A of chapter 20 of the laws of 2015,
    14  are amended and a new paragraph 6 is added to read as follows:
    15    (1) there has been a substantial modification or increase of  dwelling
    16  space  or  an increase in the services, or installation of new equipment
    17  or improvements or new furniture or furnishings, provided  in  or  to  a
    18  tenant's  housing  accommodation,  on written tenant consent to the rent
    19  increase. In the case of a vacant housing accommodation, tenant  consent
    20  shall  not  be required. The [permanent] increase in the legal regulated
    21  rent for the affected housing accommodation shall  be  one-fortieth,  in
    22  the case of a building with thirty-five or fewer housing accommodations,
    23  or  one-sixtieth,  in  the case of a building with more than thirty-five
    24  housing accommodations where such [permanent] increase takes  effect  on
    25  or after September twenty-fourth, two thousand eleven, of the total cost
    26  incurred  by  the landlord in providing such modification or increase in
    27  dwelling space, services, furniture, furnishings or equipment, including
    28  the cost of  installation,  but  excluding  finance  charges;  provided,
    29  however,  the  increase  allowable under this paragraph shall only be in
    30  effect for a period of five  years  from  the  date  of  such  increase.
    31  Provided further that an owner who is entitled to a rent increase pursu-
    32  ant  to  this paragraph shall not be entitled to a further rent increase
    33  based upon the installation of similar equipment, or  new  furniture  or
    34  furnishings  within the useful life of such new equipment, or new furni-
    35  ture or furnishings.
    36    (3) there has been since January first, nineteen hundred  seventy-four
    37  a  major capital improvement required for the operation, preservation or
    38  maintenance of the structure. An adjustment under this  paragraph  shall
    39  [be  in  an  amount  sufficient to amortize the cost of the improvements
    40  pursuant to this paragraph over an eight-year period for a building with
    41  thirty-five or fewer housing accommodations, or a nine-year period for a
    42  building with more than  thirty-five  housing  accommodations,  for  any
    43  determination  issued  by  the division of housing and community renewal
    44  after the effective date of the rent act of 2015] only be in effect  for
    45  a period of five years from the date of such adjustment, or
    46    (6)  Before ordering any adjustment in rent pursuant to paragraphs one
    47  and three of this subdivision, the division  of  housing  and  community
    48  renewal shall require the owner of the property to file a statement with
    49  the  division containing information outlining the scope of the work and
    50  the date of completion of such work. Upon receipt of such statement, the
    51  division of housing and community renewal shall inspect the property  to
    52  ensure  the  specified  work  has  been  completed. No increase shall be
    53  collectible under paragraphs one and three of this subdivision where the
    54  division of housing and community renewal has determined  the  specified
    55  work has not been completed.
        A. 1959                             5
     1    § 4. Clauses 5 and 7 of the second undesignated paragraph of paragraph
     2  (a)  of  subdivision  4 of section 4 of chapter 274 of the laws of 1946,
     3  constituting the emergency housing rent control law, clause 5 as amended
     4  by section 25 of part B of chapter 97 of the laws of 2011 and  clause  7
     5  as  amended  by  section 32 of part A of chapter 20 of the laws of 2015,
     6  are amended to read as follows:
     7    (5) the landlord and tenant  by  mutual  voluntary  written  agreement
     8  agree  to  a  substantial  increase  or  decrease in dwelling space or a
     9  change in the services, furniture, furnishings or equipment provided  in
    10  the  housing accommodations; provided that an owner shall be entitled to
    11  a rent increase where there  has  been  a  substantial  modification  or
    12  increase  of dwelling space or an increase in the services, or installa-
    13  tion of new equipment or improvements or new  furniture  or  furnishings
    14  provided  in  or  to  a  tenant's housing accommodation. The [permanent]
    15  increase in the maximum rent  for  the  affected  housing  accommodation
    16  shall  be  one-fortieth,  in  the case of a building with thirty-five or
    17  fewer housing accommodations, or one-sixtieth, in the case of a building
    18  with more than thirty-five housing accommodations where such [permanent]
    19  increase takes effect on or after September twenty-fourth, two  thousand
    20  eleven,  of  the  total  cost incurred by the landlord in providing such
    21  modification  or  increase  in  dwelling  space,  services,   furniture,
    22  furnishings  or  equipment,  including  the  cost  of  installation, but
    23  excluding finance charges provided further that an owner who is entitled
    24  to a rent increase pursuant to this clause shall not be  entitled  to  a
    25  further  rent increase based upon the installation of similar equipment,
    26  or new furniture or furnishings within  the  useful  life  of  such  new
    27  equipment,  or  new  furniture  or  furnishings;  provided, however, the
    28  increase allowable under this clause shall only be in effect for a peri-
    29  od of five years from the date of such increase. The  owner  shall  give
    30  written notice to the commission of any such adjustment pursuant to this
    31  clause;  provided,  however,  before  any  adjustment in rent shall take
    32  effect pursuant to this clause, the division of  housing  and  community
    33  renewal shall require the owner of the property to file a statement with
    34  the  division containing information outlining the scope of the work and
    35  the date of completion of such work. Upon receipt of such statement, the
    36  division of housing and community renewal shall inspect the property  to
    37  ensure  the  specified  work  has been completed.   No increase shall be
    38  collectible under this clause where the division of housing and communi-
    39  ty renewal has determined the specified work has not been completed;  or
    40  (7)  there  has  been since March first, nineteen hundred fifty, a major
    41  capital improvement required for the operation, preservation or  mainte-
    42  nance  of the structure; which [for any order of the commissioner issued
    43  after the effective date of the rent  act  of  2015  the  cost  of  such
    44  improvement  shall  be amortized over an eight-year period for buildings
    45  with thirty-five or fewer units or a nine year period for buildings with
    46  more than thiry-five units,] shall only be in effect  for  a  period  of
    47  five years from the date of such adjustment. Before ordering any adjust-
    48  ment in rent pursuant to this clause, the division of housing and commu-
    49  nity renewal shall require the owner of the property to file a statement
    50  with the division containing information outlining the scope of the work
    51  and the date of completion of such work. Upon receipt of such statement,
    52  the division of housing and community renewal shall inspect the property
    53  to  ensure  the specified work has been completed.  No increase shall be
    54  collectible under this clause where the division of housing and communi-
    55  ty renewal has determined the specified work has not been completed; or
    56    § 5. This act shall take effect immediately; provided that:
        A. 1959                             6
     1    (a) the amendments to section 26-405 of the city  rent  and  rehabili-
     2  tation  law  made  by section one of this act shall remain in full force
     3  and effect only as long as the public emergency requiring the regulation
     4  and control of residential rents and evictions continues, as provided in
     5  subdivision  3  of section 1 of the local emergency housing rent control
     6  act;
     7    (b) the amendments to section 26-511 of chapter 4 of title 26  of  the
     8  administrative  code of the city of New York made by section two of this
     9  act shall expire on the same date as such  law  expires  and  shall  not
    10  affect  the  expiration  of such law as provided under section 26-520 of
    11  such law;
    12    (c) the amendments to section 6 of the emergency tenant protection act
    13  of nineteen seventy-four made by section three of this act shall  expire
    14  on the same date as such act expires and shall not affect the expiration
    15  of  such  act  as  provided  in section 17 of chapter 576 of the laws of
    16  1974;
    17    (d) the amendments to section 4 of the emergency housing rent  control
    18  law  made  by  section four of this act shall expire on the same date as
    19  such law expires and shall not affect the  expiration  of  such  law  as
    20  provided  in  subdivision  2  of section 1 of chapter 274 of the laws of
    21  1946.