Bill Text: NY A05566 | 2015-2016 | General Assembly | Introduced


Bill Title: Relates to alternative hardship applications for properties subject to the rent stabilization code.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced - Dead) 2016-05-19 - advanced to third reading cal.663 [A05566 Detail]

Download: New_York-2015-A05566-Introduced.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5566
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                   February 27, 2015
                                      ___________
       Introduced  by  M.  of A. KAVANAGH, DINOWITZ, ROSENTHAL, PERRY -- Multi-
         Sponsored by -- M. of A.  FARRELL, GOTTFRIED -- read once and referred
         to the Committee on Housing
       AN ACT to amend the administrative code of the city of New York and  the
         emergency  tenant protection act of nineteen seventy-four, in relation
         to hardship applications
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Paragraph  6-a  of subdivision c of section 26-511 of the
    2  administrative code of the city of  New  York  is  amended  to  read  as
    3  follows:
    4    (6-a)  provides  criteria  whereby  as  an alternative to the hardship
    5  application provided under paragraph six of this subdivision  owners  of
    6  buildings  acquired  by  the same owner or a related entity owned by the
    7  same principals [three] SIX years prior to the date of  application  may
    8  apply to the division for increases in excess of the level of applicable
    9  guideline increases established under this law based on a finding by the
   10  commissioner  that such guideline increases are not sufficient to enable
   11  the owner to maintain an annual gross  rent  income  for  such  building
   12  which  exceeds  the  annual operating expenses of such building by a sum
   13  equal to at least five percent of such gross rent. For the  purposes  of
   14  this  paragraph, operating expenses shall consist of the actual, reason-
   15  able, costs of fuel, labor,  utilities,  taxes,  other  than  income  or
   16  corporate  franchise taxes, fees, permits, necessary contracted services
   17  and non-capital repairs, insurance, parts and supplies, management  fees
   18  and  other  administrative costs and mortgage interest. For the purposes
   19  of this paragraph, mortgage interest shall be deemed to mean interest on
   20  a bona fide mortgage including an allocable portion of  charges  related
   21  thereto.  Criteria  to be considered in determining a bona fide mortgage
   22  other than an institutional mortgage shall  include;  condition  of  the
   23  property,  location of the property, the existing mortgage market at the
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD01889-01-5
       A. 5566                             2
    1  time the mortgage is placed, the term of the mortgage, the  amortization
    2  rate, the principal amount of the mortgage, security and other terms and
    3  conditions  of  the  mortgage. The commissioner shall set a rental value
    4  for  any  unit occupied by the owner or a person related to the owner or
    5  unoccupied at the owner's choice for more than one  month  at  the  last
    6  regulated rent plus the minimum number of guidelines increases or, if no
    7  such regulated rent existed or is known, the commissioner shall impute a
    8  rent consistent with other rents in the building. The amount of hardship
    9  increase  shall  be such as may be required to maintain the annual gross
   10  rent income as provided by this paragraph. The division shall not  grant
   11  a  hardship  application  under  this paragraph or paragraph six of this
   12  subdivision for a period of three years subsequent to granting  a  hard-
   13  ship  application under the provisions of this paragraph. The collection
   14  of any increase in the rent for any housing  accommodation  pursuant  to
   15  this  paragraph shall not exceed six percent in any year from the effec-
   16  tive date of the order granting the increase over the rent set forth  in
   17  the  schedule  of  gross rents, with collectability of any dollar excess
   18  above said sum to be spread forward in similar increments and  added  to
   19  the  rent as established or set in future years. No application shall be
   20  approved unless the owner's equity in such building exceeds five percent
   21  of: (i) the arms length purchase price of the property; (ii) the cost of
   22  any capital improvements  for  which  the  owner  has  not  collected  a
   23  surcharge; (iii) any repayment of principal of any mortgage or loan used
   24  to  finance the purchase of the property or any capital improvements for
   25  which the owner has not collected a surcharge and (iv) any  increase  in
   26  the  equalized  assessed value of the property which occurred subsequent
   27  to the first valuation of the property after purchase by the owner.  For
   28  the purposes of this paragraph, owner's equity shall mean the sum of (i)
   29  the purchase price of the property less the principal of any mortgage or
   30  loan  used to finance the purchase of the property, (ii) the cost of any
   31  capital improvement for which the owner has not  collected  a  surcharge
   32  less the principal of any mortgage or loan used to finance said improve-
   33  ment,  (iii) any repayment of the principal of any mortgage or loan used
   34  to finance the purchase of the property or any capital  improvement  for
   35  which  the owner has not collected a surcharge, and (iv) any increase in
   36  the equalized assessed value of the property which  occurred  subsequent
   37  to the first valuation of the property after purchase by the owner.
   38    S 2. Paragraph 5 of subdivision d of section 6 of section 4 of chapter
   39  576  of the laws of 1974 enacting the emergency tenant protection act of
   40  nineteen seventy-four, as amended by chapter 102 of the laws of 1984, is
   41  amended to read as follows:
   42    (5) as an alternative to the hardship application provided under para-
   43  graph four of this subdivision, owners of buildings acquired by the same
   44  owner or a related entity owned by the same principals [three] SIX years
   45  prior to the date of application may apply to the division for increases
   46  in excess of the level of  applicable  guideline  increases  established
   47  under  this  law based on a finding by the commissioner that such guide-
   48  line increases are not sufficient to enable the  owner  to  maintain  an
   49  annual  gross  rent  income  for  such building which exceeds the annual
   50  operating expenses of such building by a sum  equal  to  at  least  five
   51  percent  of such gross rent. For the purposes of this paragraph, operat-
   52  ing expenses shall consist of the actual,  reasonable,  costs  of  fuel,
   53  labor, utilities, taxes, other than income or corporate franchise taxes,
   54  fees,  permits,  necessary  contracted services and non-capital repairs,
   55  insurance, parts and supplies, management fees and other  administrative
   56  costs  and  mortgage interest. For the purposes of this paragraph, mort-
       A. 5566                             3
    1  gage interest shall be deemed to mean interest on a bona  fide  mortgage
    2  including  an allocable portion of charges related thereto.  Criteria to
    3  be considered in determining a bona fide mortgage other than an institu-
    4  tional  mortgage  shall  include; condition of the property, location of
    5  the property, the existing mortgage market at the time the  mortgage  is
    6  placed,  the  term of the mortgage, the amortization rate, the principal
    7  amount of the mortgage, security and other terms and conditions  of  the
    8  mortgage.  The  commissioner shall set a rental value for any unit occu-
    9  pied by the owner or a person related to the owner or unoccupied at  the
   10  owner's  choice  for more than one month at the last regulated rent plus
   11  the minimum number of guidelines increases or, if no such regulated rent
   12  existed or is known, the commissioner shall  impute  a  rent  consistent
   13  with  other rents in the building. The amount of hardship increase shall
   14  be such as may be required to maintain the annual gross rent  income  as
   15  provided  by  this  paragraph.  The  division shall not grant a hardship
   16  application under this paragraph or paragraph four of  this  subdivision
   17  for  a  period of three years subsequent to granting a hardship applica-
   18  tion under the provisions of  this  paragraph.  The  collection  of  any
   19  increase  in  the  rent  for  any housing accommodation pursuant to this
   20  paragraph shall not exceed six percent in any year  from  the  effective
   21  date  of  the order granting the increase over the rent set forth in the
   22  schedule of gross rents, with collectability of any dollar excess  above
   23  said  sum  to  be  spread forward in similar increments and added to the
   24  rent as established or set in future  years.  No  application  shall  be
   25  approved unless the owner's equity in such building exceeds five percent
   26  of: (i) the arms length purchase price of the property; (ii) the cost of
   27  any  capital  improvements  for  which  the  owner  has  not collected a
   28  surcharge; (iii) any repayment of principal of any mortgage or loan used
   29  to finance the purchase of the property or any capital improvements  for
   30  which  the owner has not collected a surcharge; and (iv) any increase in
   31  the equalized assessed value of the property which  occurred  subsequent
   32  to  the first valuation of the property after purchase by the owner. For
   33  the purposes of this paragraph, owner's equity shall mean the sum of (i)
   34  the purchase price of the property less the principal of any mortgage or
   35  loan used to finance the purchase of the property, (ii) the cost of  any
   36  capital  improvement  for  which the owner has not collected a surcharge
   37  less the principal of any mortgage or loan used to finance said improve-
   38  ment, (iii) any repayment of the principal of any mortgage or loan  used
   39  to  finance  the purchase of the property or any capital improvement for
   40  which the owner has not collected a surcharge, and (iv) any increase  in
   41  the  equalized  assessed value of the property which occurred subsequent
   42  to the first valuation of the property after purchase by the owner.
   43    S 3. This act shall take effect immediately; provided that the  amend-
   44  ments  to  section 26-511 of chapter 4 of title 26 of the administrative
   45  code of the city of New York made by  section  one  of  this  act  shall
   46  expire  on  the  same  date as such law expires and shall not affect the
   47  expiration of such law as provided under section 26-520 of such law; and
   48  provided that the amendments  to  section  6  of  the  emergency  tenant
   49  protection  act of nineteen seventy-four made by section two of this act
   50  shall expire on the same date as such act expires and shall  not  affect
   51  the  expiration  of such act as provided in section 17 of chapter 576 of
   52  the laws of 1974.
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