Bill Text: NY A07368 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to capping the amount of collectible rent increases due to major capital improvements; provides that any rent increase authorized to be collected in any one year as the result of a major capital improvement or a rent adjustment authorized by a rent guidelines board shall not exceed three percent of a tenant's legal regulated rent.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - referred to housing [A07368 Detail]
Download: New_York-2019-A07368-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7368 2019-2020 Regular Sessions IN ASSEMBLY April 26, 2019 ___________ Introduced by M. of A. EPSTEIN -- read once and referred to the Commit- tee 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 capping the amount of collectible rent increases due to major capital improvements and any rent adjustment authorized by a rent guidelines board The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section 2 26-405 of the administrative code of the city of New York, as amended by 3 section 31 of part A of chapter 20 of the laws of 2015, is amended to 4 read as follows: 5 (g) There has been since July first, nineteen hundred seventy, a major 6 capital improvement required for the operation, preservation or mainte- 7 nance of the structure. An adjustment under this subparagraph (g) for 8 any order of the commissioner issued after the effective date of the 9 rent act of 2015 shall be in an amount sufficient to amortize the cost 10 of the improvements pursuant to this subparagraph (g) over an eight-year 11 period for buildings with thirty-five or fewer units or a nine year 12 period for buildings with more than [thiry-five] thirty-five units, 13 provided, however, that any adjustment authorized pursuant to this 14 subparagraph and any rent adjustment authorized by a rent guidelines 15 board to be collected in any one year shall not exceed three percent of 16 a tenant's legal regulated rent, or 17 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 18 tive code of the city of New York, as amended by section 29 of part A of 19 chapter 20 of the laws of 2015, is amended to read as follows: 20 (6) provides criteria whereby the commissioner may act upon applica- 21 tions by owners for increases in excess of the level of fair rent 22 increase established under this law provided, however, that such crite- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11100-01-9A. 7368 2 1 ria shall provide (a) as to hardship applications, for a finding that 2 the level of fair rent increase is not sufficient to enable the owner to 3 maintain approximately the same average annual net income (which shall 4 be computed without regard to debt service, financing costs or manage- 5 ment fees) for the three year period ending on or within six months of 6 the date of an application pursuant to such criteria as compared with 7 annual net income, which prevailed on the average over the period nine- 8 teen hundred sixty-eight through nineteen hundred seventy, or for the 9 first three years of operation if the building was completed since nine- 10 teen hundred sixty-eight or for the first three fiscal years after a 11 transfer of title to a new owner provided the new owner can establish to 12 the satisfaction of the commissioner that he or she acquired title to 13 the building as a result of a bona fide sale of the entire building and 14 that the new owner is unable to obtain requisite records for the fiscal 15 years nineteen hundred sixty-eight through nineteen hundred seventy 16 despite diligent efforts to obtain same from predecessors in title and 17 further provided that the new owner can provide financial data covering 18 a minimum of six years under his or her continuous and uninterrupted 19 operation of the building to meet the three year to three year compar- 20 ative test periods herein provided; and (b) as to completed building- 21 wide major capital improvements, for a finding that such improvements 22 are deemed depreciable under the Internal Revenue Code and that the cost 23 is to be amortized over an eight-year period for a building with thir- 24 ty-five or fewer housing accommodations, or a nine-year period for a 25 building with more than thirty-five housing accommodations, for any 26 determination issued by the division of housing and community renewal 27 after the effective date of the rent act of 2015, based upon cash 28 purchase price exclusive of interest or service charges. Any major 29 capital improvement rent increase authorized to be collected and any 30 rent adjustment authorized by a rent guidelines board in any one year 31 shall not exceed three percent of a tenant's legal regulated rent. 32 Notwithstanding anything to the contrary contained herein, no hardship 33 increase granted pursuant to this paragraph shall, when added to the 34 annual gross rents, as determined by the commissioner, exceed the sum 35 of, (i) the annual operating expenses, (ii) an allowance for management 36 services as determined by the commissioner, (iii) actual annual mortgage 37 debt service (interest and amortization) on its indebtedness to a lend- 38 ing institution, an insurance company, a retirement fund or welfare fund 39 which is operated under the supervision of the banking or insurance laws 40 of the state of New York or the United States, and (iv) eight and one- 41 half percent of that portion of the fair market value of the property 42 which exceeds the unpaid principal amount of the mortgage indebtedness 43 referred to in subparagraph (iii) of this paragraph. Fair market value 44 for the purposes of this paragraph shall be six times the annual gross 45 rent. The collection of any increase in the stabilized rent for any 46 apartment pursuant to this paragraph shall not exceed six percent in any 47 year from the effective date of the order granting the increase over the 48 rent set forth in the schedule of gross rents, with collectability of 49 any dollar excess above said sum to be spread forward in similar incre- 50 ments and added to the stabilized rent as established or set in future 51 years; 52 § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter 53 576 of the laws of 1974, constituting the emergency tenant protection 54 act of nineteen seventy-four, as amended by section 30 of part A of 55 chapter 20 of the laws of 2015, is amended to read as follows:A. 7368 3 1 (3) there has been since January first, nineteen hundred seventy-four 2 a major capital improvement required for the operation, preservation or 3 maintenance of the structure. An adjustment under this paragraph shall 4 be in an amount sufficient to amortize the cost of the improvements 5 pursuant to this paragraph over an eight-year period for a building with 6 thirty-five or fewer housing accommodations, or a nine-year period for a 7 building with more than thirty-five housing accommodations, for any 8 determination issued by the division of housing and community renewal 9 after the effective date of the rent act of 2015, provided, however, 10 that any adjustment authorized pursuant to this paragraph and any rent 11 adjustment authorized by a rent guidelines board to be collected in any 12 one year shall not exceed three percent of a tenant's legal regulated 13 rent, or 14 § 4. Subparagraph 7 of the second undesignated paragraph of paragraph 15 (a) of subdivision 4 of section 4 of chapter 274 of the laws of 1946, 16 constituting the emergency housing rent control law, as amended by 17 section 32 of part A of chapter 20 of the laws of 2015, is amended to 18 read as follows: 19 (7) there has been since March first, nineteen hundred fifty, a major 20 capital improvement required for the operation, preservation or mainte- 21 nance of the structure; which for any order of the commissioner issued 22 after the effective date of the rent act of 2015 the cost of such 23 improvement shall be amortized over an eight-year period for buildings 24 with thirty-five or fewer units or a [nine year] nine-year period for 25 buildings with more than [thiry-five] thirty-five units, provided, 26 however, any major capital improvement rent increase authorized to be 27 collected and any rent adjustment authorized by a rent guidelines board 28 in any one year shall not exceed three percent of a tenant's legal regu- 29 lated rent, or 30 § 5. This act shall take effect immediately; provided that: 31 (a) the amendments to section 26-405 of the city rent and rehabili- 32 tation law made by section one of this act shall remain in full force 33 and effect only as long as the public emergency requiring the regulation 34 and control of residential rents and evictions continues, as provided in 35 subdivision 3 of section 1 of the local emergency housing rent control 36 act; 37 (b) the amendments to section 26-511 of the rent stabilization law of 38 nineteen hundred sixty-nine made by section two of this act shall expire 39 on the same date as such law expires and shall not affect the expiration 40 of such law as provided under section 26-520 of such law, as from time 41 to time amended; 42 (c) the amendments to section 6 of the emergency tenant protection act 43 of nineteen seventy-four made by section three of this act shall expire 44 on the same date as such act expires and shall not affect the expiration 45 of such act as provided in section 17 of chapter 576 of the laws of 46 1974, as from time to time amended; and 47 (d) the amendments to section 4 of the emergency housing rent control 48 law made by section four of this act shall expire on the same date as 49 such law expires and shall not affect the expiration of such law as 50 provided in subdivision 2 of section 1 of chapter 274 of the laws of 51 1946.