Bill Text: NY S04539 | 2019-2020 | General Assembly | Introduced
Bill Title: Requires the state division of housing and community renewal to verify there are no class B or C housing code violations or no more than 30 class A housing code violations on the property prior to authorizing a rent increase for major capital improvements for such property; provides that outstanding violations shall be corrected by the landlord and verified by the city rent agency prior to authorization of a rent increase.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S04539 Detail]
Download: New_York-2019-S04539-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 4539 2019-2020 Regular Sessions IN SENATE March 14, 2019 ___________ Introduced by Sens. PARKER, SEPULVEDA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development 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 requiring the state division of housing and community renewal to verify there are no hous- ing code violations prior to authorizing a rent increase 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. Paragraph 1 of subdivision g of section 26-405 of the 2 administrative code of the city of New York is amended by adding a new 3 subparagraph (p) to read as follows: 4 (p) Adjustments made pursuant to subparagraph (g) of this paragraph 5 shall be collectible upon the landlord's filing of a report with the 6 city rent agency, subject to the provisions of subparagraph (e) of para- 7 graph two of subdivision a of this section and verification by the city 8 rent agency, in collaboration with local authorities responsible for 9 inspecting buildings, that the applicant does not have more than thirty 10 class A housing code violations or a class B or C housing code violation 11 on the property. Outstanding housing code violations that are found 12 shall be cleared, corrected or abated by the landlord and verified by 13 the city rent agency prior to authorization of a rent increase under 14 subparagraph (g) of this paragraph. 15 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 16 tive code of the city of New York, as amended by section 29 of part A of 17 chapter 20 of the laws of 2015, is amended to read as follows: 18 (6) provides criteria whereby the commissioner may act upon applica- 19 tions by owners for increases in excess of the level of fair rent 20 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. LBD10617-01-9S. 4539 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. The division 29 of housing and community renewal shall require the submission of a 30 report by landlords applying for a rent increase for major capital 31 improvements pursuant to this paragraph and subject to verification by 32 the division of housing and community renewal, in collaboration with 33 local authorities responsible for inspecting buildings, certifying that 34 there are not more than thirty class A housing code violations nor a 35 class B or C housing code violation on the property, prior to receiving 36 approval for such rent increase. Notwithstanding anything to the contra- 37 ry contained herein, no hardship increase granted pursuant to this para- 38 graph shall, when added to the annual gross rents, as determined by the 39 commissioner, exceed the sum of, (i) the annual operating expenses, (ii) 40 an allowance for management services as determined by the commissioner, 41 (iii) actual annual mortgage debt service (interest and amortization) on 42 its indebtedness to a lending institution, an insurance company, a 43 retirement fund or welfare fund which is operated under the supervision 44 of the banking or insurance laws of the state of New York or the United 45 States, and (iv) eight and one-half percent of that portion of the fair 46 market value of the property which exceeds the unpaid principal amount 47 of the mortgage indebtedness referred to in subparagraph (iii) of this 48 paragraph. Fair market value for the purposes of this paragraph shall be 49 six times the annual gross rent. The collection of any increase in the 50 stabilized rent for any apartment pursuant to this paragraph shall not 51 exceed six percent in any year from the effective date of the order 52 granting the increase over the rent set forth in the schedule of gross 53 rents, with collectability of any dollar excess above said sum to be 54 spread forward in similar increments and added to the stabilized rent as 55 established or set in future years;S. 4539 3 1 § 3. Subdivision d of section 6 of section 4 of chapter 576 of the 2 laws of 1974, constituting the emergency tenant protection act of nine- 3 teen seventy-four, is amended by adding a new paragraph 6 to read as 4 follows: 5 (6) adjustments made pursuant to paragraph (3) of this subdivision 6 shall be collectable upon the landlord's filing of a report with the 7 state division of housing and community renewal and subject to verifica- 8 tion by the state division of housing and community renewal, in collab- 9 oration with local authorities responsible for inspecting buildings, 10 that the applicant does not have more than thirty class A housing code 11 violations or a class B or C housing code violation on the property. 12 Outstanding housing code violations that are found shall be cleared, 13 corrected or abated by the landlord and verified by the state division 14 of housing and community renewal prior to authorization of a rent 15 increase under paragraph (3) of this subdivision. 16 § 4. The second undesignated paragraph of paragraph (a) of subdivision 17 4 of section 4 of chapter 274 of the laws of 1946, constituting the 18 emergency housing rent control law, as amended by section 25 of part B 19 of chapter 97 of the laws of 2011, subparagraph 7 as amended by section 20 32 of part A of chapter 20 of the laws of 2015, is amended to read as 21 follows: 22 No application for adjustment of maximum rent based upon a sales price 23 valuation shall be filed by the landlord under this subparagraph prior 24 to six months from the date of such sale of the property. In addition, 25 no adjustment ordered by the commission based upon such sales price 26 valuation shall be effective prior to one year from the date of such 27 sale. Where, however, the assessed valuation of the land exceeds four 28 times the assessed valuation of the buildings thereon, the commission 29 may determine a valuation of the property equal to five times the equal- 30 ized assessed valuation of the buildings, for the purposes of this 31 subparagraph. The commission may make a determination that the valuation 32 of the property is an amount different from such equalized assessed 33 valuation where there is a request for a reduction in such assessed 34 valuation currently pending; or where there has been a reduction in the 35 assessed valuation for the year next preceding the effective date of the 36 current assessed valuation in effect at the time of the filing of the 37 application. Net annual return shall be the amount by which the earned 38 income exceeds the operating expenses of the property, excluding mort- 39 gage interest and amortization, and excluding allowances for obsoles- 40 cence and reserves, but including an allowance for depreciation of two 41 per centum of the value of the buildings exclusive of the land, or the 42 amount shown for depreciation of the buildings in the latest required 43 federal income tax return, whichever is lower; provided, however, that 44 (1) no allowance for depreciation of the buildings shall be included 45 where the buildings have been fully depreciated for federal income tax 46 purposes or on the books of the owner; or (2) the landlord who owns no 47 more than four rental units within the state has not been fully compen- 48 sated by increases in rental income sufficient to offset unavoidable 49 increases in property taxes, fuel, utilities, insurance and repairs and 50 maintenance, excluding mortgage interest and amortization, and excluding 51 allowances for depreciation, obsolescence and reserves, which have 52 occurred since the federal date determining the maximum rent or the date 53 the property was acquired by the present owner, whichever is later; or 54 (3) the landlord operates a hotel or rooming house or owns a cooperative 55 apartment and has not been fully compensated by increases in rental 56 income from the controlled housing accommodations sufficient to offsetS. 4539 4 1 unavoidable increases in property taxes and other costs as are allocable 2 to such controlled housing accommodations, including costs of operation 3 of such hotel or rooming house, but excluding mortgage interest and 4 amortization, and excluding allowances for depreciation, obsolescence 5 and reserves, which have occurred since the federal date determining the 6 maximum rent or the date the landlord commenced the operation of the 7 property, whichever is later; or (4) the landlord and tenant voluntarily 8 enter into a valid written lease in good faith with respect to any hous- 9 ing accommodation, which lease provides for an increase in the maximum 10 rent not in excess of fifteen per centum and for a term of not less than 11 two years, except that where such lease provides for an increase in 12 excess of fifteen per centum, the increase shall be automatically 13 reduced to fifteen per centum; or (5) the landlord and tenant by mutual 14 voluntary written agreement agree to a substantial increase or decrease 15 in dwelling space or a change in the services, furniture, furnishings or 16 equipment provided in the housing accommodations; provided that an owner 17 shall be entitled to a rent increase where there has been a substantial 18 modification or increase of dwelling space or an increase in the 19 services, or installation of new equipment or improvements or new furni- 20 ture or furnishings provided in or to a tenant's housing accommodation. 21 The permanent increase in the maximum rent for the affected housing 22 accommodation shall be one-fortieth, in the case of a building with 23 thirty-five or fewer housing accommodations, or one-sixtieth, in the 24 case of a building with more than thirty-five housing accommodations 25 where such permanent increase takes effect on or after September twen- 26 ty-fourth, two thousand eleven, of the total cost incurred by the land- 27 lord in providing such modification or increase in dwelling space, 28 services, furniture, furnishings or equipment, including the cost of 29 installation, but excluding finance charges provided further that an 30 owner who is entitled to a rent increase pursuant to this clause shall 31 not be entitled to a further rent increase based upon the installation 32 of similar equipment, or new furniture or furnishings within the useful 33 life of such new equipment, or new furniture or furnishings. The owner 34 shall give written notice to the commission of any such adjustment 35 pursuant to this clause; or (6) there has been, since March first, nine- 36 teen hundred fifty, an increase in the rental value of the housing 37 accommodations as a result of a substantial rehabilitation of the build- 38 ing or housing accommodation therein which materially adds to the value 39 of the property or appreciably prolongs its life, excluding ordinary 40 repairs, maintenance and replacements; or (7) there has been since March 41 first, nineteen hundred fifty, a major capital improvement required for 42 the operation, preservation or maintenance of the structure; which for 43 any order of the commissioner issued after the effective date of the 44 rent act of 2015 the cost of such improvement shall be amortized over an 45 eight-year period for buildings with thirty-five or fewer units or a 46 nine year period for buildings with more than [thiry-five] thirty-five 47 units, or (8) there has been since March first, nineteen hundred fifty, 48 in structures containing more than four housing accommodations, other 49 improvements made with the express consent of the tenants in occupancy 50 of at least seventy-five per centum of the housing accommodations, 51 provided, however, that no adjustment granted hereunder shall exceed 52 fifteen per centum unless the tenants have agreed to a higher percentage 53 of increase, as herein provided; or (9) there has been, since March 54 first, nineteen hundred fifty, a subletting without written consent from 55 the landlord or an increase in the number of adult occupants who are not 56 members of the immediate family of the tenant, and the landlord has notS. 4539 5 1 been compensated therefor by adjustment of the maximum rent by lease or 2 order of the commission or pursuant to the federal act; or (10) the 3 presence of unique or peculiar circumstances materially affecting the 4 maximum rent has resulted in a maximum rent which is substantially lower 5 than the rents generally prevailing in the same area for substantially 6 similar housing accommodations. Adjustments made pursuant to subpara- 7 graph (7) of this paragraph shall be collectible upon the landlord's 8 filing of a report with the commission and subject to verification by 9 the commission, in collaboration with local authorities responsible for 10 inspecting buildings, that the applicant does not have more than thirty 11 class A housing code violations or a class B or C housing code violation 12 on the property. Outstanding housing code volitions that are found shall 13 be cleared, corrected or abated by the landlord and verified by the 14 commission prior to authorization of a rent increase under subparagraph 15 (7) of this paragraph. 16 § 5. This act shall take effect on the sixtieth day after it shall 17 have become a law; provided that: 18 (a) the amendments to section 26-405 of the city rent and rehabili- 19 tation law made by section one of this act shall remain in full force 20 and effect only as long as the public emergency requiring the regulation 21 and control of residential rents and evictions continues, as provided in 22 subdivision 3 of section 1 of the local emergency housing rent control 23 act; 24 (b) the amendments to section 26-511 of the rent stabilization law of 25 nineteen hundred sixty-nine made by section two of this act shall expire 26 on the same date as such law expires and shall not affect the expiration 27 of such law as provided under section 26-520 of such law, as from time 28 to time amended; 29 (c) the amendment to section 6 of the emergency tenant protection act 30 of nineteen seventy-four made by section three of this act shall expire 31 on the same date as such act expires and shall not affect the expiration 32 of such act as provided in section 17 of chapter 576 of the laws of 33 1974, as from time to time amended; and 34 (d) the amendment to section 4 of the emergency housing rent control 35 law made by section four of this act shall expire on the same date as 36 such law expires and shall not affect the expiration of such law as 37 provided in subdivision 2 of section 1 of chapter 274 of the laws of 38 1946.
