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 4-0)
Status: (Introduced - Dead) 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 All increases to rents allowed 3 during the life of the major capital improvement program shall be 4 repealed upon petition from a tenant, all applications pending review 5 for the major capital improvement program shall be denied, and no rent 6 increases shall be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. LBD16373-06-8S. 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 asS. 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 major12capital improvement required for the operation, preservation or mainte-13nance of the structure; which for any order of the commissioner issued14after the effective date of the rent act of 2015 the cost of such15improvement shall be amortized over an eight-year period for buildings16with thirty-five or fewer units or a nine year period for buildings with17more 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 403S. 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-four5a major capital improvement required for the operation, preservation or6maintenance of the structure. An adjustment under this paragraph shall7be in an amount sufficient to amortize the cost of the improvements8pursuant to this paragraph over an eight-year period for a building with9thirty-five or fewer housing accommodations, or a nine-year period for a10building with more than thirty-five housing accommodations, for any11determination issued by the division of housing and community renewal12after the effective date of the rent act of 2015, or13(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 thisS. 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 [a34major 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 amountS. 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 capital54improvement, or] a substantial increase or decrease in dwelling space or 55 a change in the services, furniture, furnishings or equipment providedS. 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, a19major capital improvement required for the operation, preservation or20maintenance of the structure. An adjustment under this subparagraph (g)21for any order of the commissioner issued after the effective date of the22rent act of 2015 shall be in an amount sufficient to amortize the cost23of the improvements pursuant to this subparagraph (g) over an eight-year24period for buildings with thirty-five or fewer units or a nine year25period for buildings with more than thirty-five units, or26(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 hundred51seventy, in connection with and in addition to a concurrent major capi-52tal improvement pursuant to subparagraph (g) of this paragraph, other53expenditures to improve, restore or preserve the quality of the struc-54ture. An adjustment under this subparagraph shall be granted only if55such improvements represent an expenditure equal to at least ten per56centum of the total operating and maintenance expenses for the precedingS. 9154--A 9 1year. An adjustment under this subparagraph shall be in addition to any2adjustment granted for the concurrent major capital improvement and3shall be in an amount sufficient to amortize the cost of the improve-4ments 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 rentS. 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 thisS. 9154--A 13 1section] 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 6S. 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 capital46improvement, 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 toS. 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-19wide major capital improvements, for a finding that such improvements20are deemed depreciable under the Internal Revenue Code and that the cost21is to be amortized over an eight-year period for a building with thir-22ty-five or fewer housing accommodations, or a nine-year period for a23building with more than thirty-five housing accommodations, for any24determination issued by the division of housing and community renewal25after the effective date of the rent act of 2015, based upon cash26purchase 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 effectS. 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.