My name is Richard N. Gottfried. I represent the 75th Assembly District in Manhattan, which includes the neighborhoods of Chelsea, Clinton, Murray Hill, Midtown, and part of the Upper West Side. My district has one of the highest concentrations of rent-regulated apartments in New York City.

I regret that the legislative session in Albany makes it impossible for me to be here in person to testify. Thank you to Commissioner Darryl C. Towns for the opportunity to submit this testimony and for holding this important hearing.

I am grateful the agency responded to feedback from elected officials, tenant groups, and other stakeholders. I add my support to the testimony submitted today by Tenants & Neighbors. I agree that these proposed regulations will go a long way to promote the fair treatment of rent regulated tenants.

I am particularly pleased to see the agency propose reasonable restrictions on the granting of MCIs, including the prohibition on using MCIs to pass the cost of utilities in older buildings to tenants through sub-metering. The restriction on MCIs being granted to owners with immediately hazardous conditions is an important one. However, I agree with advocates that the language needs to be revised to clarify that such denials would be automatic, not optional.

The proposed regulations are significantly improved on issues of tenant harassment through baseless decontrol filings, tightening the rules around preferential rents, the absence of meaningful consequences to landlords who lie in filings to HCR, and landlords who fail to register units taking vacancy increases, among many others.

There is, however, much more that needs to be done. With regard to Individual Apartment Increases (IAIs), HCR should amend the rules that allow landlords to increase rents based upon improvements to unoccupied apartments. This loophole is a significant driving force behind rent increases and high-rent destabilization. In fact, the abuse of IAIs is so pervasive, that I believe that HCR should completely revamp the way it handles IAI applications, starting, as advocates have suggested, with HCR investigating all cases in which the legal regulated rent would rise by more than 20 percent in a vacant apartment. HCR should only allow increases for truly substantial improvements, accept only a schedule of reasonable costs rather than the actual (often inflated) costs, and restrict owners to using licensed contractors to do this work. Too often, a premium is charged for “improvements” when the quality of the labor and the materials is inferior.

While there is much to celebrate about the proposed regulations, I am disappointed that the problem of illegally de-controlled units and the need for a clear mechanism to return them to rent stabilization has not been addressed. This is an urgent issue with regard to the illegally deregulated J-51 units impacted by the Roberts v Tishman Speyer decision, and with regard to the untold numbers of units lost through the endemic illegal use and occupancy of residential units as hotels. New York City is working to enforce the 2010 Illegal Hotels Law I authored with State Senator Liz Krueger. Yet, the landlords who harassed tenants out or warehoused units to engage in this illegal behavior are now financially benefiting from the state’s inability to undo the illegal deregulation related to their documented illegal behavior.

These regulatory changes will do much to benefit tenants. I appreciate your hard work and urge approval. Thank you again for the opportunity to present testimony today.