Provides that an application by an owner of rent regulated property in NYC to the division of housing and community renewal for a hardship rent increase above rent guidelines shall not be granted where the tenant has not received notice of such application and been given an opportunity to be heard with respect thereto.
STATE OF NEW YORK
________________________________________________________________________
1966
2011-2012 Regular Sessions
IN ASSEMBLY
January 12, 2011
___________
Introduced by M. of A. JEFFRIES, WRIGHT, GLICK -- Multi-Sponsored by --
M. of A. FARRELL, PRETLOW -- read once and referred to the Committee
on Housing
AN ACT to amend the administrative code of the city of New York, in
relation to hardship rent increases
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 years prior to the date of application may apply
8 to the division for increases in excess of the level of applicable
9 guideline increases established under this law based on a finding by
10 the commissioner that such guideline increases are not sufficient to
11 enable the owner to maintain an annual gross rent income for such build-
12 ing which exceeds the annual operating expenses of such building by a
13 sum equal to at least five percent of such gross rent. For the purposes
14 of this paragraph, operating expenses shall consist of the actual,
15 reasonable, 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
24 time the mortgage is placed, the term of the mortgage, the amortization
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04662-01-1
A. 1966 2
1 rate, the principal amount of the mortgage, security and other terms and
2 conditions of the mortgage. The commissioner shall set a rental value
3 for any unit occupied by the owner or a person related to the owner or
4 unoccupied at the owner's choice for more than one month at the last
5 regulated rent plus the minimum number of guidelines increases or, if no
6 such regulated rent existed or is known, the commissioner shall impute a
7 rent consistent with other rents in the building. The amount of hardship
8 increase shall be such as may be required to maintain the annual gross
9 rent income as provided by this paragraph. The division shall not grant
10 a hardship application under this paragraph or paragraph six of this
11 subdivision for a period of three years subsequent to granting a hard-
12 ship application under the provisions of this paragraph or where the
13 tenant has not received notice of such application and been given an
14 opportunity to be heard with respect thereto; provided, however, the
15 provision for being heard shall not require an adjudicatory or other
16 formal hearing. The collection of any increase in the rent for any hous-
17 ing accommodation pursuant to this paragraph shall not exceed six
18 percent in any year from the effective date of the order granting the
19 increase over the rent set forth in the schedule of gross rents, with
20 collectability of any dollar excess above said sum to be spread forward
21 in similar increments and added to the rent as established or set in
22 future years. No application shall be approved unless the owner's equity
23 in such building exceeds five percent of: (i) the arms length purchase
24 price of the property; (ii) the cost of any capital improvements for
25 which the owner has not collected a surcharge; (iii) any repayment of
26 principal of any mortgage or loan used to finance the purchase of the
27 property or any capital improvements for which the owner has not
28 collected a surcharge and (iv) any increase in the equalized assessed
29 value of the property which occurred subsequent to the first valuation
30 of the property after purchase by the owner. For the purposes of this
31 paragraph, owner's equity shall mean the sum of (i) the purchase price
32 of the property less the principal of any mortgage or loan used to
33 finance the purchase of the property, (ii) the cost of any capital
34 improvement for which the owner has not collected a surcharge less the
35 principal of any mortgage or loan used to finance said improvement,
36 (iii) any repayment of the principal of any mortgage or loan used to
37 finance the purchase of the property or any capital improvement for
38 which the owner has not collected a surcharge, and (iv) any increase in
39 the equalized assessed value of the property which occurred subsequent
40 to the first valuation of the property after purchase by the owner.
41 § 2. This act shall take effect immediately provided that the amend-
42 ment to section 26-511 of the rent stabilization law of nineteen hundred
43 sixty-nine made by section one of this act shall expire on the same date
44 as such law expires and shall not affect the expiration of such law as
45 provided under section 26-520 of such law.
