Amd §§26-405 & 26-511, NYC Ad Cd; amd §6, Emerg Ten Prot Act of 1974; amd §4, Emerg Hous Rent Cont L
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.
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.
LBD11100-01-9
A. 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.
