Relates to adjustment of maximum rent

BILL NUMBER:S8371A

Title of bill

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 adjustment of maximum allowable rent and individual apartment improvement notices

Purpose or general idea of the bill

Expenses for individual apartment improvements in rental housing are currently recovered over three and a half years in calculating the permissible monthly rent increase. This bill increases the length of time to five years and authorizes the Division of Housing and community Renewal (DHCR) to approve such rent increases for vacant apartments.

Summary of specific provisions

Sections 1 through 4 increase the amortization period for expenses due to individual apartment increases from 40 months to 60 months.

Section 2 would amend the emergency tenant protection act 6(d) (1), to require a building owner to give the tenant written notice of a rent increase based upon individual apartment improvements as part of a condition for obtaining such increase.

Effects of present law which this bill would alter

Extends the amortization period from 40 months to 60 months and requires the owner to give notice of the increase calculation to the tenant and file with DHCR.

Justification

Current law allows a landlord to raise the rent on an unoccupied rent stabilized apartment by passing the cost of physical improvements to the next tenant by raising the monthly rent an amount equal to 1/40th of the total cost of the improvements. A 1/40th increase can be taken in addi- tion to any other rent increase to which the landlord is statutorily entitled. Under this legislation, that increase is limited to 1/60th of the total cost of the improvement.

In addition, it has been a continuous practice for owners of rent stabi- lized units to impose rent increases on tenants based upon IAIs without having to notify and explain the calculation of those rent increases, making it difficult to contest the rent increases. This legislation would correct that process by requiring building owners to give the tenant written notice of the calculation of such increase on a form prescribed by the Department of Housing and Community Renewal (DHCR) and to file such form with the DHCR. This amendment would conform and make similar the provisions of the rent stabilization law with those of the rent control which already requires a filing of a written notice with the DHCR disclosing the IAIs performed.

Prior legislative history

New legislation.

Fiscal implications

Some administrative expense associated with DHCR overseeing this program.

Effective date

Immediately, with provisions.