Sets criteria for approval of rent increases resulting from major capital improvements in certain dwellings

Purpose

This bill prevents landlords from receiving a financial windfall from major capital improvements funded by the New York State Energy and Development Authority (NYSERDA).

Summary of specific provisions

Section 1 - Amends paragraph 3 of subdivision d of section 6 of section 4 of chapter 576 of the laws of 1974 to exclude NYSERDA funded projects.

Section 2 - Amends subparagraph g of paragraph 1 of subdivision g of section 26-405 of the administrative code of the city of New York to exclude NYSERDA funded projects.

Section 3 - Amends subparagraph k of paragraph 1 of subdivision g of section 26-405 of the administrative code of the city of New York to exclude NYSERDA funded projects.

Section 4 - Effective date.

Justification

Landlords currently utilize major capital improvement surcharges as a back door way to raise their tenant's rents. Although some MCI surcharges are legitimate, many landlords apply for and are granted the MCI surcharge for work that is not an improvement, but routine mainte- nance. This is not the intent of the MCI program. The problem stems from the fact that there are no statutory guidelines to direct the division of Housing and Community Renewal as to what will have no fiscal impli- cations for the State.

The NYSERDA Multifamily Performance Program offers landlords incentives to invest in energy-efficient building upgrades, including implementing environmentally friendly measures to address specific energy and opera- tional needs of buildings. In many cases landlords have filed applica- tions with the Division of Housing and Community Renewal for Major Capi- tal Improvement rent increases for capital work that is part of their

jurisdiction for receiving NYSERDA funds. This practice of double-dip- ping, by taking advantage of two different incentives for the same work, violates the intent of the incentive provisions and, if permitted, results in a windfall to landlords. This bill would clarify that such double-dipping is not permitted.

Fiscal impact on the state

None.

Effective date

This act shall take effect immediately, provided that:

(a) the amendments to section 26-405 of the city rent and rehabilitation law made by sections one, five and six of this act shall remain in full force and effect only so long as the public emergency requiring the regulation and control of residential rents and evictions continues, as provided in subdivision 3 of section 1 of the local emergency housing rent control act;

(b) the amendment to section 26-511 of the rent stabilization law of nineteen hundred sixty-nine made by section two of this act shall expire on the same date as such law expires and shall not affect the expiration of such law as provided under section 26-520 of such law, as from time to time amended; and

(c) the amendments to section 6 of the emergency tenant protection act of nineteen seventy-four made by sections three and four of this act shall expire on the same date as such act expires and shall not affect the expiration of such act as provided in section 17 of chapter 576 of the laws of 1974, as from time to time amended.