Relates to rent regulation

Summary of specific provisions

Part A would:

* limit a landlord's ability to take possession of rent-regulated units for his or her own primary residence to cases of immediate and compelling necessity;

* permit recovery of only one such unit; and

* prohibit such recoveries if the tenant has occupied the apartment. twenty or more Years.

Part B would:

* decrease from twenty percent to ten percent the amount a landlord could increase rent upon vacancy and also prohibit a landlord from taking more than one increase in anyone calendar year.

Part C would:

* include former section 8 projects in the types of multiple dwellings that are covered by the New York City Rent Stabilization Law; and

* enable localities to include former Section 8 projects as a type of housing accommodation that would be subject to the Emergency Tenant protection Act of 1974.

Part D would:

* remove provisions prohibiting cities of one million or more from strengthening rent regulation laws to provide more comprehensive coverage that state laws.

Part E would extend:

* the Emergency Housing Rent Control Law;

* the Emergency Tenant Protection Act;

* sections 52-eee and 352-eeee of the General Business Law establishing cooperative and condominium conversion laws in New York City, Nassau, Westchester, and Rockland counties; and

* the ability of the Division of Housing and Community Renewal to issue increased penalties for violations of rent regulation law.

These various statutes would be extended until and including dune 15, 2016, provided that there continues to be a housing emergency.

Part F would:

* reduce the amount by which the legal regulated rent can be raised when a landlord makes an improvement to an individual unit. It would be adjusted from one fortieth to one-sixtieth of the cost of the improvement;

* in the case of an improvement to a vacant unit, require the landlord to issue a notice to the new tenant that states the prior legal rent and an explanation of the improvements and their individual costs;

* require the landlord that is applying for a rent increase to file with the Division of Housing and Community Renewal within thirty days of signing a lease a detailed explanation listing all of the improvements that the landlord used to calculate the new rent. The new provisions would require the landlord to file supporting documents that indicate the cost of the improvement and that the work has been paid for and completed. The Division would then be required to either approve or disapprove of the increase;

* prohibit a landlord from collecting any rent increases in a building that is in violation of any municipal, county, state, or federal laws that relate to the maintenance of required services; and

* in situations where the landlord willfully overcharged a tenant, allow the Division of Housing and Community Renewal to order the landlord to repay the tenant an additional amount not to exceed three times the amount overcharged.

Part G would:

* repeal § 2 of the emergency housing rent control law;

* repeal § 4(5) (a) (13) of the emergency tenant protection act;

* repeal § 26-403(e)(2)(k) of the administrative code of New York;.

* repeal § 26-504.2 of the administrative code of New York;

* bring any rent-regulated unit that was deregulated on or after January 1, 2007, under the protection of rent regulation laws. The amount for rent would be set at the same amount as the maximum legal regulated rent on December 31, 2000, subject to any further legal adjustments;

* bring any rent-regulated-unit that was deregulated before January 1, 2007, under the protection of rent regulation laws if it meets certain criteria. It must have been rented on or after January 1, 2007, for an amount less than $3,500 if the unit is located outside New York City or for an amount less than $5,000 if the unit is located in New York City. The amount for rent would be set at the first applicable rent on or after January 1, 2007, for the unit, subject to any further legal adjustments.

Part H would:

* amend § 4(10) (a-2) of the Emergency Tenant Protection Act and 26511(c)(14) of the Administrative Code of New York, to only allow the landlord to readjust the rent of preferential rent regulated apartments upon vacancy;

* add a provision that only allows the landlord to raise the unit's rent if the vacancy of the apartment was not caused by the landlord's failure to maintain the unit in a habitable condition;

* amend § 26-511(c)(14) of the administrative code of New York, to repeal the provision that would automatically deregulate a unit, upon vacancy, if the monthly rent for the unit is above $2,000; and

* amend §4(10)(a-2) of the emergency tenant protection act, to repeal the provision that would automatically deregulate a unit upon vacancy if the monthly rent for the unit is above $2,000.

Part I would:

* provide that owners of buildings must own a building for six years before they can submit a hardship application to the Division of Housing and Community Renewal (DHCR) for an increase in excess of applicable rent guideline increases. Such application may only be granted if the commissioner of DHCR finds that the current guideline increases are not sufficient to enable the owner to maintain an annual gross rent income of at least five percent higher than the operating expenses for the building. Operating expenses include the actual, reasonable costs of fuel, labor, utilities, taxes other than income or corporate franchise taxes, fees, permits, necessary contracted services, non-capital repairs, insurance, parts and supplies, management fees, other administrative costs, and mortgage interest.

Part J would:

* require that a major capital improvement rent increase cease once the cost of such improvement has been paid for;

* provide that such increase be a temporary surcharge, lasting no more than seven years, which is separately designated and billed from the rent;

* provide a method for determining the surcharge allocable to each apartment based upon the number of rooms in the apartment; and

* mandate that such surcharge be limited to six percent of the monthly rent collected, and that any additional monies necessary to cover the

cost of MCI's be collected in, future years as a further surcharge not to exceed an additional six percent in any one year period.

Part K would;

* authorize municipalities to declare a housing emergency for former Mitchell-Lama buildings that have voluntarily dissolved pursuant to 535 of the Private Housing Finance Law, and prohibits an owner from applying to the Division of Housing and Community Renewal for a rent adjustment based on the presence of unique or peculiar circumstances

Justification

New York's rent-regulation laws provide protection to approximately 2.5 million tenants throughout the state. The basis for both rent control and rent stabilization is a housing emergency, defined as a vacancy rate below five percent. Recent analysis of vacancy rates in New York City has shown that the number of available apartments has decreased to below three percent, which is well below the five percent threshold necessary to declare a housing emergency.

For the rent-regulation laws to work, major loopholes must be closed. For example, an Individual Apartment Improvement Increase allows a landlord to raise the rent on rent stabilized apartments by passing the cost of physical improvements to the next tenant by raising the monthly rent an amount equal to 1/90th of the total cost of the improvements.

A 1/90th increase can be taken in addition to any other rent increase to which the landlord is statutorily entitled. There is no oversight of any kind of the 1/90th loophole. Landlords are allowed to unilaterally impose 1/40th rent increases without prior approval, or even documentation. The current oversight mechanism is an inadequate tenant-initiated complaint filed with the Division of Housing and Community Renewal as a Complaint of Rent Overcharge. Because the improvement occurs in a vacant apartment, the new tenant has no way of knowing what the rent should be, and if the work done justifies the increase. This legislation would give ONCE the authority to approve or disapprove such increases in whole or in part based upon the proof of expenses submitted by the landlord and would reduce the increase to 1/60th the amount of the individual apartment improvement.

With the shortage of housing in New York City and its surrounding areas, vacancy decontrol laws only continue the erosion of the existing rent regulation programs. Vacancy decontrol is an incentive for owners of rental housing to withhold services and to use forms of harassment to induce regulated tenants to vacate their rental units. In some instances, costs of renovation have been inflated or even falsified in order to drive apartment rents to the $2,000 threshold for vacancy decontrol. The need to repeal these provisions in statute are of the greatest urgency, thus preserving affordable housing in New York City, and protecting low and middle income families.

Also, building owners are currently allowed to increase rent levels based on major capitol improvements to their buildings on a schedule to recover all costs within a seven year period. However, tenants have been forced to continue to pay for such improvements far past the window in which costs have been recovered. This bill seeks to balance the conflicting concerns of maintaining affordable housing and

insuring adequate incentives for investment in MCI's in order to preserve and improve our housing stock.

In addition to the above mentioned reasons, this bill would make many other significant changes to the rent regulation laws to address the erosion of the existing rent regulation laws. These loopholes allow drastic increases in rent and can even be used to force tenants from their homes. The loss of affordable housing units can undermine and uproot local communities by forcing working families from their homes in the neighborhoods they helped create many years ago. This bill is an important stew to ensure that the residents of New York will still have access to affordable housing.

Prior legislative history

This is new legislation.

Fiscal implications for state and local governments

None to the state

Effective date

Part A: This act shall take effect immediately and shall apply to any tenant in possession at or after the time it takes effect, regardless of whether the landlord's application for an order, refusal to renew a lease or refusal to extend or renew a tenancy took place before this act shall have taken effect, provided that amendments made to the administrative code of the city of New York, the emergency tenant protection act, and the emergency housing rent control law shall expire-on the same date as such law expires and shall not affect the expiration-date of such law.

Part B: This act shall take effect immediately, provided that amendments made to the administrative code of the city of New York and the emergency tenant protection act shall expire on the same date as such law expires and shall not affect the expiration date of such law.

Part C: This act shall take effect immediately and shall apply to all buildings that are covered by a project based assistance contract pursuant to section eight of the United States housing act of 1937, which contract ceased to be effective on or after such date; provided that amendments made to the administrative code of the city of New York and the emergency tenant protection act shall expire on the same date as such law expires and shall not affect the expiration date of such law.

Part D: This act shall take effect immediately; provided, however, that the amendments to chapter 21 of the laws of 1962 made by section one 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; provided further, however, that the amendment to the second undesignated paragraph of subdivision 5 of section 1 of chapter 21 of the. laws of 1962 made by section one of this act shall not affect the expiration of such paragraph and shall be deemed to expire therewith.

Part E: This act shall take effect immediately.

Part F: This act shall take effect on the ninetieth day after it shall have become a law, provided that amendments made to the administrative

code of the city of New York, the emergency tenant protection act, and the emergency housing rent control law shall expire on the same date as such law expires and shall not affect the expiration date of such law. Effective immediately, the Division of Housing and Community Renewal is authorized to and shall promulgate all rules, regulations and standards necessary to implement the provisions of this act.

Part G: This act shall take effect immediately.

Part H and Part I, This act shall take effect immediately, provided that amendments made to the administrative code of the city of New York and the emergency tenant protection act shall expire on the same date as such law expires and shall not affect the expiration date of such law.

Part J: This act shall take effect immediately, provided that the amendments made to section 26-405 of the city rent and rehabilitation law made by Sections one and two 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; and provided further that amendments made to the administrative code of the city of New York, the emergency tenant protection act, and the emergency housing rent control law shall expire on the same date as such law expires and shall not affect the expiration date of such law. Part K: This act shall take effect immediately and shall apply to housing companies that dissolve before, on or after such date, provided, however, that the amendments made to the emergency tenant protection act shall not affect the expiration of such act.