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

Summary of provisions

Sections 1, 2, and 3 - Establish criteria for approval of rent increases to rent regulated property resulting from major capital improvements. The criteria will be used to ensure that the work performed is an enhancement or upgrade to a housing accommodation or service, and is not merely a repair or replacement of existing services. It also prohibits approval of major capital improvement rent increases when any outstanding hazardous violations exist.

Section 4 - Amends subdivision d of section 6 of section 4 of chapter 576 of the laws of 1974 by adding a new paragraph 6 to exclude NYSERDA funded projects from receiving adjustments for major capital improvements.

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

Section 6 - Effective date.

Justification

Many landlords currently utilize major capital improvement surcharges as an unscrupulous means to raise the rent of their units, unfairly burdening their tenants. Although some MCI surcharges are legitimate, many landlords apply for, and arc granted, the MCI surcharge for work that is simply routine maintenance, and not an actual improvement. This is not the intent of the MCI program. The lack of statutory guidelines to direct the division of housing and Community Renewal as to the criteria for approval of MCI surcharges is a major source of the problem.

In addition to MCI surcharges approved by the Division of Housing and Community Renewal, the NYSERDA Multi-family Performance Program offers landlords incentives to invest in energy-efficient building upgrades, including implementing environmentally friendly-measures to address specific energy and operational needs of buildings. In many cases landlords have filed applications with both the Division of Housing and Community Renewal for MCI rent increases for capital work that is part of their jurisdiction for receiving NYSERDA funds. This practice of double-dipping, 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 amendment to section 26-405 or the city rent and -rehabilitation law made by section one and five 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) and provided further that 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 provided further that

(c) the amendment to section 6 of the emergency tenant protection 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.