Precludes owners from collecting further rent increases if they fail to pay their housing unit fee

Summary of provisions

Section 1 amends section 26-517.1 of the Administrative Code of the City of New York by increasing the annual fee collected by the New York City Department of Finance for each registered rent stabilized unit from $10 to $30.

Section 2 amends subdivisions c of section 8 of the Emergency Tenant Protection Act of 1974 by increasing the annual fee collected by the New York City Department of Finance for each registered rent stabilized unit from $10 to $30. All revenues collected by the City Department of Finance are transferred to the DHCR to cover the costs of administering the rent regulation laws. Subdivision d of Section 8 of the Emergency Tenant Protection Act of 1974 is amended to authorize the City of New York to commence collection action against any building owner that fails to pay the $30 per unit annual assessment.

Section 3 establishes that all increased revenues transferred each year to the Commissioner of the DHCR shall be equally divided between the DHCR's ORA and TPU, and includes a maintenance of effort requirement for existing funding of the ORA and TPU.

Section 4 provides for the effective date.

Justification

The DHCR has sole responsibility for administering and enforcing New York's rent regulation laws which enable almost two million people to live in safe, stable, and affordable housing. The agency requires significant additional resources to effectively fulfill its statutory responsibilities. Due to substantial staff reductions and repeated budget cuts over the last two decades, the DHCR simply does not have the capacity it needs respond to complaints within reasonable timeframes, prevent fraud, or proactively investigate the majority of potential violations.

Tenant advocates, building owners, and attorneys all regularly express great frustration with the time periods they are forced to wait for DHCR to respond to applications and complaints. Tenants and building owners are frequently forced to wait a minimum of a year for the ORA to process even the most basic cases, and complex cases frequently take five years or longer to be concluded. Many report that they do not even attempt to file cases with the agency because they know they will have to wait years to receive a determination. Affordable housing advocates and tenant attorneys have repeatedly documented that

thousands of desperately needed rent regulated apartments are illegally deregulated each year, and countless tenants are overcharged, because of DHCR's limited resources.

In recent years, the leadership of DHCR undertaken a number of important reforms to improve its administration of the rent laws. The most significant of these reforms was the establishment of the TPU in 2011 which is exclusively focused on protecting tenants' rights and proactively enforcing compliance. In its first two years, the TPU reregistered more than 28,000 rent stabilized apartments, initiated comprehensive investigations of building owners suspected of systematically overcharging tenants, and reached major settlements with landlords who violated harassment and discrimination laws. In order to build on these accomplishments, the TPU must have increased and dependable resources. The TPU has less than two dozen employees to and is currently funded solely with agency reappropriations. Due to its limited staff, the TPU has only been able to investigate a small fraction of the cases brought to its attention. It is simply impossible for even the most dedicated employees to expeditiously and fairly enforce laws impacting the lives of almost two million residents with such severe limitations.

Historically, the cost of administering and enforcing the rent laws has been funded almost exclusively by the revenue generated by the annual per unit fee paid by owners of rent stabilized apartments in New York City. An annual fee is collected by the New York City Department of Finance from building owners for each rent stabilized apartment and then transferred to the State DHCR. However, the annual unit fee of $10 has not increased since 1984 when administration of all rent controlled and rent stabilized units was transferred to the state. Simply increasing the annual fee from $10 per apartment to $30 per apartment generate almost $20 million each year for the ORA and TPU without placing an onerous burden on building owners or tenants. The higher unit fee would be factored into building owners' costs each year when the New York City Rent Guidelines Board considers rent increases, and any small rent increase that resulted would be far outweighed by the benefits of significantly enhanced and efficient services from the ORA and TPU.

Legislative history

This is a new bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately.