Relates to adjustment of maximum allowable rent

Summary of specific provisions

Sections 1 - 6 amend the Administrative Code of the City of New York and the Emergency Tenant Protection Act of nineteen seventy-four to:

*Make consistent the rental adjustment a landlord may charge a tenant for the total cost incurred for an individual apartment improvement. This bill provides that an adjustment shall be equal to 1/84th of the total cost incurred for improvements, for buildings with 35 or fewer apartments and buildings with over 35 apartments and excludes cosmetic improvements from such adjustments.

*Require the Division of Housing and Community Renewal to issue a schedule of reasonable costs for repairs, based on regional costs.

*Create a process for DHCR to approve repairs that exceed the established schedule of reasonable costs.

*Require DHCR approve increases that exceed 10% of the rent charged to the previous tenant.

*Require landlords to submit detail of proof to the tenant relating to work that has been completed when rent is raised, rather than when challenged by a tenant.

*Require landlords to submit detail of proof to DHCR relating to work that has been completed when rent is raised, rather than when challenged by a tenant.

*Provide that no increase in rent shall be collectible where DHCR has determined that the owner has outstanding violations.

*Make IAI improvements temporary, rather than permanent.

Section 7 amends the emergency housing rent control law to make consistent the rental adjustment a landlord may charge a tenant for the total cost incurred for an individual apartment improvement. This bill provides that an adjustment shall be equal to 1/60th of the total cost incurred for improvements, for buildings with 35 or fewer apartments and buildings with over 35 apartments.

Section 8 establishes the effective date.

Justification

The Individual Apartment Improvement increase 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 or 1/60th of the total cost of the improvements. This increase can be taken in addition to any other rent increase to which the landlord is statutorily entitled.

Landlords are able to use the increase to move the apartment above the current decontrol threshold that allows them to permanently de-regulate the apartment. To approach that threshold more quickly, landlords can make improvements that exceed what would be considered a reasonable cost. Although there are not absolutely clear government records of the frequency with which these increases are used, it is clear that rent regulated apartments are moving out of affordability at a rate faster than statutory rent increases would allow.

The only present oversight mechanism is a tenant-initiated complaint. The tenant may challenge the rent increase up to four years after the installation. Only then, is a claimed individual apartment improvement supported by adequate documentation.

This legislation would make consistent the rental adjustment a landlord may charge a tenant for the total cost incurred for an individual apartment improvement. It would also require DHCR to issue a schedule of reasonable costs for repairs, based on regional costs, so that landlords don't purposely try to deregulate an apartment through improvements. DHCR is also given the authority to approve or disapprove such increases related to the schedule in whole or in part based upon the proof of expenses submitted by the landlord. Finally, this legislation will also give new tenants and DHCR a breakdown of how the increase in rent was computed and information that a tenant needs to challenge an increase. This information will be given at the time of the rental increase rather than after a tenant challenges an increase.

Prior legislative history

New Bill

Fiscal implications

Some expense associated with DHCR administration of program.

Effective date

This act takes effect on the 90th day after it becomes law.