What's happening
This bill restricts major capital improvement rent increases to only upgrades or enhancements, adds tenant protections, and bars increases for improvements funded by NYSERDA.
Why it matters
Narrows what counts as a major capital improvement (MCI). Only true upgrades, enhancements, or new additions to a building can justify permanent rent increases; routine repairs or replacements to maintain existing services no longer qualify, limiting landlords’ ability to pass maintenance costs to tenants.
Adds strong tenant protections and transparency. Landlords seeking MCI rent increases must provide detailed advance notice—including owner history and planned work—to both the state and tenants, and cannot pursue increases if there are unresolved hazardous building violations (unless the improvement directly fixes the violation).
Prevents abusive landlord behavior. Owners or those with significant interests in the property are barred from applying for MCI increases if they have a recent history (within five years) of tenant harassment or unlawful evictions, reducing incentives for bad actors.
Ensures public funds don’t drive up rents. If a building upgrade is paid for in any part with money from NYSERDA (a state energy agency), landlords cannot raise rents based on those improvements, ensuring that state-funded energy efficiency or sustainability programs benefit tenants, not just landlords.
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Limit Rent Hikes for Repairs
Plain English, a few words. Used as the page title.
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History
- Referred to housing, construction and community development
- Referred to housing, construction and community development
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3713
2017-2018 Regular Sessions
IN SENATE
January 26, 2017
Introduced by Sen. KRUEGER -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development
AN ACT to amend the administrative code of the city of New York and the emergency tenant protection act of nineteen seventy-four, in relation to approval of major capital improvement rent increases
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 26-405 of the administrative code of the city of New York is amended by adding a new subdivision n to read as follows:
n. (1) No major capital improvement rent increase will be approved by the division of housing and community renewal unless the work performed is an enhancement or upgrade to a housing accommodation or service therein; or is an addition to such housing accommodation and otherwise eligible according to the prerequisites for major capital improvement rent increases. Any repair or replacement intended to maintain an existing service shall not be eligible for a major capital improvement rent increase.
(2) No application for a major capital improvement rent increase may be approved if there exist any outstanding hazardous violations at the time of the consideration of such application, as determined pursuant to regulations of the division of housing and community renewal or any agency administering and enforcing a building code in the jurisdiction in which the property is located, unless it is determined by the division of housing and community renewal that such work is essential to the alleviation of the violations and such approval is consistent with the provisions of this section. Except in the case of emergency or good cause, the owner of the property shall file, not less than thirty days before the commencement of the improvement, with the division of housing and community renewal a statement containing information outlining the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09041-01-7
S. 3713 2
scope of work, expected date of completion for such work and an affidavit setting forth the following information:
(a) every owner of record and owner of a substantial interest in the property or entity owning the property or sponsoring the improvement; and
(b) a statement that none of such persons had, within the five years prior to the improvement, been found to have harassed or unlawfully evicted tenants by judgment or determination of a court or agency under the penal law, any state or local law regulating rents or any state or local law relating to harassment of tenants or unlawful eviction.
Upon receipt of the scope of work and affidavit provided for herein, the division of housing and community renewal shall provide the tenants in occupancy in such buildings with such information. The division of housing and community renewal shall, in addition, implement procedures including, but not limited to, eliciting tenant comments to determine whether major capital improvement rehabilitation work has been satisfactorily completed. No major capital improvement rent increase shall become effective until any defective or deficient rehabilitation work has been cured.
§ 2. Subdivision c of section 26-511 of the administrative code of the city of New York is amended by adding a new paragraph 6-b to read as follows:
(6-b) provides criteria whereby the commissioner may act upon application by owners for increases in excess of the level of fair rent increase established under this law provided however, that such criteria shall provide that:
(1) no major capital improvement rent increase will be approved by the division of housing and community renewal unless the work performed is an enhancement or upgrade to a housing accommodation or service therein; or is an addition to such housing accommodation and otherwise eligible according to the prerequisites for major capital improvement rent increases. Any repair or replacement intended to maintain an existing service shall not be eligible for a major capital improvement rent increase.
(2) no application for a major capital improvement rent increase may be approved if there exist any outstanding hazardous violations at the time of the consideration of such application, as determined pursuant to regulations of the division of housing and community renewal or any agency administering and enforcing a building code in the jurisdiction in which the property is located, unless it is determined by the division of housing and community renewal that such work is essential to the alleviation of the violations and such approval is consistent with the provisions of this section. Except in the case of emergency or good cause, the owner of the property shall file, not less than thirty days before the commencement of the improvement, with the division of housing and community renewal a statement containing information outlining the scope of work, expected date of completion for such work and an affidavit setting forth the following information:
(a) every owner of record and owner of a substantial interest in the property or entity owning the property or sponsoring the improvement; and
(b) a statement that none of such persons had, within the five years prior to the improvement, been found to have harassed or unlawfully evicted tenants by judgment or determination of a court or agency under the penal law, any state or local law regulating rents or any state or local law relating to harassment of tenants or unlawful eviction.
S. 3713 3
Upon receipt of the scope of work and affidavit provided for herein, the division of housing and community renewal shall provide the tenants in occupancy in such buildings with such information. The division of housing and community renewal shall, in addition, implement procedures including, but not limited to, eliciting tenant comments to determine whether major capital improvement rehabilitation work has been satisfactorily completed. No major capital improvement rent increase shall become effective until any defective or deficient rehabilitation work has been cured.
§ 3. Section 6 of section 4 of chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventyfour, is amended by adding a new subdivision d-1 to read as follows:
d-1. (1) No major capital improvement rent increase will be approved by the division of housing and community renewal unless the work performed is an enhancement or upgrade to a housing accommodation or service therein; or is an addition to such housing accommodation and otherwise eligible according to the prerequisites for major capital improvement rent increases. Any repair or replacement intended to maintain an existing service shall not be eligible for a major capital improvement rent increase.
(2) No application for a major capital improvement rent increase may be approved if there exist any outstanding hazardous violations at the time of the consideration of such application, as determined pursuant to regulations of the division of housing and community renewal or any agency administering and enforcing a building code in the jurisdiction in which the property is located, unless it is determined by the division of housing and community renewal that such work is essential to the alleviation of the violations and such approval is consistent with the provisions of this section. Except in the case of emergency or good cause, the owner of the property shall file, not less than thirty days before the commencement of the improvement, with the division of housing and community renewal a statement containing information outlining the scope of work, expected date of completion for such work and an affidavit setting forth the following information:
(a) every owner of record and owner of a substantial interest in the property or entity owning the property or sponsoring the improvement; and
(b) a statement that none of such persons had, within the five years prior to the improvement, been found to have harassed or unlawfully evicted tenants by judgment or determination of a court or agency under the penal law, any state or local law regulating rents or any state or local law relating to harassment of tenants or unlawful eviction.
Upon receipt of the scope of work and affidavit provided for herein, the division of housing and community renewal shall provide the tenants in occupancy in such buildings with such information. The division of housing and community renewal shall, in addition, implement procedures including, but not limited to, eliciting tenant comments to determine whether major capital improvement rehabilitation work has been satisfactorily completed. No major capital improvement rent increase shall become effective until any defective or deficient rehabilitation work has been cured.
§ 4. Subdivision d of section 6 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nineteen seventy-four is amended by adding a new paragraph 6 to read as follows:
S. 3713 4
(6) Notwithstanding paragraph three of this subdivision there shall be no adjustment for any major capital improvement funded in any part from moneys provided by the New York state energy research and development authority.
§ 5. Paragraph 1 of subdivision g of section 26-405 of the administrative code of the city of New York is amended by adding a new subparagraph (p) to read as follows:
(p) Notwithstanding subparagraph (g) or (k) of this paragraph, there shall be no adjustment for any major capital improvement or for any other expenditures to improve, restore or preserve the quality of a structure if such major capital improvement or such other expenditure is funded in any part from moneys provided by the New York state energy research and development authority.
§ 6. 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 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) 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the administrative code of the city of New York and the emergency tenant protection act of nineteen seventy-four, in relation to approval of major capital improvement rent increases
Purpose
This bill would establish a regulatory framework for the approval of rent increases to rent regulated property as a result of major capital improvements and prevent landlords from receiving a financial windfall from major capital improvements funded by the New York State Energy and Development Authority (NYSERDA).
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.
Read the full memo (639 words)
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.
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