What's happening
This bill makes rent increases for apartment improvements temporary rather than permanent, tightens documentation requirements, and sets new limits on allowable costs.
Why it matters
Makes rent increases for apartment improvements temporary, not permanent. this directly impacts how much tenants pay in the long term, ensuring that once the cost of the improvement is paid off (amortized), the rent does not stay elevated, potentially saving tenants significant money over time.
Switches to a slower cost recovery formula (from 1/40 or 1/60 to 1/84 of improvement cost per month). this means landlords recoup their investment in improvements more slowly, which could discourage unnecessary or inflated renovations solely to raise rents, while still allowing for legitimate upgrades.
Mandates detailed cost documentation and official review. landlords must provide tenants and the housing authority with a full breakdown of expenses (invoices, contracts, checks) and get approval for rent increases that exceed published cost schedules or 10% above previous rent, adding transparency and preventing abuse.
Excludes cosmetic upgrades and restricts repeat charges for similar improvements. rent increases cannot be based on purely aesthetic changes or on repeated upgrades of the same type within the expected lifespan of prior work, focusing increases only on substantive, necessary improvements and further protecting tenants from unjustified rent hikes.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Limit Rent Hike Costs
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to housing, construction and community development
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit Rent Increase Amounts
In Senate Committee · Housing, Construction And Community Development · Sponsor Brian Kavanagh
Full text
7 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
498
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sens. SQUADRON, HOYLMAN -- 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, the emergency tenant protection act of nineteen seventy-four and the emergency housing rent control law, in relation to adjustment of maximum allowable rent
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (e) of paragraph 1 of subdivision g of section 26-405 of the administrative code of the city of New York, as amended by section 15 of part B of chapter 97 of the laws of 2011, is amended to read as follows:
(e) The landlord and tenant by mutual voluntary written agreement agree to a substantial increase or decrease in dwelling space or a change in the services, furniture, furnishings or equipment provided in the housing accommodations. An adjustment under this subparagraph shall be temporary until such increase or modification has been paid for and shall be equal to [one-fortieth, in the case of a building with thirtyfive or fewer housing accommodations, or one-sixtieth, in the case of a building with more than thirty-five housing accommodations where such adjustment takes effect on or after September twenty-fourth, two thousand eleven,] one eighty-fourth of the total cost incurred by the landlord in providing such modification or increase in dwelling space, services, furniture, furnishings or equipment, including the cost of installation, but excluding finance charges and cosmetic improvements, provided further that an owner who is entitled to a rent increase pursuant to this subparagraph shall not be entitled to a further rent increase based upon the installation of similar equipment, or new furniture or furnishings within the useful life of such new equipment, or new
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01124-01-7
S. 498 2
furniture or furnishings. The owner shall give written notice to the city rent agency of any such adjustment pursuant to this subparagraph; or
§ 2. Subdivision g of section 26-405 of the administrative code of the city of New York is amended by adding a new paragraph 8 to read as follows:
(8) (a) Within one hundred twenty days of the effective date of this paragraph, the division of housing and community renewal shall issue a schedule of reasonable costs for upgrades and improvements that may be claimed as a basis for an adjustment of rent pursuant to subparagraph (e) of paragraph one of this subdivision. The schedule of reasonable costs shall exclude cosmetic improvements. The schedule of reasonable costs shall be based on the average costs for similar upgrades or improvements made to comparable properties located in each county, subject to the provisions of this chapter, and shall be updated at least once every two years. No increase in rent shall be collectible under subparagraph (e) of paragraph one of this subdivision based upon costs that exceed the reasonable costs set forth in the schedule, unless approved by the division pursuant to subparagraph (b) of this paragraph.
(b) Within thirty days of the signing of a mutual voluntary written agreement including a rent increase pursuant to subparagraph (e) of paragraph one of this subdivision that includes improvements that exceed the schedule of reasonable costs pursuant to subparagraph (a) of this paragraph, the landlord will file with the division of housing and community renewal an explanation of how the rent was computed, and all documents necessary to support the collection of such increase, including but not limited to, cancelled checks, invoices and signed contracts contemporaneously with the improvements alleged and a statement that any increase above the previous rent is in accordance with adjustments permitted by law. Upon receipt of all documents submitted by the landlord, and after giving the tenant an opportunity to respond, the division of housing and community renewal shall issue an order approving or disapproving such increase in whole or in part.
(c) Within thirty days of the signing of a mutual voluntary written agreement including a rent increase that exceeds ten percent of the maximum collectible rent, the landlord will file with the division of housing and community renewal an explanation of how the rent was computed, and all documents necessary to support the collection of such increase, including but not limited to, cancelled checks, invoices and signed contracts contemporaneously with the improvements alleged and a statement that any increase above the previous rent is in accordance with adjustments permitted by law. Upon receipt of all documents submitted by the owner, and after giving the tenant an opportunity to respond, the division of housing and community renewal shall issue an order approving or disapproving such increase in whole or in part. Based upon such determination, the division of housing and community renewal shall order a refund to the tenant equal to the amount collected in excess of the rent approved by the division of housing and community renewal.
(d) No increase in rent shall be collectible under subparagraph (e) of paragraph one of this subdivision until:
(1) the landlord has provided the tenant with a written notice, including an explanation of how the rent in the mutual voluntary written agreement has been computed, and the specific amounts of all expenditures supporting a rent increase under subparagraph (e) of paragraph one of this subdivision; and
S. 498 3
(2) the landlord has filed with the division of housing and community renewal an explanation of how the rent was computed, and all documents necessary to support the collection of such increase, including, but not limited to, cancelled checks, invoices and signed contracts entered into contemporaneously with the improvements alleged, and a statement that any increase above the previous rent is in accordance with adjustments permitted by law.
(e) No increase shall be collectible under subparagraph (e) of paragraph one of this subdivision where the division of housing and community renewal has determined that the owner is not maintaining all building-wide required services or all required services with respect to the affected housing accommodation, or where there are current or outstanding hazardous violations of any municipal, county, state or federal law which relate to the maintenance of such services.
§ 3. Paragraph 13 of subdivision c of section 26-511 of the administrative code of the city of New York, as amended by section 16 of part B of chapter 97 of the laws of 2011, is amended to read as follows:
(13) provides that an owner is entitled to a temporary rent increase where there has been a substantial modification or increase of dwelling space or an increase in the services, or installation of new equipment or improvements or new furniture or furnishings provided in or to a tenant's housing accommodation, until such modification or increase has been paid for, on written tenant consent to the rent increase. In the case of a vacant housing accommodation, tenant consent shall not be required.
(a) The [permanent] temporary increase in the legal regulated rent for the affected housing accommodation shall be [one-fortieth, in the case of a building with thirty-five or fewer housing accommodations, or onesixtieth, in the case of a building with more than thirty-five housing accommodations where such permanent increase takes effect on or after September twenty-fourth, two thousand eleven,] one eighty-fourth of the total cost incurred by the landlord in providing such modification or increase in dwelling space, services, furniture, furnishings or equipment, including the cost of installation, but excluding finance charges and cosmetic improvements.
(b) Provided further that an owner who is entitled to a rent increase pursuant to this paragraph shall not be entitled to a further rent increase based upon the installation of similar equipment, or new furniture or furnishings within the useful life of such new equipment, or new furniture or furnishings.
§ 4. Subdivision c of section 26-511 of the administrative code of the city of New York is amended by adding a new paragraph 15 to read as follows:
(15) (a) Within one hundred twenty days of the effective date of this paragraph, the division of housing and community renewal shall issue a schedule of reasonable costs for upgrades and improvements that may be claimed as a basis for an adjustment of rent pursuant to paragraph thirteen of this subdivision. The schedule of reasonable costs shall exclude cosmetic improvements. The schedule of reasonable costs shall be based on the average costs for similar upgrades or improvements made to comparable properties located in each county, subject to the provisions of this chapter, and shall be updated at least once every two years. No increase in rent shall be collectible under paragraph thirteen of this subdivision based upon costs that exceed the reasonable costs set forth in the schedule, unless approved by the division pursuant to subparagraph (b) of this paragraph.
S. 498 4
(b) Within thirty days of the signing of a vacancy lease including a rent increase pursuant to paragraph thirteen of this subdivision that includes improvements that exceed the schedule of reasonable costs pursuant to subparagraph (a) of this paragraph, the landlord will file with the division of housing and community renewal an explanation of how the vacancy rent was computed, and all documents necessary to support the collection of such increase, including but not limited to, cancelled checks, invoices and signed contracts contemporaneously with the improvements alleged and a statement that any increase above the previous rent is in accordance with adjustments permitted by law. Upon receipt of all documents submitted by the landlord, and after giving the tenant named in the vacancy lease an opportunity to respond, the division of housing and community renewal shall issue an order approving or disapproving such increase in whole or in part.
(c) Within thirty days of the signing of a vacancy lease including a rent increase that exceeds ten percent of the rent charged to the previous tenant, the landlord will file with the division of housing and community renewal an explanation of how the rent was computed, and all documents necessary to support the collection of such increase, including but not limited to, cancelled checks, invoices and signed contracts contemporaneously with the improvements alleged and a statement that any increase above the previous rent is in accordance with adjustments permitted by law. Upon receipt of all documents submitted by the owner, and after giving the tenant named in such vacancy lease an opportunity to respond, the division of housing and community renewal shall issue an order approving or disapproving such increase in whole or in part. Based upon such determination, the division of housing and community renewal shall order a refund to the tenant equal to the amount collected in excess of the rent approved by the division of housing and community renewal.
(d) No increase in rent shall be collectible under paragraph thirteen of this subdivision until:
(i) the landlord has provided the tenant with a written notice, including an explanation of how the rent in the vacancy lease has been computed, and the specific amounts of all expenditures supporting a rent increase under paragraph thirteen of this subdivision; and
(ii) the landlord has filed with the division of housing and community renewal an explanation of how the vacancy rent was computed, and all documents necessary to support the collection of such increase, including, but not limited to, cancelled checks, invoices and signed contracts entered into contemporaneously with the improvements alleged, and a statement that any increase above the previous rent is in accordance with adjustments permitted by law.
(e) No increase shall be collectible under paragraph thirteen of this subdivision where the division of housing and community renewal has determined that the owner is not maintaining all building-wide required services or all required services with respect to the affected housing accommodation, or where there are current or outstanding hazardous violations of any municipal, county, state or federal law which relate to the maintenance of such services.
§ 5. Paragraph 1 of 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, as amended by section 18 of part B of chapter 97 of the laws of 2011, is amended to read as follows:
(1) there has been a substantial modification or increase of dwelling space or an increase in the services, or installation of new equipment
S. 498 5
or improvements or new furniture or furnishings, provided in or to a tenant's housing accommodation, on written tenant consent to the rent increase. In the case of a vacant housing accommodation, tenant consent shall not be required.
(a) The [permanent] temporary increase in the legal regulated rent for the affected housing accommodation shall be [one-fortieth, in the case of a building with thirty-five or fewer housing accommodations, or onesixtieth, in the case of a building with more than thirty-five housing accommodations where such permanent increase takes effect on or after September twenty-fourth, two thousand eleven,] one eighty-fourth of the total cost incurred by the landlord in providing such modification or increase in dwelling space, services, furniture, furnishings or equipment, including the cost of installation, but excluding finance charges and cosmetic improvements.
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, the emergency tenant protection act of nineteen seventy-four and the emergency housing rent control law, in relation to adjustment of maximum allowable rent
Purpose
To make consistent the rental adjustment a landlord may charge a tenant for the total cost incurred for individual apartment improvements and to require landlords to provide documentation explaining how adjustment was computed.
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:
Read the full memo (744 words)
*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
2016: S3285B/A6069 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT/referred to ways and means 2015: S3285B/A6069 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT/referred to housing
Fiscal implications
Some expense associated with DHCR administration of program.
Effective date
This act takes effect on the 90th day after it becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.