STATE OF NEW YORK ________________________________________________________________________ 1886 2025-2026 Regular Sessions IN ASSEMBLY January 14, 2025 ___________ Introduced by M. of A. ROSENTHAL, RAGA, TAYLOR -- read once and referred to the Committee on Housing AN ACT to amend the administrative code of the city of New York, the emergency tenant protection act of nineteen seventy-four and the emer- gency housing rent control law, in relation to inspection of major capital improvements for which rent increases are requested and in relation to extending the provisions of the rent stabilization law The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section 2 26-405 of the administrative code of the city of New York, as amended by 3 section 27 of part Q of chapter 39 of the laws of 2019, is amended to 4 read as follows: 5 (g) There has been since July first, nineteen hundred seventy, a major 6 capital improvement essential for the preservation energy efficiency, 7 functionality, or infrastructure of the entire building, improvement of 8 the structure including heating, windows, plumbing and roofing but shall 9 not be for operational costs or unnecessary cosmetic improvements. The 10 temporary increase based upon a major capital improvement under this 11 subparagraph for any order of the commissioner issued after [the effec- 12 tive date of the chapter of the laws of two thousand nineteen that 13 amended this subparagraph] June 14, 2019 shall be in an amount suffi- 14 cient to amortize the cost of the improvements pursuant to this subpara- 15 graph [(g)] over a twelve-year period for buildings with thirty-five or 16 fewer units or a twelve and one-half year period for buildings with more 17 than thirty-five units, and shall be removed from the legal regulated 18 rent thirty years from the date the increase became effective inclusive 19 of any increases granted by the applicable rent guidelines board. Tempo- 20 rary major capital improvement increases shall be collectible prospec- 21 tively on the first day of the first month beginning sixty days from the 22 date of mailing notice of approval to the tenant. Such notice shall EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04468-01-5
A. 1886 2 1 disclose the total monthly increase in rent and the first month in which 2 the tenant would be required to pay the temporary increase. An approval 3 for a temporary major capital improvement increase shall not include 4 retroactive payments. The collection of any increase shall not exceed 5 two percent in any year from the effective date of the order granting 6 the increase over the rent set forth in the schedule of gross rents, 7 with collectability of any dollar excess above said sum to be spread 8 forward in similar increments and added to the rent as established or 9 set in future years. Upon vacancy, the landlord may add any remaining 10 balance of the temporary major capital improvement increase to the legal 11 regulated rent. No landlord shall deny access to a professional engi- 12 neer licensed to practice in the state of New York or a registered 13 architect licensed to practice in the state of New York hired by any 14 tenant, tenants or tenant association representing tenants for the 15 purpose of conducting an inspection of a major capital improvement for 16 which an application for adjustment of maximum rent has been filed. Such 17 inspection shall be conducted after notice to the landlord and during 18 normal business hours. Such tenant may file the report of the inspection 19 with the city rent agency for consideration in the determination of such 20 application. Notwithstanding any other provision of the law, for any 21 renewal lease commencing on or after June 14, 2019, the collection of 22 any rent increases due to any major capital improvements approved on or 23 after June 16, 2012 and before June 16, 2019 shall not exceed two 24 percent in any year for any tenant in occupancy on the date the major 25 capital improvement was approved, or 26 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 27 tive code of the city of New York, as separately amended by section 12 28 of part K of chapter 36 and section 28 of part Q of chapter 39 of the 29 laws of 2019, is amended to read as follows: 30 (6) provides criteria whereby the commissioner may act upon applica- 31 tions by owners for increases in excess of the level of fair rent 32 increase established under this law provided, however, that such crite- 33 ria shall provide (a) as to hardship applications, for a finding that 34 the level of fair rent increase is not sufficient to enable the owner to 35 maintain approximately the same average annual net income (which shall 36 be computed without regard to debt service, financing costs or manage- 37 ment fees) for the three year period ending on or within six months of 38 the date of an application pursuant to such criteria as compared with 39 annual net income, which prevailed on the average over the period nine- 40 teen hundred sixty-eight through nineteen hundred seventy, or for the 41 first three years of operation if the building was completed since nine- 42 teen hundred sixty-eight or for the first three fiscal years after a 43 transfer of title to a new owner provided the new owner can establish to 44 the satisfaction of the commissioner that [he or she] they acquired 45 title to the building as a result of a bona fide sale of the entire 46 building and that the new owner is unable to obtain requisite records 47 for the fiscal years nineteen hundred sixty-eight through nineteen 48 hundred seventy despite diligent efforts to obtain same from predeces- 49 sors in title and further provided that the new owner can provide finan- 50 cial data covering a minimum of six years under [his or her] their 51 continuous and uninterrupted operation of the building to meet the three 52 year to three year comparative test periods herein provided; and (b) as 53 to completed building-wide major capital improvements, for a finding 54 that such improvements are deemed depreciable under the Internal Revenue 55 Code and that the cost is to be amortized over a twelve-year period for 56 a building with thirty-five or fewer housing accommodations, or a twelve
A. 1886 3 1 and one-half-year period for a building with more than thirty-five hous- 2 ing accommodations, for any determination issued by the division of 3 housing and community renewal after [the effective date of the the chap- 4 ter of the laws of two thousand nineteen that amended this paragraph] 5 June 14, 2019 and shall be removed from the legal regulated rent thirty 6 years from the date the increase became effective inclusive of any 7 increases granted by the applicable rent guidelines board. Temporary 8 major capital improvement increases shall be collectible prospectively 9 on the first day of the first month beginning sixty days from the date 10 of mailing notice of approval to the tenant. Such notice shall disclose 11 the total monthly increase in rent and the first month in which the 12 tenant would be required to pay the temporary increase. An approval for 13 a temporary major capital improvement increase shall not include retro- 14 active payments. The collection of any increase shall not exceed two 15 percent in any year from the effective date of the order granting the 16 increase over the rent set forth in the schedule of gross rents, with 17 collectability of any dollar excess above said sum to be spread forward 18 in similar increments and added to the rent as established or set in 19 future years. Upon vacancy, the landlord may add any remaining balance 20 of the temporary major capital improvement increase to the legal regu- 21 lated rent. No landlord shall deny access to a professional engineer 22 licensed to practice in the state of New York or a registered architect 23 licensed to practice in the state of New York hired by any tenant, 24 tenants or tenant association representing tenants for the purpose of 25 conducting an inspection of a major capital improvement for which an 26 application for adjustment of maximum rent has been filed. Such 27 inspection shall be conducted after notice to the landlord and during 28 normal business hours. Such tenant may file the report of the inspection 29 with the state division of housing and community renewal for consider- 30 ation in the determination of such application. Notwithstanding any 31 other provision of the law, for any renewal lease commencing on or after 32 June 14, 2019, the collection of any rent increases due to any major 33 capital improvements approved on or after June 16, 2012 and before June 34 16, 2019 shall not exceed two percent in any year for any tenant in 35 occupancy on the date the major capital improvement was approved or 36 based upon cash purchase price exclusive of interest or service charges. 37 Where an application for a temporary major capital improvement increase 38 has been filed, a tenant shall have sixty days from the date of mailing 39 of a notice of a proceeding in which to answer or reply. The state divi- 40 sion of housing and community renewal shall provide any responding 41 tenant with the reasons for the division's approval or denial of such 42 application. Notwithstanding anything to the contrary contained herein, 43 no hardship increase granted pursuant to this paragraph shall, when 44 added to the annual gross rents, as determined by the commissioner, 45 exceed the sum of, (i) the annual operating expenses, (ii) an allowance 46 for management services as determined by the commissioner, (iii) actual 47 annual mortgage debt service (interest and amortization) on its indebt- 48 edness to a lending institution, an insurance company, a retirement fund 49 or welfare fund which is operated under the supervision of the banking 50 or insurance laws of the state of New York or the United States, and 51 (iv) eight and one-half percent of that portion of the fair market value 52 of the property which exceeds the unpaid principal amount of the mort- 53 gage indebtedness referred to in subparagraph (iii) of this paragraph. 54 Fair market value for the purposes of this paragraph shall be six times 55 the annual gross rent. The collection of any increase in the stabilized 56 rent for any apartment pursuant to this paragraph shall not exceed six
A. 1886 4 1 percent in any year from the effective date of the order granting the 2 increase over the rent set forth in the schedule of gross rents, with 3 collectability of any dollar excess above said sum to be spread forward 4 in similar increments and added to the stabilized rent as established or 5 set in future years; 6 § 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter 7 576 of the laws of 1974, constituting the emergency tenant protection 8 act of nineteen seventy-four, as amended by section 26 of part Q of 9 chapter 39 of the laws of 2019, is amended to read as follows: 10 (3) there has been since January first, nineteen hundred seventy-four 11 a major capital improvement essential for the preservation, energy effi- 12 ciency, functionality, or infrastructure of the entire building, 13 improvement of the structure including heating, windows, plumbing and 14 roofing, but shall not be for operation costs or unnecessary cosmetic 15 improvements. An adjustment under this paragraph shall be in an amount 16 sufficient to amortize the cost of the improvements pursuant to this 17 paragraph over a twelve-year period for a building with thirty-five or 18 fewer housing accommodations, or a twelve and one-half period for a 19 building with more than thirty-five housing accommodations and shall be 20 removed from the legal regulated rent thirty years from the date the 21 increase became effective inclusive of any increases granted by the 22 applicable rent guidelines board, for any determination issued by the 23 division of housing and community renewal after [the effective date of 24 the chapter of the laws of two thousand nineteen that amended this para- 25 graph] June 14, 2019. Temporary major capital improvement increases 26 shall be collectable prospectively on the first day of the first month 27 beginning sixty days from the date of mailing notice of approval to the 28 tenant. Such notice shall disclose the total monthly increase in rent 29 and the first month in which the tenant would be required to pay the 30 temporary increase. An approval for a temporary major capital improve- 31 ment increase shall not include retroactive payments. The collection of 32 any increase shall not exceed two percent in any year from the effective 33 date of the order granting the increase over the rent set forth in the 34 schedule of gross rents, with collectability of any dollar excess above 35 said sum to be spread forward in similar increments and added to the 36 rent as established or set in future years. Upon vacancy, the landlord 37 may add any remaining balance of the temporary major capital improvement 38 increase to the legal regulated rent. No landlord shall deny access to 39 a professional engineer licensed to practice in the state of New York or 40 a registered architect licensed to practice in the state of New York 41 hired by any tenant, tenants or tenant association representing tenants 42 for the purpose of conducting an inspection of a major capital improve- 43 ment for which an application for adjustment of maximum rent has been 44 filed. Such inspection shall be conducted after notice to the landlord 45 and during normal business hours. Such tenant may file the report of the 46 inspection with the state division of housing and community renewal for 47 consideration in the determination of such application. Notwithstanding 48 any other provision of the law, the collection of any rent increases for 49 any renewal lease commencing on or after June 14, 2019, due to any major 50 capital improvements approved on or after June 16, 2012 and before June 51 16, 2019 shall not exceed two percent in any year for any tenant in 52 occupancy on the date the major capital improvement was approved, or 53 § 4. Subparagraph 7 of the second undesignated paragraph of para- 54 graph (a) of subdivision 4 of section 4 of chapter 274 of the laws 55 of 1946, constituting the emergency housing rent control law as sepa-
A. 1886 5 1 rately amended by section 14 of part K of chapter 36 and section 25 of 2 part Q of chapter 39 of the laws of 2019, is amended to read as follows: 3 (7) there has been since March first, nineteen hundred fifty, a major 4 capital improvement essential for the preservation, energy efficiency, 5 functionality, or infrastructure of the entire building, improvement of 6 the structure including heating, windows, plumbing and roofing, but 7 shall not be for operational costs or unnecessary cosmetic improvements; 8 which for any order of the commissioner issued after [the effective date 9 of the chapter of the laws of two thousand nineteen that amended this 10 paragraph] June 14, 2019 the cost of such improvement shall be amortized 11 over a twelve-year period for buildings with thirty-five or fewer units 12 or a twelve and one-half year period for buildings with more than thir- 13 ty-five units, and shall be removed from the legal regulated rent thirty 14 years from the date the increase became effective inclusive of any 15 increases granted by the applicable rent guidelines board. Temporary 16 major capital improvement increases shall be collectible prospectively 17 on the first day of the first month beginning sixty days from the date 18 of mailing notice of approval to the tenant. Such notice shall disclose 19 the total monthly increase in rent and the first month in which the 20 tenant would be required to pay the temporary increase. An approval for 21 a temporary major capital improvement increase shall not include retro- 22 active payments. The collection of any increase shall not exceed two 23 percent in any year from the effective date of the order granting the 24 increase over the rent set forth in the schedule of gross rents, with 25 collectability of any dollar excess above said sum to be spread forward 26 in similar increments and added to the rent as established or set in 27 future years. Upon vacancy, the landlord may add any remaining balance 28 of the temporary major capital improvement increase to the legal regu- 29 lated rent. No landlord shall deny access to a professional engineer 30 licensed to practice in the state of New York or a registered architect 31 licensed to practice in the state of New York hired by any tenant, 32 tenants or tenant association representing tenants for the purpose of 33 conducting an inspection of a major capital improvement for which an 34 application for adjustment of maximum rent has been filed. Such 35 inspection shall be conducted after notice to the landlord and during 36 normal business hours. Such tenant may file the report of the inspection 37 with the state division of housing and community renewal for consider- 38 ation in the determination of such application. Notwithstanding any 39 other provision of the law, for any renewal lease commencing on or after 40 June 14, 2019, the collection of any rent increases due to any major 41 capital improvements approved on or after June 16, 2012 and before June 42 16, 2019 shall not exceed two percent in any year for any tenant in 43 occupancy on the date the major capital improvement was approved; 44 provided, however, where an application for a temporary major capital 45 improvement increase has been filed, a tenant shall have sixty days from 46 the date of mailing of a notice of a proceeding in which to answer or 47 reply. The state division of housing and community renewal shall provide 48 any responding tenant with the reasons for the division's approval or 49 denial of such application; or 50 § 5. This act shall take effect on the one hundred twentieth day 51 after it shall have become a law; provided, however, that the amendments 52 to section 26-405 of the city rent and rehabilitation law made by 53 section one of this act shall remain in full force and effect only so 54 long as the public emergency requiring the regulation and control of 55 residential rents and evictions continues, as provided in subdivision 3 56 of section 1 of the local emergency housing rent control act; and
A. 1886 6 1 provided further that the amendments to section 26-511 of the rent 2 stabilization law of nineteen hundred sixty-nine made by section two of 3 this act shall expire on the same date as such law expires and shall not 4 affect the expiration of such law as provided under section 26-520 of 5 such law. Effective immediately, the addition, amendment and/or repeal 6 of any rule and regulation necessary for the implementation of this act 7 on its effective date are authorized to be made on or before such effec- 8 tive date.