Bill Text: NY A01297 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to alternative hardship applications for properties subject to the rent stabilization code.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2017-05-18 - advanced to third reading cal.375 [A01297 Detail]
Download: New_York-2017-A01297-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 1297 2017-2018 Regular Sessions IN ASSEMBLY January 11, 2017 ___________ Introduced by M. of A. KAVANAGH, DINOWITZ, ROSENTHAL, PERRY -- Multi- Sponsored by -- M. of A. FARRELL, GOTTFRIED -- read once and referred to the Committee on Housing 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 hardship applications The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 6-a of subdivision c of section 26-511 of the 2 administrative code of the city of New York is amended to read as 3 follows: 4 (6-a) provides criteria whereby as an alternative to the hardship 5 application provided under paragraph six of this subdivision owners of 6 buildings acquired by the same owner or a related entity owned by the 7 same principals [three] six years prior to the date of application may 8 apply to the division for increases in excess of the level of applicable 9 guideline increases established under this law based on a finding by the 10 commissioner that such guideline increases are not sufficient to enable 11 the owner to maintain an annual gross rent income for such building 12 which exceeds the annual operating expenses of such building by a sum 13 equal to at least five percent of such gross rent. For the purposes of 14 this paragraph, operating expenses shall consist of the actual, reason- 15 able, costs of fuel, labor, utilities, taxes, other than income or 16 corporate franchise taxes, fees, permits, necessary contracted services 17 and non-capital repairs, insurance, parts and supplies, management fees 18 and other administrative costs and mortgage interest. For the purposes 19 of this paragraph, mortgage interest shall be deemed to mean interest on 20 a bona fide mortgage including an allocable portion of charges related 21 thereto. Criteria to be considered in determining a bona fide mortgage 22 other than an institutional mortgage shall include; condition of the 23 property, location of the property, the existing mortgage market at the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01449-01-7A. 1297 2 1 time the mortgage is placed, the term of the mortgage, the amortization 2 rate, the principal amount of the mortgage, security and other terms and 3 conditions of the mortgage. The commissioner shall set a rental value 4 for any unit occupied by the owner or a person related to the owner or 5 unoccupied at the owner's choice for more than one month at the last 6 regulated rent plus the minimum number of guidelines increases or, if no 7 such regulated rent existed or is known, the commissioner shall impute a 8 rent consistent with other rents in the building. The amount of hardship 9 increase shall be such as may be required to maintain the annual gross 10 rent income as provided by this paragraph. The division shall not grant 11 a hardship application under this paragraph or paragraph six of this 12 subdivision for a period of three years subsequent to granting a hard- 13 ship application under the provisions of this paragraph. The collection 14 of any increase in the rent for any housing accommodation pursuant to 15 this paragraph shall not exceed six percent in any year from the effec- 16 tive date of the order granting the increase over the rent set forth in 17 the schedule of gross rents, with collectability of any dollar excess 18 above said sum to be spread forward in similar increments and added to 19 the rent as established or set in future years. No application shall be 20 approved unless the owner's equity in such building exceeds five percent 21 of: (i) the arms length purchase price of the property; (ii) the cost of 22 any capital improvements for which the owner has not collected a 23 surcharge; (iii) any repayment of principal of any mortgage or loan used 24 to finance the purchase of the property or any capital improvements for 25 which the owner has not collected a surcharge and (iv) any increase in 26 the equalized assessed value of the property which occurred subsequent 27 to the first valuation of the property after purchase by the owner. For 28 the purposes of this paragraph, owner's equity shall mean the sum of (i) 29 the purchase price of the property less the principal of any mortgage or 30 loan used to finance the purchase of the property, (ii) the cost of any 31 capital improvement for which the owner has not collected a surcharge 32 less the principal of any mortgage or loan used to finance said improve- 33 ment, (iii) any repayment of the principal of any mortgage or loan used 34 to finance the purchase of the property or any capital improvement for 35 which the owner has not collected a surcharge, and (iv) any increase in 36 the equalized assessed value of the property which occurred subsequent 37 to the first valuation of the property after purchase by the owner. 38 § 2. Paragraph 5 of subdivision d of section 6 of section 4 of chapter 39 576 of the laws of 1974 enacting the emergency tenant protection act of 40 nineteen seventy-four, as amended by chapter 102 of the laws of 1984, is 41 amended to read as follows: 42 (5) as an alternative to the hardship application provided under para- 43 graph four of this subdivision, owners of buildings acquired by the same 44 owner or a related entity owned by the same principals [three] six years 45 prior to the date of application may apply to the division for increases 46 in excess of the level of applicable guideline increases established 47 under this law based on a finding by the commissioner that such guide- 48 line increases are not sufficient to enable the owner to maintain an 49 annual gross rent income for such building which exceeds the annual 50 operating expenses of such building by a sum equal to at least five 51 percent of such gross rent. For the purposes of this paragraph, operat- 52 ing expenses shall consist of the actual, reasonable, costs of fuel, 53 labor, utilities, taxes, other than income or corporate franchise taxes, 54 fees, permits, necessary contracted services and non-capital repairs, 55 insurance, parts and supplies, management fees and other administrative 56 costs and mortgage interest. For the purposes of this paragraph, mort-A. 1297 3 1 gage interest shall be deemed to mean interest on a bona fide mortgage 2 including an allocable portion of charges related thereto. Criteria to 3 be considered in determining a bona fide mortgage other than an institu- 4 tional mortgage shall include; condition of the property, location of 5 the property, the existing mortgage market at the time the mortgage is 6 placed, the term of the mortgage, the amortization rate, the principal 7 amount of the mortgage, security and other terms and conditions of the 8 mortgage. The commissioner shall set a rental value for any unit occu- 9 pied by the owner or a person related to the owner or unoccupied at the 10 owner's choice for more than one month at the last regulated rent plus 11 the minimum number of guidelines increases or, if no such regulated rent 12 existed or is known, the commissioner shall impute a rent consistent 13 with other rents in the building. The amount of hardship increase shall 14 be such as may be required to maintain the annual gross rent income as 15 provided by this paragraph. The division shall not grant a hardship 16 application under this paragraph or paragraph four of this subdivision 17 for a period of three years subsequent to granting a hardship applica- 18 tion under the provisions of this paragraph. The collection of any 19 increase in the rent for any housing accommodation pursuant to this 20 paragraph shall not exceed six percent in any year from the effective 21 date of the order granting the increase over the rent set forth in the 22 schedule of gross rents, with collectability of any dollar excess above 23 said sum to be spread forward in similar increments and added to the 24 rent as established or set in future years. No application shall be 25 approved unless the owner's equity in such building exceeds five percent 26 of: (i) the arms length purchase price of the property; (ii) the cost of 27 any capital improvements for which the owner has not collected a 28 surcharge; (iii) any repayment of principal of any mortgage or loan used 29 to finance the purchase of the property or any capital improvements for 30 which the owner has not collected a surcharge; and (iv) any increase in 31 the equalized assessed value of the property which occurred subsequent 32 to the first valuation of the property after purchase by the owner. For 33 the purposes of this paragraph, owner's equity shall mean the sum of (i) 34 the purchase price of the property less the principal of any mortgage or 35 loan used to finance the purchase of the property, (ii) the cost of any 36 capital improvement for which the owner has not collected a surcharge 37 less the principal of any mortgage or loan used to finance said improve- 38 ment, (iii) any repayment of the principal of any mortgage or loan used 39 to finance the purchase of the property or any capital improvement for 40 which the owner has not collected a surcharge, and (iv) any increase in 41 the equalized assessed value of the property which occurred subsequent 42 to the first valuation of the property after purchase by the owner. 43 § 3. This act shall take effect immediately; provided that the amend- 44 ments to section 26-511 of chapter 4 of title 26 of the administrative 45 code of the city of New York made by section one of this act shall 46 expire on the same date as such law expires and shall not affect the 47 expiration of such law as provided under section 26-520 of such law; and 48 provided that the amendments to section 6 of the emergency tenant 49 protection act of nineteen seventy-four made by section two of this act 50 shall expire on the same date as such act expires and shall not affect 51 the expiration of such act as provided in section 17 of chapter 576 of 52 the laws of 1974.
