Bill Text: NY A06772 | 2023-2024 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Provides that when a housing accommodation has been vacated after continuous tenancy or occupancy of ten years or more prior to vacancy, and the owner can demonstrate restoration of the unit, the new legal regulated rent shall be the rent agreed to by the owner and first tenant after such restoration and reserved in a lease or other rental agreement; makes related provisions.
Spectrum: Moderate Partisan Bill (Democrat 9-1)
Status: (Introduced) 2024-07-22 - enacting clause stricken [A06772 Detail]
Download: New_York-2023-A06772-Introduced.html
Bill Title: Provides that when a housing accommodation has been vacated after continuous tenancy or occupancy of ten years or more prior to vacancy, and the owner can demonstrate restoration of the unit, the new legal regulated rent shall be the rent agreed to by the owner and first tenant after such restoration and reserved in a lease or other rental agreement; makes related provisions.
Spectrum: Moderate Partisan Bill (Democrat 9-1)
Status: (Introduced) 2024-07-22 - enacting clause stricken [A06772 Detail]
Download: New_York-2023-A06772-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6772 2023-2024 Regular Sessions IN ASSEMBLY May 8, 2023 ___________ Introduced by M. of A. BURGOS, CUNNINGHAM, GIBBS, ALVAREZ, FALL, HYND- MAN, BENEDETTO -- read once and referred to the Committee on Housing AN ACT to amend the administrative code of the city of New York, in relation to certain housing accommodations; and to amend chapter 576 of the laws of 1974, constituting the emergency tenant protection act of nineteen seventy-four, in relation to certain hardship provisions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision c of section 26-511 of the administrative code 2 of the city of New York is amended by adding a new paragraph 15 to read 3 as follows: 4 (15) provides that, notwithstanding any other provision of this chap- 5 ter to the contrary, when a housing accommodation subject to this chap- 6 ter has been vacated after continuous tenancy or occupancy of ten years 7 or more prior to vacancy, and the owner has submitted documentation to 8 the division demonstrating restoration of the unit as set forth in 9 section 26-511.2 of this chapter, the new legal regulated rent shall be 10 the rent agreed to by the owner and first tenant after such restoration 11 and reserved in a lease or other rental agreement; provided that such 12 new legal regulated rent may be adjusted on audit by the division under 13 section 26-511.2 of this chapter, or on application of a tenant under 14 section 26-513.1 of this chapter. The legal regulated rent adjustment 15 set forth in this paragraph shall be known as the local regulated hous- 16 ing restoration adjustment. 17 § 2. The administrative code of the city of New York is amended by 18 adding a new section 26-511.2 to read as follows: 19 § 26-511.2 The local regulated housing restoration adjustment. a. The 20 division of housing and community renewal, the "division" shall estab- 21 lish a notification procedure and documentation submission guidelines 22 for the local regulated housing restoration adjustment. Documentation EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10320-04-3A. 6772 2 1 to qualify for the local regulated housing restoration adjustment shall 2 be limited to: 3 (1) XRF test results demonstrating a lead-free housing accommodation 4 under applicable local definitions; 5 (2) any required tenant protection plans or similar submission in 6 connection with such restoration; 7 (3) any required contractor licenses; 8 (4) list and specifications of new electric appliances installed; 9 (5) before and after photos; 10 (6) lease or rental agreement listing new legal regulated rent; and 11 (7) legal regulated rent amount or amounts for substantially similar 12 unit or units as defined by section 26-513.1 of this chapter. 13 b. The local regulated housing restoration adjustment shall not be 14 permitted: 15 (1) for units that are rented within a twenty-four-month period after 16 an arm's length transfer of ownership; 17 (2) for units that are rented within a thirty-six-month period after 18 determination by the division that the owner has engaged in unlawful 19 harassment with respect to the unit; or 20 (3) after an eviction, unless the eviction was pursuant to order, 21 judgment, or other decree by court or governmental or legal authority 22 for reasons including nonpayment of rent, expiration or termination of 23 the lease term or license or other occupancy right, violation of a 24 substantial obligation of the tenancy, or any other grounds permitted 25 under this chapter. 26 c. The division shall establish an audit process to review a percent- 27 age, as established by the division, of housing accommodations that 28 register adjusted legal regulated rents under the local regulated hous- 29 ing restoration adjustment. The division's established audit process 30 shall be subject to the following requirements: 31 (1) any audit shall be limited to: (i) confirmation that documentation 32 set forth in subdivision a of this section has been submitted; (ii) 33 visual inspection of the subject unit; and (iii) review of the unit's 34 registered rent in comparison to the legal regulated rents of substan- 35 tially similar housing accommodations in the same geographic area 36 considering the same factors set forth in section 26-513.1 of this chap- 37 ter, including the owner's right to submit the legal regulated rent of a 38 substantially similar unit or units. Such audit shall be initiated with- 39 in one year of the filing of an annual apartment registration indicating 40 an adjustment to the legal regulated rent under the local regulated 41 housing restoration adjustment. 42 (2) if an audit under this subdivision determines that an owner has 43 failed to submit documentation set forth in subdivision a of this 44 section and the owner then fails to submit any missing documentation 45 after sixty days' written notice from the division, the division may 46 then set the subject unit's legal regulated rent based upon an evalu- 47 ation of documentation provided but in no event shall the legal regu- 48 lated rent be set at an amount less than HUD fair market value for the 49 statistical metropolitan area or the small area fair market rent as 50 determined by the local housing authority provided that applicable hous- 51 ing quality standards have been confirmed by inspection as set forth in 52 this section. 53 (3) if an audit under this subdivision determines that the owner 54 submitted documentation set forth in subdivision a of this section but 55 that the registered rent exceeds the level permitted under section 56 26-513.1 of this chapter, the division may set the legal regulated rentA. 6772 3 1 at the greater of the legal regulated rent for a substantially similar 2 housing accommodation in the same geographic area or the HUD fair market 3 value for the statistical metropolitan area or the small area fair 4 market rent as determined by the local housing authority. Any required 5 refunds shall be made in accordance with section 26-513.1 of this chap- 6 ter. 7 d. Access to the documentation submitted as part of the local regu- 8 lated housing restoration adjustment shall be governed by the same laws 9 governing access to building and apartment registrations filed with the 10 division. 11 § 3. The administrative code of the city of New York is amended by 12 adding a new section 26-513.1 to read as follows: 13 § 26-513.1 Application for adjustment of local regulated housing 14 restoration adjustment. a. The tenant of a housing accommodation that 15 was vacant on, or became vacant after, June 14, 2019, and has been 16 subject to the local regulated housing restoration adjustment, may file 17 with the commissioner of housing and community renewal within 120 days 18 after notice has been received under subdivision c of this section an 19 application for the adjustment of the rent for such housing accommo- 20 dation. Such applications shall be subject to the following: 21 (1) in the application, the tenant must allege that the local regu- 22 lated housing restoration adjustment rent exceeds the rent for substan- 23 tially similar units within the same geographic area. 24 (2) in determining an application filed pursuant to this section, the 25 commissioner shall only consider legal regulated rents for substantially 26 similar housing accommodations within a one-mile radius of the subject 27 unit in the same borough or applicable municipal subdivision. Substan- 28 tially similar housing accommodations are those rent-stabilized units 29 with similar room counts and square footage, similar levels of code 30 compliance, including state laws, local laws and codes for health, safe- 31 ty, and environmental sustainability, similar regulatory status, similar 32 apartment conditions and quality of fixtures and finishes, similar unit 33 and building amenities, similar quality and condition of the building 34 and common areas, and with vacancy or renewal leases starting within 35 twelve months from the start date of the complaining tenant's vacancy 36 lease. For purposes of considering legal regulated rents of similar 37 housing accommodations, the geographic area may be expanded by incre- 38 ments of one-quarter mile radii as many times as necessary to find a 39 substantially similar housing accommodation located in the same borough 40 or applicable municipal subdivision. Notwithstanding the foregoing, any 41 local regulated housing restoration adjustment rent amount that does not 42 exceed the HUD fair market value for the statistical metropolitan area 43 or the small area fair market rent as determined by the local housing 44 authority shall be determined to be fair. 45 (3) the owner of the housing accommodation subject to an application 46 under this section shall be given an opportunity to submit proof of 47 legal regulated rents for up to three substantially similar housing 48 accommodations, in addition to any already submitted as part of the 49 notification procedure under section 26-511.2 of this chapter. 50 (4) when the local regulated housing restoration adjustment rent 51 amount is determined to exceed the legal regulated rent for a substan- 52 tially similar housing accommodation as defined by this section, the 53 commissioner of housing and community renewal shall order that the legal 54 regulated rent for the subject unit shall be the greater of the legal 55 regulated rent for a substantially similar housing accommodation in the 56 same geographic area or the HUD fair market value for the statisticalA. 6772 4 1 metropolitan area or the small area fair market rent as determined by 2 the local housing authority. Any required refunds shall be made by the 3 owner in cash or as a credit against unpaid rent over a period not to 4 exceed of six months. 5 b. Notwithstanding subdivision a of this section, provided that the 6 owner has submitted to the division documentation in accordance with 7 subdivision a of section 26-511.2 of this chapter, the division shall 8 only determine whether the rent charged to the first tenant after the 9 local regulated housing restoration adjustment is supported by the rent 10 for a substantially similar unit. Any documentation deficiencies shall 11 be resolved through the audit process set forth in section 26-511.2 of 12 this chapter. 13 c. In the lease execution package for the first lease after the legal 14 rent was adjusted under the local regulated housing restoration adjust- 15 ment, the owner shall give notice, both in the lease and subsequently in 16 writing by certified mail, or by electronic delivery if the tenant has 17 opted to receive electronic delivery of documents, to the tenant of such 18 housing accommodation on a form prescribed by the commissioner of hous- 19 ing and community renewal that the local regulated housing restoration 20 adjustment was applied, including notification of the prior legal regu- 21 lated rent, a description of work completed, the building address and 22 legal regulated rent amounts for at least one and up to three substan- 23 tially similar units, and such tenant's right to file an application 24 challenging the new legal regulated rent of such housing accommodation. 25 § 4. Paragraph 5 of subdivision d of section 6 of section 4 of chapter 26 576 of the laws of 1974, constituting the emergency tenant protection 27 act of nineteen seventy-four, as amended by chapter 102 of the laws of 28 1984, is amended and a new paragraph 6 is added to read as follows: 29 (5) as an alternative to the hardship application provided under para- 30 graph four of this subdivision, owners of buildings acquired by the same 31 owner or a related entity owned by the same principals three years prior 32 to the date of application may apply to the division for increases in 33 excess of the level of applicable guideline increases established under 34 this law based on a finding by the commissioner that such guideline 35 increases are not sufficient to enable the owner to maintain an annual 36 gross rent income for such building which exceeds the annual operating 37 expenses of such building by a sum equal to at least five percent of 38 such gross rent. For the purposes of this paragraph, operating expenses 39 shall consist of the actual, reasonable, costs of fuel, labor, utili- 40 ties, taxes, other than income or corporate franchise taxes, fees, 41 permits, necessary contracted services and non-capital repairs, insur- 42 ance, parts and supplies, management fees and other administrative costs 43 and mortgage interest. For the purposes of this paragraph, mortgage 44 interest shall be deemed to mean interest on a bona fide mortgage 45 including an allocable portion of charges related thereto. Criteria to 46 be considered in determining a bona fide mortgage other than an institu- 47 tional mortgage shall include; condition of the property, location of 48 the property, the existing mortgage market at the time the mortgage is 49 placed, the term of the mortgage, the amortization rate, the principal 50 amount of the mortgage, security and other terms and conditions of the 51 mortgage. The commissioner shall set a rental value for any unit occu- 52 pied by the owner or a person related to the owner or unoccupied at the 53 owner's choice for more than one month at the last regulated rent plus 54 the minimum number of guidelines increases or, if no such regulated rent 55 existed or is known, the commissioner shall impute a rent consistent 56 with other rents in the building. The amount of hardship increase shallA. 6772 5 1 be such as may be required to maintain the annual gross rent income as 2 provided by this paragraph. The division shall not grant a hardship 3 application under this paragraph or paragraph four of this subdivision 4 for a period of three years subsequent to granting a hardship applica- 5 tion under the provisions of this paragraph. The collection of any 6 increase in the rent for any housing accommodation pursuant to this 7 paragraph shall not exceed six percent in any year from the effective 8 date of the order granting the increase over the rent set forth in the 9 schedule of gross rents, with collectability of any dollar excess above 10 said sum to be spread forward in similar increments and added to the 11 rent as established or set in future years. No application shall be 12 approved unless the owner's equity in such building exceeds five percent 13 of: (i) the arms length purchase price of the property; (ii) the cost of 14 any capital improvements for which the owner has not collected a 15 surcharge; (iii) any repayment of principal of any mortgage or loan used 16 to finance the purchase of the property or any capital improvements for 17 which the owner has not collected a surcharge; and (iv) any increase in 18 the equalized assessed value of the property which occurred subsequent 19 to the first valuation of the property after purchase by the owner. For 20 the purposes of this paragraph, owner's equity shall mean the sum of (i) 21 the purchase price of the property less the principal of any mortgage or 22 loan used to finance the purchase of the property, (ii) the cost of any 23 capital improvement for which the owner has not collected a surcharge 24 less the principal of any mortgage or loan used to finance said improve- 25 ment, (iii) any repayment of the principal of any mortgage or loan used 26 to finance the purchase of the property or any capital improvement for 27 which the owner has not collected a surcharge, and (iv) any increase in 28 the equalized assessed value of the property which occurred subsequent 29 to the first valuation of the property after purchase by the owner[.]; 30 or 31 (6) provides that, notwithstanding any other provision of this chapter 32 to the contrary, when a housing accommodation subject to this chapter 33 has been vacated after continuous tenancy or occupancy of ten years or 34 more prior to vacancy, and the owner has submitted documentation to the 35 division demonstrating restoration of the unit as set forth in subdivi- 36 sion (a-1) of section ten of this chapter, the new legal regulated rent 37 shall be the rent agreed to by the owner and first tenant after such 38 restoration and reserved in a lease or other rental agreement; provided 39 that such new legal regulated rent may be adjusted on audit by the divi- 40 sion under subdivision (a-1) of section ten of this section, or on 41 application of a tenant under subdivision d-1 of section nine of this 42 chapter. The legal regulated rent adjustment set forth in this paragraph 43 shall be known as the local regulated housing restoration adjustment. 44 § 5. Section 10 of section 4 of chapter 576 of the laws of 1974, 45 constituting the emergency tenant protection act of nineteen seventy- 46 four is amended by adding a new subdivision (a-1) to read as follows: 47 (a-1) the division of housing and community renewal shall establish a 48 notification procedure and documentation submission guidelines for the 49 local regulated housing restoration adjustment. a. Documentation to 50 qualify for the local regulated housing restoration adjustment shall be 51 limited to: 52 (1) XRF test results demonstrating a lead-free housing accommodation 53 under applicable local definitions; 54 (2) any required tenant protection plans or similar submission in 55 connection with such restoration; 56 (3) any required contractor licenses;A. 6772 6 1 (4) list and specifications of new electric appliances installed; 2 (5) before and after photos; 3 (6) lease or rental agreement listing new legal regulated rent; and 4 (7) legal regulated rent amount or amounts for substantially similar 5 unit or units as defined by section 26-513.1 of the administrative code 6 of the city of New York. 7 b. The local regulated housing restoration adjustment shall not be 8 permitted: 9 (1) for units that are rented within a twenty-four-month period after 10 an arm's length transfer of ownership; 11 (2) for units that are rented within a thirty-six-month period after 12 determination by the division that the owner has engaged in unlawful 13 harassment with respect to the unit; or 14 (3) after an eviction, unless the eviction was pursuant to order, 15 judgment, or other decree by court or governmental or legal authority 16 for reasons including nonpayment of rent, expiration or termination of 17 the lease term or license or other occupancy right, violation of a 18 substantial obligation of the tenancy, or any other grounds permitted 19 under this chapter. 20 c. The division of housing and community renewal shall establish an 21 audit process to review a percentage, as established by the division, of 22 housing accommodations that register adjusted legal regulated rents 23 under the local regulated housing restoration adjustment. The divi- 24 sion's established audit process shall be subject to the following 25 requirements: 26 (1) any audit shall be limited subdivision to: (i) confirmation that 27 documentation set forth in paragraph a of this subdivision has been 28 submitted, (ii) visual inspection of the subject unit, and (iii) review 29 of the unit's registered rent in comparison to the legal regulated rents 30 of substantially similar housing accommodations in the same geographic 31 area considering the same factors set forth in subdivision d-1 of 32 section nine of this chapter, including the owner's right to submit the 33 legal regulated rent of a substantially similar unit or units. Such 34 audit shall be initiated within one year of the filing of an annual 35 apartment registration indicating an adjustment to the legal regulated 36 rent under the local regulated housing restoration adjustment; 37 (2) if an audit under this subdivision determines that an owner has 38 failed to submit documentation set forth in paragraph a of this subdivi- 39 sion and the owner then fails to submit any missing documentation after 40 sixty days' written notice from the division, the division may then set 41 the subject unit's legal regulated rent based upon an evaluation of 42 documentation provided but in no event shall the legal regulated rent be 43 set at an amount less than HUD fair market value for the statistical 44 metropolitan area or the small area fair market rent as determined by 45 the local housing authority provided that applicable housing quality 46 standards have been confirmed by inspection as set forth above; 47 (3) if an audit under this subdivision determines that the owner 48 submitted documentation set forth in paragraph a of this subdivision but 49 that the registered rent exceeds the legal regulated rent of a substan- 50 tially similar housing accommodation in the same geographic area, then 51 the division may set the legal regulated rent at the greater of the 52 legal regulated rent for a substantially similar housing accommodation 53 in the same geographic area or the HUD fair market value for the statis- 54 tical metropolitan area or the small area fair market rent as determined 55 by the local housing authority. Any required refunds shall be made in 56 accordance with subdivision d-1 of section nine of this chapter; andA. 6772 7 1 d. Access to the documentation submitted as part of the local regu- 2 lated housing restoration adjustment shall be governed by the same laws 3 governing access to building and apartment registrations filed with the 4 division. 5 § 6. Section 9 of section 4 of chapter 576 of the laws of 1974, 6 constituting the emergency tenant protection act of nineteen seventy- 7 four is amended by adding a new subdivision d-1 to read as follows: 8 d-1. (1) The tenant of a housing accommodation that was vacant on, or 9 became vacant after, June 14, 2019, and has been subject to the local 10 regulated housing restoration adjustment, may file with the commissioner 11 within 120 days after notice has been received under paragraph three of 12 this subdivision an application for the adjustment of the rent for such 13 housing accommodation. Such applications shall be subject to the 14 following: 15 (i) in the application, the tenant must allege that the local regu- 16 lated housing restoration adjustment rent exceeds the rent for a 17 substantially similar unit within the same geographic area; 18 (ii) in determining an application filed pursuant to this section, the 19 commissioner of housing and community renewal shall only consider legal 20 regulated rents for substantially similar regulated housing accommo- 21 dations within a one-mile radius of the subject unit in the same borough 22 or applicable municipal subdivision. Substantially similar housing 23 accommodations are those rent-stabilized units with similar room counts 24 and square footage, similar levels of code compliance, including state 25 laws, local laws and codes for health, safety, and environmental 26 sustainability, similar regulatory status, similar apartment conditions 27 and quality of fixtures and finishes, similar unit and building amen- 28 ities, similar quality and condition of the building and common areas, 29 and with vacancy or renewal leases starting within twelve months from 30 the start date of the complaining tenant's vacancy lease. For purposes 31 of considering legal regulated rents of similar housing accommodations, 32 the geographic area may be expanded by increments of one-quarter mile 33 radii as many times as necessary to find a substantially similar housing 34 accommodation located in the same borough or applicable municipal subdi- 35 vision. Notwithstanding the foregoing, any local regulated housing 36 restoration adjustment rent amount that does not exceed the HUD fair 37 market value for the statistical metropolitan area or the small area 38 fair market rent as determined by the local housing authority shall be 39 presumed to be fair; 40 (iii) the owner of the housing accommodation subject to an application 41 under this section shall be given an opportunity to submit proof of 42 legal regulated rents for up to three substantially similar housing 43 accommodations, in addition to any already submitted as part of the 44 notification procedure under paragraph three of this subdivision; and 45 (iv) when the local regulated housing restoration adjustment rent 46 amount is determined to exceed the legal regulated rent for a substan- 47 tially similar housing accommodation as defined by this section, the 48 commissioner of housing and community renewal shall order that the legal 49 regulated rent for the subject unit shall be the greater of the legal 50 regulated rent for a substantially similar housing accommodation in the 51 same geographic area or the HUD fair market value for the statistical 52 metropolitan area or the small area fair market rent as determined by 53 the local housing authority. Any required refunds shall be made by the 54 owner in cash or as a credit against unpaid rent over a period not to 55 exceed of six months.A. 6772 8 1 (2) Notwithstanding paragraph a of this subdivision, provided that the 2 owner has submitted to the division documentation in accordance with 3 subdivision (a-1) of section ten of this chapter, the division shall 4 only determine whether the rent charged to the first tenant after the 5 local regulated housing restoration adjustment is supported by a compa- 6 rable legal regulated rent for a substantially similar regulated unit. 7 Any documentation deficiencies shall be resolved through the audit proc- 8 ess set forth in subdivision (a-1) of section ten of this chapter. 9 (3) In the lease execution package for the first lease after the legal 10 rent was adjusted under the local regulated housing restoration adjust- 11 ment, the owner shall give notice, both in the lease and subsequently in 12 writing by certified mail, or by electronic delivery if the tenant has 13 opted to receive electronic delivery of documents, to the tenant of such 14 housing accommodation on a form prescribed by the commissioner of hous- 15 ing and community renewal that the local regulated housing restoration 16 adjustment was applied, including notification of the prior legal regu- 17 lated rent, a description of work completed, the building address and 18 legal regulated rent amounts for at least one and up to three substan- 19 tially similar units, and such tenant's right to file an application for 20 adjustment of the new legal regulated rent of such housing accommo- 21 dation. 22 § 7. This act shall take effect immediately; and provided that the 23 amendments to chapter 4 of title 26 of the administrative code of the 24 city of New York made by sections one, two and three of this act shall 25 expire on the same date as such law expires and shall not affect the 26 expiration of such law as provided under section 26-520 of such law.
