Bill Text: NY A06772 | 2023-2024 | General Assembly | Amended
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-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6772--A 2023-2024 Regular Sessions IN ASSEMBLY May 8, 2023 ___________ Introduced by M. of A. BURGOS, GIBBS, HYNDMAN, BENEDETTO, ZEBROWSKI, SLATER, ZACCARO -- read once and referred to the Committee on Housing -- recommitted to the Committee on Housing in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 16 to read 3 as follows: 4 (16) 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 can demonstrate restoration of 8 the unit as set forth in section 26-511.2 of this chapter, the new legal 9 regulated rent shall be the rent agreed to by the owner and first tenant 10 after such restoration and reserved in a lease or other rental agree- 11 ment; provided that such new legal regulated rent: (i) shall not exceed 12 the section 8 voucher payment standard adopted by a local public housing 13 agency for a unit of the same size and located within the same zip code 14 that was in effect at the time the lease was executed; and (ii) may be 15 adjusted on audit by the division under section 26-511.2 of this chap- 16 ter, or on application of a tenant or owner under section 26-513.1 of 17 this chapter. The legal regulated rent adjustment set forth in this 18 paragraph shall be known as the local regulated housing restoration 19 adjustment. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10320-18-4A. 6772--A 2 1 § 2. The administrative code of the city of New York is amended by 2 adding a new section 26-511.2 to read as follows: 3 § 26-511.2 The local regulated housing restoration adjustment. a. The 4 division of housing and community renewal, the "division" shall estab- 5 lish a notification procedure and documentation submission guidelines 6 for the local regulated housing restoration adjustment. Documentation 7 to qualify for the local regulated housing restoration adjustment shall 8 be limited to: 9 (1) XRF test results or other documentation demonstrating a lead-free 10 housing accommodation under applicable local definitions; 11 (2) any required tenant protection plans or similar submissions to the 12 local building department in connection with such restoration; 13 (3) any required contractor licenses or certifications; 14 (4) list and specifications of new electric appliances installed; 15 (5) before and after photos; 16 (6) lease or rental agreement listing new legal regulated rent; 17 (7) evidence of renting to a housing subsidy voucher holder, or the 18 section 8 voucher payment standard adopted by a local public housing 19 agency for a unit of the same size and located within the same zip code 20 that was in effect at the time the lease was executed; 21 (8) evidence of renting to a housing subsidy voucher holder, or 22 documentation confirming that, as of the date of the commencement of the 23 incoming tenant's lease, any physical condition within the unit that was 24 the basis for a previously issued violation has been corrected; and 25 (9) for units vacated after the effective date of this section, a form 26 to be promulgated by the division and signed by the previous tenant 27 affirming that the vacatur prior to the local regulated housing restora- 28 tion adjustment was voluntary and not the result of unlawful owner 29 harassment. In considering the sufficiency of alternate documentation, 30 and notwithstanding other potentially sufficient documentation, vacatur 31 shall be presumed voluntary and not the result of owner harassment when 32 (i) the owner recovered possession of the unit through judicial 33 proceedings, (ii) the owner demonstrates abandonment of the unit through 34 electronic communications, recordings, or other evidence of voluntary 35 vacatur, or (iii) the owner demonstrates the previous tenant died and 36 the unit was not occupied by a lawful successor. 37 b. The local regulated housing restoration adjustment shall not be 38 permitted: 39 (1) for units that are rented within a twenty-four-month period after 40 an arm's length transfer of ownership; 41 (2) for units that are rented within a thirty-six-month period after 42 determination by the division that the owner has engaged in unlawful 43 harassment with respect to the unit; 44 (3) for units in buildings subject to housing preservation and devel- 45 opment's alternative enforcement program; or 46 (4) after an unlawful eviction. 47 c. The division shall establish an audit process to review a percent- 48 age, as established by the division, of housing accommodations that 49 register adjusted legal regulated rents under the local regulated hous- 50 ing restoration adjustment. The division's established audit process 51 shall be subject to the following requirements: 52 (1) any audit shall be limited to: (i) confirmation that documentation 53 set forth in subdivision a of this section has been submitted; and (ii) 54 unless rented to a housing subsidy voucher holder, confirmation that the 55 unit's agreed rent does not exceed the section 8 voucher payment stand- 56 ard adopted by a local public housing agency for a unit of the same sizeA. 6772--A 3 1 and located within the same zip code that was in effect at the time the 2 lease was executed. Such audit shall be initiated within one year of 3 the filing of an annual apartment registration indicating an adjustment 4 to the legal regulated rent under the local regulated housing restora- 5 tion adjustment; and 6 (2) if an audit under this subdivision determines that (i) an owner 7 has failed to submit documentation set forth in subdivision a of this 8 section and the owner then fails to submit any missing documentation 9 after sixty days' written notice from the division, or (ii) the local 10 housing restoration adjustment exceeds the section 8 voucher payment 11 standard adopted by a local public housing agency for a unit of the same 12 size and located within the same zip code that was in effect at the time 13 the lease was executed, the division shall set the subject unit's legal 14 regulated rent at an amount equal to seventy-five percent of the section 15 8 voucher payment standard adopted by a local public housing agency for 16 a unit of the same size and located within the same zip code that was in 17 effect at the time the lease was executed, except that the legal regu- 18 lated rents for units subject to housing subsidy vouchers shall be 19 established at the contract rent amount approved by the agency adminis- 20 tering the voucher. 21 (3) Any required refunds shall be made in accordance with section 22 26-513.1 of this chapter. 23 d. To encourage rental of units subject to a local housing restoration 24 adjustment to individuals and families with housing subsidy vouchers or 25 that are in communities of need, the division shall establish incen- 26 tives, in addition to those already contained in this section, for hous- 27 ing providers who rent to housing subsidy voucher holders located in 28 very low- and low-income zip codes. 29 e. Access to the documentation submitted as part of the local regu- 30 lated housing restoration adjustment shall be governed by the same laws 31 governing access to building and apartment registrations filed with the 32 division. 33 § 3. The administrative code of the city of New York is amended by 34 adding a new section 26-513.1 to read as follows: 35 § 26-513.1 Application for adjustment of local regulated housing 36 restoration adjustment. a. The tenant of a housing accommodation that 37 was vacant on, or became vacant after, June 14, 2019, and has been 38 subject to the local regulated housing restoration adjustment, may file 39 with the commissioner of housing and community renewal within 120 days 40 after notice has been received under subdivision c of this section an 41 application for the adjustment of the rent for such housing accommo- 42 dation. Such applications shall be subject to the following: 43 (1) in the application, the tenant must allege that the local regu- 44 lated housing restoration adjustment rent exceeds the section 8 voucher 45 payment standard adopted by a local public housing agency for a unit of 46 the same size and located within the same zip code that was in effect at 47 the time the lease was executed. 48 (2) in determining an application filed pursuant to this section, the 49 commissioner shall only consider whether the subject rent exceeds the 50 section 8 voucher payment standard adopted by a local public housing 51 agency for a unit of the same size and located within the same zip code 52 that was in effect at the time the lease was executed. 53 (3) the owner of the housing accommodation subject to an application 54 under this section shall be given an opportunity to submit a written 55 answer to any application.A. 6772--A 4 1 (4) when the local regulated housing restoration adjustment rent 2 amount is determined to exceed the section 8 voucher payment standard 3 adopted by a local public housing agency for a unit of the same size and 4 located within the same zip code that was in effect at the time the 5 lease was executed, the commissioner of housing and community renewal 6 shall order that the legal regulated rent for the subject unit shall be 7 equal to seventy-five percent of the section 8 voucher payment standard 8 adopted by a local public housing agency for a unit of the same size and 9 located within the same zip code that was in effect at the time the 10 lease was executed; except that the legal regulated rents for units 11 subject to housing subsidy vouchers shall be equal to the contract rent 12 amount approved by the local housing authority that issues the voucher. 13 Any required refunds shall be made by the owner in cash or as a credit 14 against unpaid rent over a period not to exceed six months. 15 b. Notwithstanding subdivision a of this section, provided that the 16 owner has submitted to the division documentation in accordance with 17 subdivision a of section 26-511.2 of this chapter, the division shall 18 only determine whether the tenancy is subject to a housing subsidy 19 voucher and, if not, whether the rent charged to the first tenant after 20 the local regulated housing restoration adjustment exceeds the section 8 21 voucher payment standard adopted by a local public housing agency for a 22 unit of the same size located within the same zip code that was in 23 effect at the time the lease was executed. Any documentation deficien- 24 cies shall be resolved through the audit process set forth in section 25 26-511.2 of this chapter. 26 c. In the lease execution package for the first lease after the legal 27 rent was adjusted under the local regulated housing restoration adjust- 28 ment, the owner shall give notice, both in the lease and subsequently in 29 writing by certified mail, or by electronic delivery if the tenant has 30 opted to receive electronic delivery of documents, to the tenant of such 31 housing accommodation on a form prescribed by the commissioner of hous- 32 ing and community renewal that the local regulated housing restoration 33 adjustment was applied, including notification of the prior legal regu- 34 lated rent, a description of work completed, the building address and 35 the section 8 voucher payment standard adopted by a local public housing 36 agency for a unit of the same size and located within the same zip code 37 that was in effect at the time the lease was executed, and such tenant's 38 right to file an application challenging the new legal regulated rent of 39 such housing accommodation. 40 § 4. Paragraph 5 of subdivision d of section 6 of section 4 of chapter 41 576 of the laws of 1974, constituting the emergency tenant protection 42 act of nineteen seventy-four, as amended by chapter 102 of the laws of 43 1984, is amended and a new paragraph 6 is added to read as follows: 44 (5) as an alternative to the hardship application provided under para- 45 graph four of this subdivision, owners of buildings acquired by the same 46 owner or a related entity owned by the same principals three years prior 47 to the date of application may apply to the division for increases in 48 excess of the level of applicable guideline increases established under 49 this law based on a finding by the commissioner that such guideline 50 increases are not sufficient to enable the owner to maintain an annual 51 gross rent income for such building which exceeds the annual operating 52 expenses of such building by a sum equal to at least five percent of 53 such gross rent. For the purposes of this paragraph, operating expenses 54 shall consist of the actual, reasonable, costs of fuel, labor, utili- 55 ties, taxes, other than income or corporate franchise taxes, fees, 56 permits, necessary contracted services and non-capital repairs, insur-A. 6772--A 5 1 ance, parts and supplies, management fees and other administrative costs 2 and mortgage interest. For the purposes of this paragraph, mortgage 3 interest shall be deemed to mean interest on a bona fide mortgage 4 including an allocable portion of charges related thereto. Criteria to 5 be considered in determining a bona fide mortgage other than an institu- 6 tional mortgage shall include; condition of the property, location of 7 the property, the existing mortgage market at the time the mortgage is 8 placed, the term of the mortgage, the amortization rate, the principal 9 amount of the mortgage, security and other terms and conditions of the 10 mortgage. The commissioner shall set a rental value for any unit occu- 11 pied by the owner or a person related to the owner or unoccupied at the 12 owner's choice for more than one month at the last regulated rent plus 13 the minimum number of guidelines increases or, if no such regulated rent 14 existed or is known, the commissioner shall impute a rent consistent 15 with other rents in the building. The amount of hardship increase shall 16 be such as may be required to maintain the annual gross rent income as 17 provided by this paragraph. The division shall not grant a hardship 18 application under this paragraph or paragraph four of this subdivision 19 for a period of three years subsequent to granting a hardship applica- 20 tion under the provisions of this paragraph. The collection of any 21 increase in the rent for any housing accommodation pursuant to this 22 paragraph shall not exceed six percent in any year from the effective 23 date of the order granting the increase over the rent set forth in the 24 schedule of gross rents, with collectability of any dollar excess above 25 said sum to be spread forward in similar increments and added to the 26 rent as established or set in future years. No application shall be 27 approved unless the owner's equity in such building exceeds five percent 28 of: (i) the arms length purchase price of the property; (ii) the cost of 29 any capital improvements for which the owner has not collected a 30 surcharge; (iii) any repayment of principal of any mortgage or loan used 31 to finance the purchase of the property or any capital improvements for 32 which the owner has not collected a surcharge; and (iv) any increase in 33 the equalized assessed value of the property which occurred subsequent 34 to the first valuation of the property after purchase by the owner. For 35 the purposes of this paragraph, owner's equity shall mean the sum of (i) 36 the purchase price of the property less the principal of any mortgage or 37 loan used to finance the purchase of the property, (ii) the cost of any 38 capital improvement for which the owner has not collected a surcharge 39 less the principal of any mortgage or loan used to finance said improve- 40 ment, (iii) any repayment of the principal of any mortgage or loan used 41 to finance the purchase of the property or any capital improvement for 42 which the owner has not collected a surcharge, and (iv) any increase in 43 the equalized assessed value of the property which occurred subsequent 44 to the first valuation of the property after purchase by the owner[.]; 45 or 46 (6) provides that, notwithstanding any other provision of this chapter 47 to the contrary, when a housing accommodation subject to this chapter 48 has been vacated after continuous tenancy or occupancy of ten years or 49 more prior to vacancy, and the owner can demonstrate restoration of the 50 unit as set forth in subdivision (a-1) of section ten of this chapter, 51 the new legal regulated rent shall be the rent agreed to by the owner 52 and first tenant after such restoration and reserved in a lease or other 53 rental agreement; provided that such new legal regulated rent: (i) 54 shall not exceed the section 8 voucher payment standard adopted by a 55 local public housing agency for a unit of the same size and located 56 within the same zip code that was in effect at the time the lease wasA. 6772--A 6 1 executed; and (ii) may be adjusted on audit by the division under subdi- 2 vision (a-1) of section ten of this chapter, or on application of a 3 tenant or owner under subdivision d-1 of section nine of this chapter. 4 The legal regulated rent adjustment set forth in this paragraph shall be 5 known as the local regulated housing restoration adjustment. 6 § 5. Section 10 of section 4 of chapter 576 of the laws of 1974, 7 constituting the emergency tenant protection act of nineteen seventy- 8 four is amended by adding a new subdivision (a-1) to read as follows: 9 (a-1) the division of housing and community renewal shall establish a 10 notification procedure and documentation submission guidelines for the 11 local regulated housing restoration adjustment. a. Documentation to 12 qualify for the local regulated housing restoration adjustment shall be 13 limited to: 14 (1) XRF test results or other documentation demonstrating a lead-free 15 housing accommodation under applicable local definitions; 16 (2) any required tenant protection plans or similar submissions to the 17 local building department in connection with such restoration; 18 (3) any required contractor licenses or certifications; 19 (4) list and specifications of new electric appliances installed; 20 (5) before and after photos; 21 (6) lease or rental agreement listing new legal regulated rent; 22 (7) evidence of renting to a housing subsidy voucher holder, or the 23 section 8 voucher payment standard adopted by a local public housing 24 agency for a unit of the same size and located within the same zip code 25 that was in effect at the time the lease was executed; 26 (8) evidence of renting to a housing subsidy voucher holder, or 27 documentation confirming that, as of the date of the commencement of the 28 incoming tenant's lease, any physical condition within the unit that was 29 the basis for a previously issued violation has been corrected; and 30 (9) for units vacated after the effective date of this subdivision, a 31 form to be promulgated by the division and signed by the previous tenant 32 affirming that the vacatur prior to the local regulated housing restora- 33 tion adjustment was voluntary and not the result of unlawful owner 34 harassment. In considering the sufficiency of alternate documentation, 35 and notwithstanding other potentially sufficient documentation, vacatur 36 shall be presumed voluntary and not the result of owner harassment when 37 (i) the owner recovered possession of the unit through judicial 38 proceedings, (ii) the owner demonstrates abandonment of the unit through 39 electronic communications, recordings, or other evidence of voluntary 40 vacatur, or (iii) the owner demonstrates the previous tenant died and 41 the unit was not occupied by a lawful successor. 42 b. The local regulated housing restoration adjustment shall not be 43 permitted: 44 (1) for units that are rented within a twenty-four-month period after 45 an arm's length transfer of ownership; 46 (2) for units that are rented within a thirty-six-month period after 47 determination by the division that the owner has engaged in unlawful 48 harassment with respect to the unit; 49 (3) for units in buildings subject to housing preservation and devel- 50 opment's alternative enforcement program; or 51 (4) after an unlawful eviction. 52 c. The division of housing and community renewal shall establish an 53 audit process to review a percentage, as established by the division, of 54 housing accommodations that register adjusted legal regulated rents 55 under the local regulated housing restoration adjustment. The divi-A. 6772--A 7 1 sion's established audit process shall be subject to the following 2 requirements: 3 (1) any audit shall be limited to: (i) confirmation that documentation 4 set forth in paragraph a of this subdivision has been submitted; and 5 (ii) unless rented to a housing subsidy voucher holder, confirmation 6 that the units agreed upon rent as reserved in a lease agreement does 7 not exceed the section 8 voucher payment standard adopted by a local 8 public housing agency for a unit of the same size and located within the 9 same zip code that was in effect at the time the lease was executed. 10 Such audit shall be initiated within one year of the filing of an annual 11 apartment registration indicating an adjustment to the legal regulated 12 rent under the local regulated housing restoration adjustment; and 13 (2) if an audit under this subdivision determines that: (i) an owner 14 has failed to submit documentation set forth in subdivision a of this 15 section and the owner then fails to submit any missing documentation 16 after sixty days' written notice from the division; or (ii) the local 17 housing restoration adjustment exceeds the section 8 voucher payment 18 standard adopted by a local public housing agency for a unit of the same 19 size and located within the same zip code that was in effect at the time 20 the lease was executed, the division shall set the subject unit's legal 21 regulated rent at an amount equal to seventy-five percent of the section 22 8 voucher payment standard adopted by a local public housing agency for 23 a unit of the same size and located within the same zip code that was in 24 effect at the time the lease was executed, provided, however, that the 25 legal regulated rents for units subject to housing subsidy vouchers 26 shall be established at the contract rent amount approved by the agency 27 administering the voucher. 28 (3) Any required refunds shall be made in accordance with section 29 26-513.1 of this chapter. 30 d. To encourage rental of units subject to a local housing restoration 31 adjustment to individuals and families with housing subsidy vouchers or 32 that are in communities of need, the division shall establish incen- 33 tives, in addition to those already contained in this section, for hous- 34 ing providers who rent to housing subsidy voucher holders located in 35 very low- and low-income zip codes. 36 e. Access to the documentation submitted as part of the local regu- 37 lated housing restoration adjustment shall be governed by the same laws 38 governing access to building and apartment registrations filed with the 39 division. 40 § 6. Section 9 of section 4 of chapter 576 of the laws of 1974, 41 constituting the emergency tenant protection act of nineteen seventy- 42 four is amended by adding a new subdivision d-1 to read as follows: 43 d-1. (1) The tenant of a housing accommodation that was vacant on, or 44 became vacant after, June 14, 2019, and has been subject to the local 45 regulated housing restoration adjustment, may file with the commissioner 46 within 120 days after notice has been received under paragraph three of 47 this subdivision an application for the adjustment of the rent for such 48 housing accommodation. Such applications shall be subject to the 49 following: 50 (i) in the application, the tenant must allege that the local regu- 51 lated housing restoration adjustment rent exceeds the section 8 voucher 52 payment standard adopted by a local public housing agency for a unit of 53 the same size and located within the same zip code that was in effect at 54 the time the lease was executed; 55 (ii) in determining an application filed pursuant to this section, the 56 commissioner of housing and community renewal shall only consider wheth-A. 6772--A 8 1 er the subject rent exceeds the section 8 voucher payment standard 2 adopted by a local public housing agency for a unit of the same size and 3 located within the same zip code that was in effect at the time the 4 lease was executed; 5 (iii) the owner of the housing accommodation subject to an application 6 under this section shall be given an opportunity to submit a written 7 answer to any application; and 8 (iv) when the local regulated housing restoration adjustment rent 9 amount is determined to exceed the section 8 voucher payment standard 10 adopted by a local public housing agency for a unit of the same size and 11 located within the same zip code that was in effect at the time the 12 lease was executed, the commissioner of housing and community renewal 13 shall order that the legal regulated rent for the subject unit shall be 14 equal to seventy-five percent of the section 8 voucher payment standard 15 adopted by a local public housing agency for a unit of the same size and 16 located within the same zip code that was in effect at the time the 17 lease was executed; provided, however, that the legal regulated rents 18 for units subject to housing subsidy vouchers shall be equal to the 19 contract rent amounts approved by the local housing agency administering 20 the voucher. Any required refunds shall be made by the owner in cash or 21 as a credit against unpaid rent over a period not to exceed six months. 22 (2) Notwithstanding paragraph a of this subdivision, provided that the 23 owner has submitted to the division documentation in accordance with 24 subdivision (a-1) of section ten of this chapter, the division shall 25 only determine whether the tenancy is subject to a housing subsidy 26 voucher and, if not, whether the rent charged to the first tenant after 27 the local regulated housing restoration adjustment exceeds the section 8 28 voucher payment standard adopted by a local public housing agency for a 29 unit of the same size located within the same zip code that was in 30 effect at the time the lease was executed. Any documentation deficien- 31 cies shall be resolved through the audit process set forth in subdivi- 32 sion (a-1) of section ten of this chapter. 33 (3) In the lease execution package for the first lease after the legal 34 rent was adjusted under the local regulated housing restoration adjust- 35 ment, the owner shall give notice, both in the lease and subsequently in 36 writing by certified mail, or by electronic delivery if the tenant has 37 opted to receive electronic delivery of documents, to the tenant of such 38 housing accommodation on a form prescribed by the commissioner of hous- 39 ing and community renewal that the local regulated housing restoration 40 adjustment was applied, including notification of the prior legal regu- 41 lated rent, a description of work completed, the building address and 42 the section 8 voucher payment standard adopted by a local public housing 43 agency for a unit of the same size and located within the same zip code 44 that was in effect at the time the lease was executed, and such tenant's 45 right to file an application for adjustment of the new legal regulated 46 rent of such housing accommodation. 47 § 7. This act shall take effect immediately; and provided that the 48 amendments to chapter 4 of title 26 of the administrative code of the 49 city of New York made by sections one, two and three of this act shall 50 expire on the same date as such law expires and shall not affect the 51 expiration of such law as provided under section 26-520 of such law.
