Bill Text: NY S04217 | 2025-2026 | General Assembly | Introduced
Bill Title: Requires the state division of housing and community renewal to verify there are no class B or C housing code violations or no more than 30 class A housing code violations on the property prior to authorizing a rent increase for major capital improvements for such property; provides that outstanding violations shall be corrected by the landlord and verified by the city rent agency prior to authorization of a rent increase.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2025-02-03 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S04217 Detail]
Download: New_York-2025-S04217-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 4217 2025-2026 Regular Sessions IN SENATE February 3, 2025 ___________ Introduced by Sens. PARKER, SEPULVEDA -- 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 emer- gency housing rent control law, in relation to requiring the state division of housing and community renewal to verify there are no hous- ing code violations prior to authorizing a rent increase for major capital improvements The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 1 of subdivision g of section 26-405 of the 2 administrative code of the city of New York is amended by adding a new 3 subparagraph (p) to read as follows: 4 (p) Adjustments made pursuant to subparagraph (g) of this paragraph 5 shall be collectible upon the landlord's filing of a report with the 6 city rent agency, subject to the provisions of subparagraph (e) of para- 7 graph two of subdivision a of this section and verification by the city 8 rent agency, in collaboration with local authorities responsible for 9 inspecting buildings, that the applicant does not have more than thirty 10 class A housing code violations or a class B or C housing code violation 11 on the property. Outstanding housing code violations that are found 12 shall be cleared, corrected or abated by the landlord and verified by 13 the city rent agency prior to authorization of a rent increase under 14 subparagraph (g) of this paragraph. 15 § 2. Paragraph 6 of subdivision c of section 26-511 of the administra- 16 tive code of the city of New York, as separately amended by section 12 17 of part K of chapter 36 and section 28 of part Q of chapter 39 of the 18 laws of 2019, is amended to read as follows: 19 (6) provides criteria whereby the commissioner may act upon applica- 20 tions by owners for increases in excess of the level of fair rent EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07839-01-5S. 4217 2 1 increase established under this law provided, however, that such crite- 2 ria shall provide (a) as to hardship applications, for a finding that 3 the level of fair rent increase is not sufficient to enable the owner to 4 maintain approximately the same average annual net income (which shall 5 be computed without regard to debt service, financing costs or manage- 6 ment fees) for the three year period ending on or within six months of 7 the date of an application pursuant to such criteria as compared with 8 annual net income, which prevailed on the average over the period nine- 9 teen hundred sixty-eight through nineteen hundred seventy, or for the 10 first three years of operation if the building was completed since nine- 11 teen hundred sixty-eight or for the first three fiscal years after a 12 transfer of title to a new owner provided the new owner can establish to 13 the satisfaction of the commissioner that [he or she] such new owner 14 acquired title to the building as a result of a bona fide sale of the 15 entire building and that the new owner is unable to obtain requisite 16 records for the fiscal years nineteen hundred sixty-eight through nine- 17 teen hundred seventy despite diligent efforts to obtain same from prede- 18 cessors in title and further provided that the new owner can provide 19 financial data covering a minimum of six years under [his or her] their 20 continuous and uninterrupted operation of the building to meet the three 21 year to three year comparative test periods herein provided; and (b) as 22 to completed building-wide major capital improvements, for a finding 23 that such improvements are deemed depreciable under the Internal Revenue 24 Code and that the cost is to be amortized over a twelve-year period for 25 a building with thirty-five or fewer housing accommodations, or a twelve 26 and one-half-year period for a building with more than thirty-five hous- 27 ing accommodations, for any determination issued by the division of 28 housing and community renewal after the effective date of the the chap- 29 ter of the laws of two thousand nineteen that amended this paragraph and 30 shall be removed from the legal regulated rent thirty years from the 31 date the increase became effective inclusive of any increases granted by 32 the applicable rent guidelines board. Temporary major capital improve- 33 ment increases shall be collectible prospectively on the first day of 34 the first month beginning sixty days from the date of mailing notice of 35 approval to the tenant. Such notice shall disclose the total monthly 36 increase in rent and the first month in which the tenant would be 37 required to pay the temporary increase. An approval for a temporary 38 major capital improvement increase shall not include retroactive 39 payments. The collection of any increase shall not exceed two percent in 40 any year from the effective date of the order granting the increase over 41 the rent set forth in the schedule of gross rents, with collectability 42 of any dollar excess above said sum to be spread forward in similar 43 increments and added to the rent as established or set in future years. 44 Upon vacancy, the landlord may add any remaining balance of the tempo- 45 rary major capital improvement increase to the legal regulated rent. 46 Notwithstanding any other provision of the law, for any renewal lease 47 commencing on or after June 14, 2019, the collection of any rent 48 increases due to any major capital improvements approved on or after 49 June 16, 2012 and before June 16, 2019 shall not exceed two percent in 50 any year for any tenant in occupancy on the date the major capital 51 improvement was approved or based upon cash purchase price exclusive of 52 interest or service charges. The division of housing and community 53 renewal shall require the submission of a report by landlords applying 54 for a rent increase for major capital improvements pursuant to this 55 paragraph and subject to verification by the division of housing and 56 community renewal, in collaboration with local authorities responsibleS. 4217 3 1 for inspecting buildings, certifying that there are not more than thirty 2 class A housing code violations nor a class B or C housing code 3 violation on the property, prior to receiving approval for such rent 4 increase. Where an application for a temporary major capital improvement 5 increase has been filed, a tenant shall have sixty days from the date of 6 mailing of a notice of a proceeding in which to answer or reply. The 7 state division of housing and community renewal shall provide any 8 responding tenant with the reasons for the division's approval or denial 9 of such application. Notwithstanding anything to the contrary contained 10 herein, no hardship increase granted pursuant to this paragraph shall, 11 when added to the annual gross rents, as determined by the commissioner, 12 exceed the sum of, (i) the annual operating expenses, (ii) an allowance 13 for management services as determined by the commissioner, (iii) actual 14 annual mortgage debt service (interest and amortization) on its indebt- 15 edness to a lending institution, an insurance company, a retirement fund 16 or welfare fund which is operated under the supervision of the banking 17 or insurance laws of the state of New York or the United States, and 18 (iv) eight and one-half percent of that portion of the fair market value 19 of the property which exceeds the unpaid principal amount of the mort- 20 gage indebtedness referred to in subparagraph (iii) of this paragraph. 21 Fair market value for the purposes of this paragraph shall be six times 22 the annual gross rent. The collection of any increase in the stabilized 23 rent for any apartment pursuant to this paragraph shall not exceed six 24 percent in any year from the effective date of the order granting the 25 increase over the rent set forth in the schedule of gross rents, with 26 collectability of any dollar excess above said sum to be spread forward 27 in similar increments and added to the stabilized rent as established or 28 set in future years; 29 § 3. Subdivision d of section 6 of section 4 of chapter 576 of the 30 laws of 1974, constituting the emergency tenant protection act of nine- 31 teen seventy-four, is amended by adding a new paragraph 6 to read as 32 follows: 33 (6) adjustments made pursuant to paragraph (3) of this subdivision 34 shall be collectable upon the landlord's filing of a report with the 35 state division of housing and community renewal and subject to verifica- 36 tion by the state division of housing and community renewal, in collab- 37 oration with local authorities responsible for inspecting buildings, 38 that the applicant does not have more than thirty class A housing code 39 violations or a class B or C housing code violation on the property. 40 Outstanding housing code violations that are found shall be cleared, 41 corrected or abated by the landlord and verified by the state division 42 of housing and community renewal prior to authorization of a rent 43 increase under paragraph (3) of this subdivision. 44 § 4. The second undesignated paragraph of paragraph (a) of subdivision 45 4 of section 4 of chapter 274 of the laws of 1946, constituting the 46 emergency housing rent control law, as amended by section 25 of part B 47 of chapter 97 of the laws of 2011, subparagraph 5 as amended by section 48 7 of part FF of chapter 56 of the laws of 2024, subparagraph 7 as sepa- 49 rately amended by section 25 of part Q of chapter 39 and section 14 of 50 part K of chapter 36 and subparagraph 8 as amended by section 8 of part 51 K of chapter 36 of the laws of 2019, is amended to read as follows: 52 No application for adjustment of maximum rent based upon a sales price 53 valuation shall be filed by the landlord under this subparagraph prior 54 to six months from the date of such sale of the property. In addition, 55 no adjustment ordered by the commission based upon such sales price 56 valuation shall be effective prior to one year from the date of suchS. 4217 4 1 sale. Where, however, the assessed valuation of the land exceeds four 2 times the assessed valuation of the buildings thereon, the commission 3 may determine a valuation of the property equal to five times the equal- 4 ized assessed valuation of the buildings, for the purposes of this 5 subparagraph. The commission may make a determination that the valuation 6 of the property is an amount different from such equalized assessed 7 valuation where there is a request for a reduction in such assessed 8 valuation currently pending; or where there has been a reduction in the 9 assessed valuation for the year next preceding the effective date of the 10 current assessed valuation in effect at the time of the filing of the 11 application. Net annual return shall be the amount by which the earned 12 income exceeds the operating expenses of the property, excluding mort- 13 gage interest and amortization, and excluding allowances for obsoles- 14 cence and reserves, but including an allowance for depreciation of two 15 per centum of the value of the buildings exclusive of the land, or the 16 amount shown for depreciation of the buildings in the latest required 17 federal income tax return, whichever is lower; provided, however, that 18 (1) no allowance for depreciation of the buildings shall be included 19 where the buildings have been fully depreciated for federal income tax 20 purposes or on the books of the owner; or (2) the landlord who owns no 21 more than four rental units within the state has not been fully compen- 22 sated by increases in rental income sufficient to offset unavoidable 23 increases in property taxes, fuel, utilities, insurance and repairs and 24 maintenance, excluding mortgage interest and amortization, and excluding 25 allowances for depreciation, obsolescence and reserves, which have 26 occurred since the federal date determining the maximum rent or the date 27 the property was acquired by the present owner, whichever is later; or 28 (3) the landlord operates a hotel or rooming house or owns a cooperative 29 apartment and has not been fully compensated by increases in rental 30 income from the controlled housing accommodations sufficient to offset 31 unavoidable increases in property taxes and other costs as are allocable 32 to such controlled housing accommodations, including costs of operation 33 of such hotel or rooming house, but excluding mortgage interest and 34 amortization, and excluding allowances for depreciation, obsolescence 35 and reserves, which have occurred since the federal date determining the 36 maximum rent or the date the landlord commenced the operation of the 37 property, whichever is later; or (4) the landlord and tenant voluntarily 38 enter into a valid written lease in good faith with respect to any hous- 39 ing accommodation, which lease provides for an increase in the maximum 40 rent not in excess of fifteen per centum and for a term of not less than 41 two years, except that where such lease provides for an increase in 42 excess of fifteen per centum, the increase shall be automatically 43 reduced to fifteen per centum; or (5) the landlord and tenant by mutual 44 voluntary written informed agreement agree to a substantial increase or 45 decrease in dwelling space, furniture, furnishings or equipment provided 46 in the housing accommodations; provided that an owner shall be entitled 47 to a rent increase where there has been a substantial modification or 48 increase of dwelling space, or installation of new equipment or improve- 49 ments or new furniture or furnishings provided in or to a tenant's hous- 50 ing accommodation. The increase in the maximum rent for the affected 51 housing accommodation shall be one-one hundred sixty-eighth, in the case 52 of a building with thirty-five or fewer housing accommodations, or one- 53 one hundred eightieth, in the case of a building with more than thirty- 54 five housing accommodations where such increase takes effect on or after 55 the effective date of the chapter of the laws of two thousand nineteen 56 that amended this subparagraph, of the total actual cost incurred by theS. 4217 5 1 landlord up to thirty thousand dollars in providing such reasonable and 2 verifiable modification or increase in dwelling space, furniture, 3 furnishings, or equipment, including the cost of installation but 4 excluding finance charges and any costs that exceed reasonable costs 5 established by rules and regulations promulgated by the division of 6 housing and community renewal. Such rules and regulations shall include: 7 (i) requirements for work to be done by licensed contractors and a 8 prohibition on common ownership between the landlord and the contractor 9 or vendor; and (ii) a requirement that the owner resolve within the 10 dwelling space all outstanding hazardous or immediately hazardous 11 violations of the uniform fire prevention and building code (Uniform 12 Code), New York city fire code, or New York city building and housing 13 maintenance codes, if applicable. Provided further that an owner who is 14 entitled to a rent increase pursuant to this clause shall not be enti- 15 tled to a further rent increase based upon the installation of similar 16 equipment, or new furniture or furnishings within the useful life of 17 such new equipment, or new furniture or furnishings. Provided further 18 that the recoverable costs incurred by the landlord, pursuant to this 19 subparagraph, shall be limited to an aggregate cost of thirty thousand 20 dollars in a fifteen year period beginning with the first individual 21 apartment improvement on or after June fourteenth, two thousand nine- 22 teen. The owner shall give written notice to the commission of any such 23 adjustment pursuant to this clause; or (6) there has been, since March 24 first, nineteen hundred fifty, an increase in the rental value of the 25 housing accommodations as a result of a substantial rehabilitation of 26 the building or housing accommodation therein which materially adds to 27 the value of the property or appreciably prolongs its life, excluding 28 ordinary repairs, maintenance and replacements; or (7) there has been 29 since March first, nineteen hundred fifty, a major capital improvement 30 essential for the preservation, energy efficiency, functionality, or 31 infrastructure of the entire building, improvement of the structure 32 including heating, windows, plumbing and roofing, but shall not be for 33 operational costs or unnecessary cosmetic improvements; which for any 34 order of the commissioner issued after the effective date of the chapter 35 of the laws of two thousand nineteen that amended this paragraph the 36 cost of such improvement shall be amortized over a twelve-year period 37 for buildings with thirty-five or fewer units or a twelve and one-half 38 year period for buildings with more than thirty-five units, and shall be 39 removed from the legal regulated rent thirty years from the date the 40 increase became effective inclusive of any increases granted by the 41 applicable rent guidelines board. Temporary major capital improvement 42 increases shall be collectible prospectively on the first day of the 43 first month beginning sixty days from the date of mailing notice of 44 approval to the tenant. Such notice shall disclose the total monthly 45 increase in rent and the first month in which the tenant would be 46 required to pay the temporary increase. An approval for a temporary 47 major capital improvement increase shall not include retroactive 48 payments. The collection of any increase shall not exceed two percent in 49 any year from the effective date of the order granting the increase over 50 the rent set forth in the schedule of gross rents, with collectability 51 of any dollar excess above said sum to be spread forward in similar 52 increments and added to the rent as established or set in future years. 53 Upon vacancy, the landlord may add any remaining balance of the tempo- 54 rary major capital improvement increase to the legal regulated rent. 55 Notwithstanding any other provision of the law, for any renewal lease 56 commencing on or after June 14, 2019, the collection of any rentS. 4217 6 1 increases due to any major capital improvements approved on or after 2 June 16, 2012 and before June 16, 2019 shall not exceed two percent in 3 any year for any tenant in occupancy on the date the major capital 4 improvement was approved; provided, however, where an application for a 5 temporary major capital improvement increase has been filed, a tenant 6 shall have sixty days from the date of mailing of a notice of a proceed- 7 ing in which to answer or reply. The state division of housing and 8 community renewal shall provide any responding tenant with the reasons 9 for the division's approval or denial of such application; or (8) there 10 has been since March first, nineteen hundred fifty, in structures 11 containing more than four housing accommodations, other improvements 12 made with the express informed consent of the tenants in occupancy of at 13 least seventy-five per centum of the housing accommodations, provided, 14 however, that no adjustment granted hereunder shall exceed two per 15 centum unless the tenants have agreed to a higher percentage of 16 increase, as herein provided; or (9) there has been, since March first, 17 nineteen hundred fifty, a subletting without written consent from the 18 landlord or an increase in the number of adult occupants who are not 19 members of the immediate family of the tenant, and the landlord has not 20 been compensated therefor by adjustment of the maximum rent by lease or 21 order of the commission or pursuant to the federal act; or (10) the 22 presence of unique or peculiar circumstances materially affecting the 23 maximum rent has resulted in a maximum rent which is substantially lower 24 than the rents generally prevailing in the same area for substantially 25 similar housing accommodations. Adjustments made pursuant to subpara- 26 graph (7) of this paragraph shall be collectible upon the landlord's 27 filing of a report with the commission and subject to verification by 28 the commission, in collaboration with local authorities responsible for 29 inspecting buildings, that the applicant does not have more than thirty 30 class A housing code violations or a class B or C housing code violation 31 on the property. Outstanding housing code violations that are found 32 shall be cleared, corrected or abated by the landlord and verified by 33 the commission prior to authorization of a rent increase under subpara- 34 graph (7) of this paragraph. 35 § 5. This act shall take effect on the sixtieth day after it shall 36 have become a law; provided that: 37 (a) the amendments to section 26-405 of the city rent and rehabili- 38 tation law made by section one of this act shall remain in full force 39 and effect only as long as the public emergency requiring the regulation 40 and control of residential rents and evictions continues, as provided in 41 subdivision 3 of section 1 of the local emergency housing rent control 42 act; and 43 (b) the amendments to section 26-511 of the rent stabilization law of 44 nineteen hundred sixty-nine made by section two of this act shall expire 45 on the same date as such law expires and shall not affect the expiration 46 of such law as provided under section 26-520 of such law, as from time 47 to time amended.
