Source: https://www.nysenate.gov/legislation/bills/2019/S3693
Timestamp: 2020-01-20 18:09:52
Document Index: 383735960

Matched Legal Cases: ['§4', '§6', '§26', '§ 2', '§  3', '§  4', '§  5', '§ 7', '§ 8', '§  9', '§  10', '§ 11', '§ 12']

NY State Senate Bill S3693
senate Bill S3693
Eliminates rent increase for major capital improvements
Get Status Alerts for S3693
Feb 12, 2019 referred to housing, construction and community development
S3693 (ACTIVE) - Details
Amd §§4 & 5, Emerg Hous Rent Cont L; amd §§6 & 10, Emerg Ten Prot Act of 1974; amd §§26-403.2, 26-405, 26-407, 26-511 & 26-512, NYC Ad Cd
S3693 (ACTIVE) - Summary
Eliminates rent increase for major capital improvements.
S3693 (ACTIVE) - Sponsor Memo
BILL NUMBER: S3693
TITLE OF BILL:  An act eliminating rent increases based on major capi-
tal improvements; to amend chapter 274 of the laws of 1946, constituting
the emergency housing rent control law, the emergency tenant protection
act of nineteen seventy-four and the administrative code of the city of
New York, in relation to eliminating rent increases to pay for major
To eliminate the use of MCIs and relieve the current burden which MCIs
place on rent regulated tenants.
Section 2 directs the Division of Housing and Community Renewal to elim-
inate rent increases based on major capital improvements and provides
Sections 3, 4, 5, 6, 7, 8, 9 and 10 delete references to major capital
improvements from various sections of law
Section 11 provides that if any part of this law be deemed invalid by a
court of competent jurisdiction, that it is the intent of the legisla-
ture that the law would have been enacted even if such invalid provision
One of the most damaging factors in the battle to preserve rent regu-
lated units is the MCI program. Tenants whose rents include MCIs often
end up paying hundreds of dollars per room in addition to the legal
regulated rent. While the rent laws are designed to protect tenants,
this program has allowed for rent increases, which can lead to deregu-
lation of the unit, and housing instability or homelessness for the
tenant. Additionally, the current program has been rife with fraud and
abuse. It has become clear that only a complete elimination of the
program and rent rollback will suffice to protect the needs of tenants.
Immediately and shall expire upon the expiration of emergency housing
rent control law, the emergency tenant protection act, and the
provisions of chapter 4 of title 26, of the administrative code of the
S3693 (ACTIVE) - Bill Text download pdf
AN  ACT  eliminating rent increases based on major capital improvements;
to amend chapter 274 of the laws of 1946, constituting  the  emergency
housing rent control law, the emergency tenant protection act of nine-
teen seventy-four and the administrative code of the city of New York,
in  relation  to  eliminating  rent increases to pay for major capital
rents and evictions continues to exist. The  legislature  further  finds
that a majority of households currently occupying housing accommodations
subject  to  rent  laws  are  rent-burdened; that permanent increases in
rents are no longer necessary to incentivize rental property  owners  to
make,  or  to compensate landlords for, necessary major capital improve-
ments; that publicly funded  tax  incentives  and  other  subsidies  are
available  to  rental  property owners to support major capital improve-
ments; that value from major  capital  improvements  accrues  to  rental
property owners through increased property values and sale prices; that,
due  to  market  conditions  in  localities subject to rent laws, rental
property owners are already able to realize a reasonable return on their
investments in major capital  improvements  through  increased  property
values and sale prices alone; and that provisions for hardship increases
under  existing rent laws already ensure that rental property owners are
able to operate rent regulated housing without incurring  undue  losses.
The  legislature further declares and finds that a substantial number of
the rent increases previously granted  for  major  capital  improvements
LBD02240-03-9
S. 3693                             2
were  tainted  by  inflated costs, particularly in the last seven years;
that the  provision  of  permanent  rent  increases  for  major  capital
improvements  in existing rent laws has resulted in exactions of unjust,
unreasonable  and oppressive rents, as well as profiteering, speculation
and other disruptive practices tending to produce tenant dislocation and
threats to the public health, safety  and  general  welfare;  that  such
results  were  contrary  to  the intent and purpose of the existing rent
laws; that it is therefore necessary to amend the rent  laws  to  remove
any  provision  of  a  permanent  rent increase based upon major capital
improvements; and that it  is  additionally  necessary  to  repeal  rent
increases  based  upon  major capital improvements that became effective
within the previous seven years.
§ 2. (a) The division of housing and  community  renewal,  the  "divi-
sion",  shall  administer  the  elimination of rent increases based upon
major capital improvements pursuant to this act. The division  shall  no
longer  grant  rent increases on the basis of major capital improvements
at buildings subject to rent regulation or rent  stabilization  pursuant
to  the  emergency rent control law, the emergency tenant protection act
and/or the administrative code of the city  of  New  York.  All  pending
applications  for  rent  increases based upon major capital improvements
shall be denied, and the division shall issue orders disposing of  pend-
ing applications as necessary.
(b) Any rent increase based upon major capital improvements previously
ordered by the division, pursuant to the emergency rent control law, the
emergency  tenant  protection  act and/or the administrative code of the
city of New York, with an effective date within the seven years prior to
the effective date of this act shall be repealed  effective  immediately
unless  the  division  finds a basis for limiting the repeal pursuant to
subdivision (d) of this  section.  For  all  affected  housing  accommo-
dations,  the division shall determine what the present legal rent would
be for each such accommodation if the division had not ordered any  rent
increases  based upon major capital improvements during the repeal peri-
od, and this amount shall be the proposed new legal rent.
(c) Within 180 days of the effective date of this act, the division of
housing and community renewal shall determine  the  proposed  new  legal
rents  for  all  affected housing accommodations pursuant to subdivision
(b) of this section and shall also provide written notification  to  all
current  owners  and tenants of affected accommodations as to the amount
of the proposed new legal rents, the basis for the department's determi-
nation, and the time for each affected party to submit additional infor-
mation that the division shall consider before  issuing  a  final  order
determining  the  new legal rents, which shall not be less than 45 days.
Unless an owner of an affected building has submitted a timely  applica-
tion  to  the  division  for a limitation pursuant to subdivision (d) of
this section, the division shall issue a final order determining the new
legal rents for affected housing accommodations within 365 days  of  the
(d)  (1)  Within  90  days of receiving written notice of proposed new
legal rents from the  division  pursuant  to  subdivision  (c)  of  this
section,  a  building owner may apply to the commissioner of housing and
community renewal for an order limiting the amount of the repeal of rent
increases under this act based upon a finding  by  the  commissioner  of
housing  and community renewal that the proposed new legal rents are not
sufficient to enable the owner to maintain an annual gross  rent  income
for  such  building  which exceeds the annual operating expenses of such
building by a sum equal to at least five percent of such gross rent.  In
S. 3693                             3
buildings  for  which  the commissioner of housing and community renewal
finds that the proposed new legal rents are not sufficient to enable the
owner to maintain an annual gross rent income for  such  building  which
exceeds the annual operating expenses of such building by a sum equal to
at  least  five  percent  of  such gross rent, the repeal amount of rent
increases based upon major capital improvements shall be limited  to  an
amount  such  that  the annual operating expenses of the building do not
exceed ninety-five percent of the new proposed annual gross rent  income
for such building.
(2)  For  the  purposes  of this subdivision, operating expenses shall
consist of the actual, reasonable,  costs  of  fuel,  labor,  utilities,
taxes,  other  than  income or corporate franchise taxes, fees, permits,
necessary contracted services and noncapital repairs,  insurance,  parts
and  supplies,  management fees and other administrative costs and mort-
gage interest. For the purposes of this subdivision,  mortgage  interest
shall  be  deemed  to mean interest on a bona fide mortgage including an
allocable portion of charges related thereto. Criteria to be  considered
in determining a bona fide mortgage other than an institutional mortgage
shall  include: condition of the property, location of the property, the
existing mortgage market at the time the mortgage is placed, the term of
the mortgage, the amortization rate, the principal amount of  the  mort-
gage,  security  and other terms and conditions of the mortgage. For the
purposes of this subdivision, gross annual rent income  for  a  building
shall  include  a  rental  value  set by the commissioner of housing and
community renewal for any unit occupied by the owner or a person related
to the owner or unoccupied at the owner's choice for more than one month
at the last  regulated  rent  plus  the  minimum  number  of  guidelines
increases or, if no such regulated rent existed or is known, the commis-
sioner  shall  impute  a  rent  consistent with other proposed new legal
rents in the building.
(e) The division shall require that owners refund any  increase  in  a
tenant's security deposit amount collected in excess of a new legal rent
established  under this act within thirty days of the department's issu-
ance of an order determining  new  legal  rents.  Such  excess  security
deposit  amount  may  be  refunded  in the form of a rent credit applied
toward the affected tenant's next monthly  rent  payment,  and  affected
tenants  are  entitled to self-deduct the refund amount from future rent
(f) The new legal rent shall be the legal rent beginning on  the  date
rent  is  required  to  be  paid next succeeding the issuance of a final
order determining new legal rents under this act.
(g) Any lease agreement executed after the issuance of a  final  order
determining  new  legal rents under this act shall be deemed to incorpo-
rate the rent amounts and effective dates set forth in such order.
(h) Any tenant residing  in  an  affected  housing  accommodation  may
assert  their  entitlement to the repeal of prior rent under subdivision
(b) of this section, as a defense or counterclaim in any legal  proceed-
ing predicated upon a landlord's claim of default in the payment of rent
pursuant  to an agreement. Any court with jurisdiction over a landlord's
claim as to a tenant's default in the payment of rent shall also adjudi-
cate and have primary jurisdiction over  the  tenant's  assertion  of  a
defense  or  counterclaim under this provision if the department has not
yet issued an order determining the new legal rent. A court  order  made
under this subdivision shall not in any way be deemed to impair a build-
ing  owner's  right  or time to apply for a limitation under subdivision
S. 3693                             4
(i) All final orders issued by the department pursuant to subdivisions
(b), (c), and (d) of this section shall be subject to appeal pursuant to
existing procedures for administrative review before the division.
§  3. Paragraph 2 of subdivision 3-a of section 4, subparagraphs 7, 8,
9 and 10 of the second undesignated paragraph of paragraph (a) of subdi-
vision 4 of section 4, and subdivision 9 of section 5 of chapter 274  of
paragraph 2 of subdivision 3-a of section 4 as amended by chapter 337 of
the laws of 1961, subparagraphs 8, 9 and 10 of the  second  undesignated
paragraph  of  paragraph (a) of subdivision 4 of section 4 as amended by
section 25 of part B of chapter 97 of the laws of 2011,  subparagraph  7
of  the  second undesignated paragraph of paragraph (a) of subdivision 4
of section 4 as amended by section 32 of part A of  chapter  20  of  the
laws  of 2015, and subdivision 9 of section 5 as added by chapter 116 of
the laws of 1997, are amended to read as follows:
(2) the amount of  increases  in  maximum  rent  authorized  by  order
because of increases in dwelling space, services, furniture, furnishings
or equipment[, or major capital improvements].
(7) [there has been since March first, nineteen hundred fifty, a major
nance of the structure; which for any order of the  commissioner  issued
more  than  thiry-five  units, or (8)] there has been since March first,
tenants in occupancy of at least seventy-five per centum of the  housing
accommodations,  provided, however, that no adjustment granted hereunder
shall exceed fifteen per centum unless the  tenants  have  agreed  to  a
higher  percentage  of  increase, as herein provided; or [(9)] (8) there
has been, since March first, nineteen hundred fifty, a subletting  with-
out  written  consent  from the landlord or an increase in the number of
adult occupants who are not members  of  the  immediate  family  of  the
tenant, and the landlord has not been compensated therefor by adjustment
of  the  maximum rent by lease or order of the commission or pursuant to
the federal act; or [(10)]  (9)  the  presence  of  unique  or  peculiar
covered  by  the  rent stabilization law of nineteen hundred sixty-nine,
section  26-511  of  such law. This increase shall be in addition to any
[a  major capital improvement, or] a substantial increase or decrease in
S. 3693                             5
§  4.  Paragraphs  3,  4,  and 5 of subdivision d and subdivision g of
section 6 of section 4 of chapter 576 of the laws of 1974,  constituting
the  emergency tenant protection act of nineteen seventy-four, paragraph
3 of subdivision d as amended by section 30 of part A of chapter  20  of
the laws of 2015, paragraph 4 of subdivision d as amended by chapter 403
of  the laws of 1983, paragraph 5 of subdivision d as amended by chapter
102 of the laws of 1984, and subdivision g as added by  chapter  116  of
(3) [there has been since January first, nineteen hundred seventy-four
after the effective date of the rent act of 2015, or
(4)] an owner by application to the  state  division  of  housing  and
community  renewal  for  increases  in  the  rents in excess of the rent
adjustment authorized by the rent guidelines board under this act estab-
lishes a hardship, and the state division finds that the  rate  of  rent
adjustment  is  not  sufficient to enable the owner to maintain approxi-
mately the same ratio between operating expenses,  including  taxes  and
labor  costs but excluding debt service, financing costs, and management
fees, and gross rents which prevailed on the average over the  immediate
preceding  five  year  period, or for the entire life of the building if
[(5)] (4) as an alternative to the hardship application provided under
paragraph [four] THREE of this subdivision, owners of buildings acquired
by the same owner or a related entity owned by the same principals three
years prior to the date of application may apply  to  the  division  for
increases  in  excess  of  the  level  of applicable guideline increases
established under this law based on a finding by the  commissioner  that
such guideline increases are not sufficient to enable the owner to main-
tain  an  annual  gross  rent income for such building which exceeds the
annual operating expenses of such building by a sum equal  to  at  least
five  percent  of  such  gross rent. For the purposes of this paragraph,
operating expenses shall consist of the  actual,  reasonable,  costs  of
fuel,  labor, utilities, taxes, other than income or corporate franchise
taxes, fees, permits,  necessary  contracted  services  and  non-capital
repairs, insurance, parts and supplies, management fees and other admin-
istrative  costs  and  mortgage interest. For the purposes of this para-
graph, mortgage interest shall be deemed to mean interest on a bona fide
mortgage including an allocable  portion  of  charges  related  thereto.
Criteria to be considered in determining a bona fide mortgage other than
an  institutional  mortgage  shall  include;  condition of the property,
location of the property, the existing mortgage market at the  time  the
mortgage is placed, the term of the mortgage, the amortization rate, the
principal  amount  of  the mortgage, security and other terms and condi-
tions of the mortgage. The commissioner shall set a rental value for any
unit occupied by the owner or a person related to the owner  or  unoccu-
pied at the owner's choice for more than one month at the last regulated
rent  plus  the  minimum  number  of guidelines increases or, if no such
S. 3693                             6
regulated rent existed or is known, the commissioner shall impute a rent
consistent with other rents in the  building.  The  amount  of  hardship
rent  income as provided by this paragraph. The division shall not grant
a hardship application under this paragraph or paragraph [four] THREE of
this subdivision for a period of three years subsequent  to  granting  a
hardship  application  under  the  provisions  of  this  paragraph.  The
collection of any increase in the rent  for  any  housing  accommodation
pursuant to this paragraph shall not exceed six percent in any year from
the  effective date of the order granting the increase over the rent set
forth in the schedule of gross rents, with collectability of any  dollar
excess  above  said  sum  to be spread forward in similar increments and
added to the rent as established or set in future years. No  application
shall  be  approved  unless  the owner's equity in such building exceeds
five percent of: (i) the arms length purchase  price  of  the  property;
(ii)  the  cost  of any capital improvements for which the owner has not
collected a surcharge; (iii) any repayment of principal of any  mortgage
or  loan  used  to  finance  the purchase of the property or any capital
improvements for which the owner has not collected a surcharge; and (iv)
any increase in the equalized  assessed  value  of  the  property  which
occurred  subsequent  to  the  first  valuation  of  the  property after
purchase by the owner. For the purposes of this paragraph, owner's equi-
ty shall mean the sum of (i) the purchase price of the property less the
principal of any mortgage or loan used to finance the  purchase  of  the
property,  (ii)  the cost of any capital improvement for which the owner
has not collected a surcharge less the principal of any mortgage or loan
used to finance said improvement, (iii) any repayment of  the  principal
of  any mortgage or loan used to finance the purchase of the property or
any capital  improvement  for  which  the  owner  has  not  collected  a
surcharge,  and (iv) any increase in the equalized assessed value of the
property which occurred subsequent to the first valuation of the proper-
ty after purchase by the owner.
for vacancy leases, including the amount allowed by subdivision (a-1) of
section ten of this act. Such increase shall be in addition to any other
increases provided for in this act including an adjustment based upon [a
major capital improvement, or] a substantial modification or increase of
accommodation, pursuant to section six of this act and shall be applica-
ble in like manner to each second subsequent succession.
§  5.  Subdivision  (a-1) of section 10 of section 4 of chapter 576 of
nineteen  seventy-four,  as amended by section 16-b of part A of chapter
tive  date  of  this subdivision shall be as hereinafter set forth.  The
S. 3693                             7
to  the  difference  between  (a)  the  two year renewal lease guideline
promulgated by the guidelines board of the county in which  the  housing
accommodation  is  located  applied to the previous legal regulated rent
and (b) the one year renewal lease guideline promulgated by  the  guide-
lines  board of the county in which the housing accommodation is located
applied to the previous legal regulated rent. However, where the  amount
[this] subdivision C OF SECTION 26-511 OF THE ADMINISTRATION CODE OF THE
CITY OF NEW YORK, was less than the legal regulated rent, such  increase
rent  if  the  last  vacancy  lease commenced four or more years ago. In
including  an  adjustment based upon [a major capital improvement, or] a
S. 3693                             8
stabilization  law  of nineteen hundred sixty-nine, including the amount
law.  This increase shall be in addition to any other increases provided
for in this law including an adjustment  based  upon  [a  major  capital
improvement, or] a substantial increase or decrease in dwelling space or
§ 7. Subparagraphs (g), (h), (i), (j), (k), (l), (m), (n) and  (o)  of
paragraph  1  of  subdivision  g of section 26-405 of the administrative
code of the city of New York, subparagraph (g) as amended by section  31
of part A of chapter 20 of the laws of 2015, subparagraph (k) as amended
by  chapter 749 of the laws of 1990, and clause 7 of subparagraph (n) as
amended by local law number 76 of the city of  New  York  for  the  year
(g)  [There  has  been  since  July first, nineteen hundred seventy, a
major capital improvement required for the  operation,  preservation  or
period for buildings with more than thirty-five units, or
(h) There have been since March first, nineteen hundred fifty-nine, in
structures containing  more  than  four  housing  accommodations,  other
of at least seventy-five  per  centum  of  the  housing  accommodations;
provided,  however,  that  whenever  the city rent agency has determined
that the improvements proposed were part of a plan designed for  overall
improvement  of the structure or increases in services, it may authorize
increases in maximum rents for all housing accommodations affected  upon
the  express  consent  of the tenants in occupancy of at least fifty-one
per centum of the housing accommodations, and provided further  that  no
adjustment  granted hereunder shall exceed fifteen per centum unless the
tenants have agreed to  a  higher  percentage  of  increase,  as  herein
(i)] There has been, since March first, nineteen hundred fifty-nine, a
subletting  without  written consent from the landlord or an increase in
the number of adult occupants who are not members of the immediate fami-
ly of the tenant, and the landlord has not been compensated therefor  by
adjustment of the maximum rent by lease or order of the city rent agency
or pursuant to the state rent act or the federal act; or
[(j)]  (H) The presence of unique or peculiar circumstances materially
affecting the maximum rent has resulted  in  a  maximum  rent  which  is
for substantially similar housing accommodations.
[(k)  The landlord has incurred, since January first, nineteen hundred
S. 3693                             9
shall  be  in  an amount sufficient to amortize the cost of the improve-
ments pursuant to this subparagraph over a seven-year period.
(l)]  (I)  (1)  The  actual labor expenses currently incurred or to be
incurred (pursuant to a collective agreement or other obligation actual-
ly entered into by  the  landlord)  exceed  the  provision  for  payroll
expenses  in  the  current  applicable operating and maintenance expense
allowance under subdivision a of this section. No  application  pursuant
to this subparagraph may be granted within one year from the granting of
an  adjustment  in  maximum rent pursuant to this subparagraph [(l)], or
pursuant to subparagraph (a) of this paragraph. Any  rent  increase  the
applicant  would  be  entitled  to,  or  such portion thereof, shall not
exceed a total increase of seven and one-half per centum  per  annum  of
the  maximum rent as provided in paragraph five of subdivision a of this
(2) Any adjustment in the  maximum  rents  pursuant  hereto  shall  be
(i) The adjustment in maximum rent for any twelve-month period for any
housing  accommodation shall not exceed four percent of the maximum rent
in effect on December thirty-first, nineteen hundred seventy-three.
(ii) Where the increase in  labor  costs  compensable  herein  is  the
result of an industry-wide collective bargaining agreement or a specific
agreement in anticipation of, or subsequent to, an industry-wide collec-
tive  bargaining  agreement,  the  adjustment  shall  be  in such amount
(subject to the above limitation) that the increased rental income  from
January  first,  nineteen hundred seventy-four to December thirty-first,
nineteen hundred seventy-six shall reflect the increased labor costs for
the period from April thirtieth, nineteen hundred seventy-three to April
thirtieth, nineteen hundred seventy-six.
(3) For the purpose of this subparagraph [(l)] the increase  in  labor
costs  shall  be  the  amount  by  which the labor costs (a) actually in
effect and paid, or (b) actually in effect and paid or payable and fixed
and determined pursuant to agreement on the date of the  filing  of  the
application  and projected over the period ending April thirtieth, nine-
teen hundred seventy-six, exceed the labor costs for the twelve calendar
months immediately preceding the last day of the month in which the wage
(4) Notwithstanding any other provision of this chapter,  the  adjust-
ment  pursuant  to this subparagraph shall be collectible upon the land-
lord's filing of a report with the city  rent  agency,  subject  to  the
provisions of subparagraph (e) of paragraph two of subdivision a of this
(5)  No increase in the maximum rent for any housing accommodation may
be granted under this subparagraph [(l)] if on the date when the  appli-
cation  is sought to be filed, less than the full term of such agreement
has elapsed since the date of the filing of the last  prior  application
for  an  increase  with respect to such property under this subparagraph
[(l)], which application resulted in the granting of an increase. Where,
however, the landlord establishes the existence of  unique  or  peculiar
circumstances affecting an increase in labor costs for the property, the
agency may accept such application where it determines that such accept-
ance is not inconsistent with the purposes of this local law.
(6)  The  increase  authorized  herein  shall be apportioned equitably
among all the housing accommodations in  the  property  whether  or  not
subject to control under this chapter.
S. 3693                            10
[(m)]  (J)  Where the rehabilitation or improvement of sub-standard or
deteriorated housing accommodations has been financed  under  a  govern-
mental program providing assistance through loans, loan insurance or tax
abatement  or  has  been undertaken under another rehabilitation program
not so financed but approved by the commissioner.
[(n)](K)(1) The city rent agency shall hereafter promulgate in January
(i)  findings  regarding the price increase or decrease, respectively,
for all types of heating fuel, including numbers two, four and six  home
heating oils, utility supplied steam, gas, electricity and coal, togeth-
er  with the sales and excise taxes thereon, on December thirty-first as
compared to the January first in any year; and
(ii) standards for consumption of heating fuel, which shall be no more
than two hundred twenty-five gallons per year per room commencing  Janu-
ary first, nineteen hundred eighty-one, for buildings using heating oils
for  heat with comparable unit limitations to be established by the city
rent agency for utility supplied steam, gas, electricity, coal  and  any
other types of heating systems, provided that such consumption standards
for heating fuels shall be reduced by five gallons per room per year for
heating  oils  and  a  comparable amount for other heating fuels for the
next succeeding year and ten gallons per room per year for heating  oils
and a comparable amount for other heating fuels for two succeeding years
Such findings and consumption standards shall be published in the City
(2) To obtain a rental adjustment pursuant to this subparagraph [(n)],
the  landlord shall file a report with the agency on forms prescribed by
the agency and shall:
(i) certify the amount of heating fuel consumed in the  calendar  year
immediately prior to the filing of the report;
(ii) state the type of fuel used and the number of rooms in the build-
(iii)  certify that (a) all essential services required to be provided
have been and will continue to be maintained and (b) there has  been  no
rent  reduction order issued pursuant to this chapter based on the land-
lord's failure to provide heat or hot  water  during  the  prior  twelve
(iv)  certify  on  information  and belief, in order to qualify for an
additional rent increase pursuant to this subparagraph [(n)],  that  for
an  individual  housing  accommodation,  if the maximum rent collectible
pursuant to paragraph five of subdivision a of this section plus  actual
rent adjustments pursuant to this subparagraph [(n)] and such additional
rent  increase,  is  equal  to  or  exceeds the maximum rent established
pursuant to paragraphs three and four of subdivision a of  this  section
plus  the  amount  calculated  pursuant to subitem (i) of item three and
subitem (i) of item four of this subparagraph [(n)], each  to  be  allo-
cated  to  such  housing  accommodation pursuant to subitem (ii) of item
four of this subparagraph [(n)], that the landlord will not  be  earning
an  amount  in  excess of the statutory return specified in subparagraph
(a) of THIS paragraph [one of  subdivision  g  of  this  section]  after
collection  of a rent increase pursuant to this subparagraph [(n)], with
respect to a building or buildings serviced by a single heating plant;
(v) report any funds received with respect  to  the  housing  accommo-
dations  from  any governmental grant program compensating such landlord
for fuel price increases during the period for which  an  adjustment  is
obtained pursuant to this subparagraph [(n)];
S. 3693                            11
(vi) provide such other information as the agency may require.
(3)  Rent adjustments for controlled housing accommodations for annual
heating fuel cost increases  or  decreases  experienced  after  December
thirty-first,  nineteen  hundred  seventy-nine,  shall  be determined as
(i) the increase or decrease in heating fuel prices found by the agen-
cy for that year shall be multiplied by the actual consumption,  not  to
exceed  that year's consumption standard established pursuant to subitem
(ii) of item one of this subparagraph; and
(ii) seventy-five percentum of such amount shall  be  allocated  among
all rental space in the building, including commercial, professional and
similar  facilities,  provided,  for  the  purposes of this subparagraph
[(n)], that living rooms, kitchens over fifty-nine square feet  in  area
and  bedrooms  shall  be considered rooms and that bathrooms, foyers and
kitchenettes shall not be considered rooms.
(4) Rent adjustments for controlled housing accommodations for heating
fuel cost increases or decreases experienced from April ninth,  nineteen
hundred seventy-nine, through and including December thirty-first, nine-
teen hundred seventy-nine, shall be determined as follows:
cy  for that period shall be multiplied by seventy-five percentum of the
actual heating fuel consumption during the period  from  January  first,
nineteen  hundred  seventy-nine,  through and including December thirty-
first, nineteen hundred seventy-nine, which consumption shall not exceed
seventy-five percentum of that year's consumption  standard  established
(ii)  such  amount  shall  be  allocated among all rental space in the
building, including commercial,  professional  and  similar  facilities,
provided,  for  the  purposes  of  this  subparagraph [(n)], that living
rooms, kitchens over fifty-nine square feet in area and  bedrooms  shall
be  considered  rooms  and that bathrooms, foyers and kitchenettes shall
not be considered rooms.
The city rent agency shall promulgate findings for heating fuel  price
increases or decreases and standards for consumption for the periods set
forth in this item four thirty days after this local law is enacted. The
standard for consumption shall be no more than seventy-five percentum of
two hundred thirty gallons per room for buildings using heating oils for
heat with comparable unit limitations to be established by the city rent
agency  for utility supplied steam, gas, electricity, coal and any other
(5) A landlord who files a report pursuant to  this  subparagraph  and
who  falsely certifies shall not be eligible to collect any rent adjust-
ment pursuant to this subparagraph for two years  following  a  determi-
nation  of  a  false  certification  and,  in  addition, any adjustments
obtained pursuant to this subparagraph for up to two years prior to such
determination shall not be collectible for that same  two  year  period.
Such  landlord shall also be subject to any additional penalties imposed
(6) A landlord annually may file a report pursuant  to  this  subpara-
graph  [(n)]  after  promulgation  by  the  agency  of  the findings and
consumption standards set forth in item one of THIS subparagraph  [(n)].
A rent adjustment pursuant to such report shall be prospectively collec-
tible  upon  the  landlord's  serving  and  filing the report, provided,
however, that if a landlord files such report within sixty days  of  the
promulgation  of  such  findings  and  consumption  standards, such rent
S. 3693                            12
adjustment shall be retroactive to and shall  be  effective  as  of  the
January first of the year in which the report is filed.
(7)  A  landlord demanding or collecting a rent adjustment pursuant to
this subparagraph [(n)] shall at  the  time  of  either  the  demand  or
collection  issue to the tenant either a rent bill or receipt separately
setting forth the amount of the adjustment pursuant to this subparagraph
[(n)]  and  the  amount  of  the  maximum  rent  otherwise  demanded  or
collected.    If  the tenant has been issued a valid senior citizen rent
exemption order or a valid disability rent exemption  order,  the  owner
shall  also separately state the amount payable by the senior citizen or
person with a disability after the exemption.
(8) In the event that a rent reduction order is  issued  by  the  city
rent  agency  based  upon  the landlord's failure to provide heat or hot
water to housing accommodations for which the landlord is  collecting  a
rent adjustment pursuant to this subparagraph [(n)], the rent adjustment
shall  not  be collected during the time such rent reduction order is in
effect and for twelve months following the date of  the  restoration  of
the  rent  reduction. In addition, the landlord shall not be eligible to
collect any subsequent rent adjustment  pursuant  to  this  subparagraph
[(n)]  until  twelve months following the date of the restoration of the
(9) In the event that the city rent agency promulgates a finding of  a
price  decrease,  if  any  landlord  who  has obtained a rent adjustment
pursuant to this subparagraph [(n)] does not file a report  for  a  rent
adjustment  pursuant to this subparagraph [(n)] within sixty days of the
promulgation of such findings, then all rent adjustments obtained pursu-
ant to this subparagraph [(n)] shall not be collectible for a period  of
(10)  Any rent adjustment obtained pursuant to this subparagraph [(n)]
shall not be included in the maximum rent established pursuant to  para-
graph four or five of subdivision [(a)] A of this section.
(11)  The  city  rent  agency  shall have the power to promulgate such
regulations as it may consider necessary or convenient to implement  and
administer  the  provisions  of this subparagraph [(n)]. The regulations
shall also require that any rent adjustment  granted  pursuant  to  this
subparagraph  [(n)]  be  reduced  by an amount equal to any governmental
grant received by the landlord compensating the landlord  for  any  fuel
price  increases, but not required by the city, the agency or any grant-
ing government entity  to  be  expended  for  fuel  related  repairs  or
[(o)]  (L)  (1) There has been an increase in heating and heating fuel
expenditures in a property resulting from a city-wide  rise  in  heating
fuel  costs such that the verifiable expenditures for heating or heating
fuel in a property for nineteen hundred seventy-four exceeds the verifi-
able expenditures for such  heating  or  heating  fuel  during  nineteen
hundred seventy-three.
(2) To obtain a rental adjustment pursuant to this subparagraph [(o)],
the  landlord  must  certify that he or she is presently maintaining all
essential services required to be furnished with respect to the  housing
accommodations  covered  by  such certification, and that he or she will
continue to so maintain such essential services for the  period  of  any
(3) To obtain a rental adjustment pursuant to this subparagraph [(o)],
the  landlord must certify on information and belief that he or she will
not be earning an amount in excess of the statutory return specified  in
subparagraph  (a)  of  THIS  paragraph  [one  of  subdivision  g of this
S. 3693                            13
section] after collection of such rental adjustment, with respect to the
building or buildings serviced by a single heating plant; and where  the
building,  or  buildings  serviced  by  a single heating plant, contains
forty-nine  or  fewer  housing accommodations, the landlord must certify
that the amount expended directly for heating or heating fuel  in  nine-
teen hundred seventy-four equalled or exceeded ten per cent of the total
rental  income  which  was  derived  from  the  property during nineteen
hundred seventy-four; and, where the building, or buildings serviced  by
a  single  heating  plant, contains fifty or more housing accommodations
the landlord must certify that the amount expended directly for  heating
or  heating  fuel  in nineteen hundred seventy-four equalled or exceeded
seven and one-half percentum  of  the  total  rental  income  which  was
derived from the property during nineteen hundred seventy-four.
(4)  The  total  rental  adjustments for a property to be allocated or
deemed allocated pursuant to this subparagraph [(o)]  shall  not  exceed
one-half  of the gross amount by which the total verifiable expenditures
for heating or heating fuel for nineteen  hundred  seventy-four  exceeds
the  total  verifiable expenditures for such heating or heating fuel for
nineteen hundred seventy-three.
(5) Such total rental adjustments shall be allocated or  deemed  allo-
cated  pursuant to this subparagraph [(o)] to all housing accommodations
subject to this chapter, to all other housing accommodations, and to all
commercial, professional and similar facilities in  or  associated  with
the  property  in  a  manner to be determined by the agency. In no event
shall any adjustment in maximum rent pursuant to this subparagraph [(o)]
for any housing accommodations subject to this chapter exceed a  monthly
increase of two dollars per room, as defined by item eight below. In any
apartment  containing  five or more rooms, any increase shall not exceed
the total of nine dollars.
(6) Any adjustment pursuant to this subparagraph [(o)] shall be effec-
tive for all or part of the period July first, nineteen  hundred  seven-
ty-five  through  June  thirtieth,  nineteen  hundred  seventy-six.  Any
adjustment pursuant to this subparagraph shall automatically  expire  no
later than June thirtieth, nineteen hundred seventy-six.
(7)  The  rental  increases provided for herein shall be effective and
collectible upon the landlord's filing a report with the agency on forms
prescribed by the agency and upon giving such notice to the  tenants  as
the  agency  shall  prescribe,  subject to adjustments upon order of the
(8) In determining the  amount  of  an  adjustment  allocation  of  an
adjustment  pursuant  to  this  subparagraph  [(o)],  only living rooms,
kitchens over fifty-nine square feet in area, dining rooms and  bedrooms
shall be considered rooms; bathrooms, foyers, and kitchenettes shall not
be considered rooms.
§ 8. Subdivision a of section 26-407 of the administrative code of the
a.  Notwithstanding  any  provisions  of  this chapter, any labor cost
pass-along rent increase requested of, or received from, any  tenant  on
or  after  July  first,  nineteen  hundred  seventy-two, pursuant to the
provisions of subparagraph [(1)] (I) of paragraph one of  subdivision  g
of  section  26-405  of  this  title,  shall not exceed the maximum rent
adjustment as provided under this chapter after the  effective  date  of
§  9.  Paragraphs  5-a and 6 of subdivision c of section 26-511 of the
administrative code of the city of New York, paragraph 5-a as amended by
section 16-a of part A of chapter 20 of the laws of 2015 and paragraph 6
S. 3693                            14
as amended by section 29 of part A of chapter 20 of the  laws  of  2015,
accommodation  shall  be  increased by the following: (i) if the vacancy
lease is for a term of two years, twenty percent of the  previous  legal
regulated  rent;  or (ii) if the vacancy lease is for a term of one year
rent,  such  increase to the legal regulated rent shall not exceed: five
or  more  years  ago.  In  addition, if the legal regulated rent was not
to  this  chapter  including  an  adjustment based upon [a major capital
improvement, or] a substantial  modification  or  increase  of  dwelling
space  or  services, or installation of new equipment or improvements or
new furniture or furnishings provided in or to the housing accommodation
ria shall provide [(a)], as to hardship applications, for a finding that
S. 3693                            15
determination issued by the division of housing  and  community  renewal
after  the  effective  date  of  the  rent  act of 2015, based upon cash
ing anything to the contrary  contained  herein,  no  hardship  increase
§  10.  Subdivision  f of section 26-512 of the administrative code of
S. 3693                            16
for vacancy leases, including the amount allowed by paragraph [(five-a)]
FIVE-A  of  subdivision  c  of section 26-511 of this law. Such increase
shall be in addition to any other increases provided  for  in  this  law
section  26-511  of  this  law and shall be applicable in like manner to
each second subsequent succession.
§ 11. If any clause, sentence, paragraph, subdivision, section or part
be  invalid,  such  judgment shall not affect, impair, or invalidate the
sentence, paragraph,  subdivision,  section  or  part  thereof  directly
been included herein. It is further declared to be  the  intent  of  the
legislature  that  this act would have been enacted even if subdivisions
(b), (c), (d), (e), (f), (g), (h), and (i) of section two  of  this  act
§ 12. This act shall take effect immediately; provided:
(a)  that  the amendments to sections 4 and 5 of the emergency housing
rent control law made by section three of this act shall expire  on  the
laws of 1946;
(b) that the amendments to sections 6 and 10 of section 4 of the emer-
gency tenant protection act of nineteen seventy-four  made  by  sections
four  and  five  of  this  act shall expire on the same date as such act
section 17 of chapter 576 of the laws of 1974;
(c)  that the amendments to section 26-511 of chapter 4 of title 26 of
the administrative code of the city of New York made by section nine  of
(d) that the amendments to section 26-512 of chapter 4 of title 26  of
the  administrative  code of the city of New York made by section ten of
(e) that the amendments to sections 26-403.2, 26-405 and 26-407 of the
city  rent and rehabilitation law made by sections six, seven, and eight
(f) Effective immediately, the addition, amendment  and/or  repeal  of
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