S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4401
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 4, 2019
                                ___________
 
 Introduced by M. of A. BARNWELL -- read once and referred to the Commit-
   tee on Housing
 
 AN ACT eliminating the department of homes and community renewal's major
   capital  improvement  program;  creating  the  guaranteed habitability
   protections program within  the  department  of  homes  and  community
   renewal; to amend the emergency housing rent control law, the emergen-
   cy  tenant protection act of nineteen seventy-four and the administra-
   tive code of the city of New York, in  relation  to  eliminating  rent
   increases to pay for major capital improvements
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. (a) The department of homes and community renewal shall end
 the major capital improvement program. All increases  to  rents  allowed
 during  the  life  of  the  major  capital  improvement program shall be
 repealed upon petition from a tenant, all  applications  pending  review
 for  the  major capital improvement program shall be denied, and no rent
 increases shall be allowed under the major capital improvement program.
   (b) The department of homes and community renewal, upon repealing  any
 increase  or  increases  in  rent  under  the  major capital improvement
 program, shall require that the rent is reduced by an  amount  equal  to
 that of the previous increase or increases allowed under the major capi-
 tal  improvement  program  in  that  instance  for  all  current tenants
 affected by such increase or increases.  This rent shall  be  considered
 the legal rent and shall no longer be a preferential rent.
   (c)  The  department of homes and community renewal shall require that
 any increase in a tenant's security deposit due to an increase  in  rent
 under  the  major capital improvement program be repaid to the tenant by
 the landlord within thirty days of such repeal.
   (d) The new legal rent shall be the legal rent beginning on  the  date
 rent  is  required  to  be  paid  next succeeding the repeal of any rent
 increase under the major capital improvement program.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02404-01-9

 A. 4401                             2
 
   (e) Any lease signed after a repeal  of  rent  increase  or  increases
 under  the  major  capital  improvement program shall be tied to the new
 legal rent which shall have such  rent  reduced  by  all  previous  rent
 increases granted under and/or by the major capital improvement program.
   (f)  The  department  of  homes and community renewal shall notify all
 current tenants affected by an increase in rent under the major  capital
 improvement  program  that  they  can  appeal to such department for the
 repeal of such increase in rent and that any increase in rent under  the
 major  capital  improvement  program that is repealed will result in the
 reduction of rent and the repayment  of  the  various  security  deposit
 increases associated with said increases.
   (g)  The  department  of homes and community renewal shall, within one
 year of the effective date of this act, consider  all  appeals  for  the
 repeal  of  an  increase  in  rent  under  the major capital improvement
 program. If an appeal was filed but not ruled  upon  after  an  investi-
 gation  within one year of the effective date of this act by the depart-
 ment of homes and community renewal, the appeal shall be granted.
   § 2. (a) The department of  homes  and  community  renewal  is  hereby
 authorized   and   directed   to  establish  a  guaranteed  habitability
 protections program and promulgate, amend, add or remove  any  rules  or
 regulations necessary to establish such program.
   (b)  The  program  shall work to ensure the habitability of all rental
 dwellings, specifically that no rental dwelling becomes uninhabitable by
 requiring regular updates and improvements to rental dwellings. A rental
 dwelling shall be deemed uninhabitable where it is not safe and  livable
 and the landlord would be in violation of the warranty of habitability.
   (c) When the department of homes and community renewal determines that
 any  unit of a rental dwelling has an issue which may impact the habita-
 bility of the unity, such  department  under  this  program  shall  give
 notice  to  the  landlord.  Where the issue is not life threatening, the
 landlord shall have within thirty  days  to  rectify  the  issue  before
 incurring  a  violation.  Where the issue is life threatening, as deter-
 mined by the department of homes and  community  renewal,  the  landlord
 shall  have  an amount of time as determined by such department based on
 the severity of the issue  to  rectify  the  issue  before  incurring  a
 violation. The department of homes and community renewal shall determine
 which  issues are and which issues are not life threatening. Upon incur-
 ring a violation, the landlord shall have the same  amount  of  time  to
 rectify  the issue before incurring another violation. An issue shall be
 deemed rectified when the issue no longer exists  or  the  tenants  have
 been  moved  into  another  unit of equal or greater quality, where such
 determination of quality shall be made by the department  of  homes  and
 community renewal. A landlord shall be fined:
   (i)  $10,000  for the first violation involving a non-life threatening
 issue;
   (ii) $25,000 for the second violation involving a non-life threatening
 issue;
   (iii) $50,000 for the third and each subsequent violation involving  a
 non-life threatening issue; and
   (iv)  $100,000  for  each resident of an affected unit for a violation
 involving a life threatening issue.
   § 3. Paragraph 2 of subdivision 3-a, subparagraph (iii) of the opening
 paragraph of paragraph (a) and subparagraphs 7,  8,  9  and  10  of  the
 second  undesignated  paragraph  of  paragraph  (a)  of subdivision 4 of
 section 4 and subdivision 9 of section 5 of chapter 274 of the  laws  of
 1946,  constituting  the emergency housing rent control law, paragraph 2

 A. 4401                             3

 of subdivision 3-a of section 4 as amended by chapter 337 of the laws of
 1961, subparagraph (iii) of the opening paragraph of  paragraph  (a)  of
 subdivision 4 of section 4 as amended by chapter 21 of the laws of 1962,
 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, subparagraphs 8, 9 and 10 of the second undesig-
 nated 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 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].
   (iii)  The  ratio of the sales price to the annual gross income of the
 property, with consideration given to the total amount of  rent  adjust-
 ments  previously  granted,  exclusive  of  rent  adjustments because of
 changes in dwelling space, services, furniture,  furnishings  or  equip-
 ment, [major capital improvements,] or substantial rehabilitation;
   (7) [there has been since March first, nineteen hundred fifty, a major
 capital  improvement required for the operation, preservation or mainte-
 nance of the structure; which for any order of the  commissioner  issued
 after  the  effective  date  of  the  rent  act of 2015 the cost of such
 improvement shall be amortized over an eight-year period  for  buildings
 with thirty-five or fewer units or a nine year period for buildings with
 more  than  thirty-five units, or (8)] there has been since March first,
 nineteen hundred fifty, in structures containing more than four  housing
 accommodations,  other improvements made with the express consent of the
 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
 circumstances  materially  affecting  the maximum rent has resulted in a
 maximum rent which is  substantially  lower  than  the  rents  generally
 prevailing  in  the same area for substantially similar housing accommo-
 dations.
   9. Notwithstanding any provision of this law to the  contrary  in  the
 case where all tenants occupying the housing accommodation on the effec-
 tive date of this subdivision have vacated the housing accommodation and
 a  family  member  of such vacating tenant or tenants is entitled to and
 continues to occupy the housing accommodation subject to the protections
 of this law, if such accommodation continues to be subject to  this  law
 after  such family member vacates, on the occurrence of such vacancy the
 maximum collectable rent shall be increased by a sum equal to the allow-
 ance then in  effect  for  vacancy  leases  for  housing  accommodations
 covered  by  the  rent stabilization law of nineteen hundred sixty-nine,
 including the amount allowed by paragraph five-a  of  subdivision  c  of
 section  26-511  of  such law. This increase shall be in addition to any
 other increases provided in this law including an adjustment based  upon
 [a  major capital improvement, or] a substantial increase or decrease in
 dwelling space or a change in the services,  furniture,  furnishings  or

 A. 4401                             4
 
 equipment  provided  in  the  housing accommodation, pursuant to section
 four of this law and shall be applicable in like manner to  each  second
 subsequent succession.
   §  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
 the laws of 1997, are amended to read as follows:
   (3) [there has been since January first, nineteen hundred seventy-four
 a  major capital improvement required for the operation, preservation or
 maintenance of the structure. An adjustment under this  paragraph  shall
 be  in  an  amount  sufficient  to amortize the cost of the improvements
 pursuant to this paragraph over an eight-year period for a building with
 thirty-five or fewer housing accommodations, or a nine-year period for a
 building with more than  thirty-five  housing  accommodations,  for  any
 determination  issued  by  the division of housing and community renewal
 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
 less than five years, or
   [(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

 A. 4401                             5
 
 regulated rent existed or is known, the commissioner shall impute a rent
 consistent with other rents in the  building.  The  amount  of  hardship
 increase  shall  be such as may be required to maintain the annual gross
 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)] (III) any increase in the equalized assessed value of the proper-
 ty which occurred subsequent to the  first  valuation  of  the  property
 after purchase by the owner. For the purposes of this paragraph, owner's
 equity 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)] (III) 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.
   g.  Notwithstanding  any  provision of this act to the contrary in the
 case where all tenants named in a lease have permanently vacated a hous-
 ing accommodation and a family member of such tenant or tenants is enti-
 tled to and executes a renewal lease for the  housing  accommodation  if
 such accommodation continues to be subject to this act after such family
 member  vacates,  on  the occurrence of such vacancy the legal regulated
 rent shall be increased by a sum equal to the allowance then  in  effect
 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
 dwelling space or services, or installation of new equipment or improve-
 ments  or  new  furniture  or  furnishings provided in or to the housing
 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
 the  laws  of  1974, constituting the emergency tenant protection act of
 nineteen seventy-four, as amended by section 16-b of part A  of  chapter
 20 of the laws of 2015, is amended to read as follows:
   (a-1)  provides  that,  notwithstanding any provision of this act, the
 legal regulated rent for any vacancy lease entered into after the effec-
 tive date of this subdivision shall be as hereinafter set  forth.    The
 previous  legal  regulated  rent for such housing accommodation shall be
 increased by the following: (i) if the vacancy lease is for  a  term  of

 A. 4401                             6
 
 two  years, twenty percent of the previous legal regulated rent; or (ii)
 if the vacancy lease is for a term of one year  the  increase  shall  be
 twenty percent of the previous legal regulated rent less an amount equal
 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
 charged  and  paid by the prior tenant pursuant to paragraph fourteen of
 this subdivision, was less than the legal regulated rent, such  increase
 to  the  legal  regulated  rent  shall not exceed:   five percent of the
 previous legal regulated rent if the last vacancy lease  commenced  less
 than  two years ago; ten percent of the previous legal regulated rent if
 the last vacancy commenced less than three years ago; fifteen percent of
 the previous legal regulated rent if the last  vacancy  lease  commenced
 less than four years ago; twenty percent of the previous legal regulated
 rent  if  the  last  vacancy  lease commenced four or more years ago. In
 addition, if the legal regulated rent was not increased with respect  to
 such housing accommodation by a permanent vacancy allowance within eight
 years  prior  to a vacancy lease executed on or after the effective date
 of this subdivision, the legal regulated rent may be  further  increased
 by an amount equal to the product resulting from multiplying such previ-
 ous legal regulated rent by six-tenths of one percent and further multi-
 plying the amount of rent increase resulting therefrom by the greater of
 (A)  the  number  of  years  since  the imposition of the last permanent
 vacancy allowance, or (B) if the rent was not increased by  a  permanent
 vacancy allowance since the housing accommodation became subject to this
 act,  the  number  of  years  that  such  housing accommodation has been
 subject to this act. Provided that if the previous legal regulated  rent
 was  less  than  three  hundred  dollars  the total increase shall be as
 calculated above plus one hundred dollars per month. Provided,  further,
 that  if  the  previous  legal regulated rent was at least three hundred
 dollars and no more than five hundred dollars  in  no  event  shall  the
 total  increase  pursuant  to  this subdivision be less than one hundred
 dollars per month. Such increase shall  be  in  lieu  of  any  allowance
 authorized  for the one or two year renewal component thereof, but shall
 be in addition to any other increases authorized pursuant  to  this  act
 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  pursuant  to
 section  six  of this act.   The increase authorized in this subdivision
 may not be implemented more than one time in any calendar year, notwith-
 standing the number of vacancy leases entered into in such year.
   § 6. Section 26-403.2 of the administrative code of the  city  of  New
 York, as added by chapter 116 of the laws of 1997, is amended to read as
 follows:
   §  26-403.2  Increase in maximum collectable rent. Notwithstanding any
 provision of this law to the contrary in  the  case  where  all  tenants
 occupying  the  housing  accommodation  on  the  effective  date of this
 section have vacated the housing accommodation and a  family  member  of
 such  vacating  tenant or tenants is entitled to and continues to occupy
 the housing accommodation subject to the protections  of  this  law,  if
 such accommodation continues to be subject to this law after such family
 member  vacates, on the occurrence of such vacancy the maximum collecta-

 A. 4401                             7
 
 ble rent shall be increased by a sum equal  to  the  allowance  then  in
 effect for vacancy leases for housing accommodations covered by the rent
 stabilization  law  of nineteen hundred sixty-nine, including the amount
 allowed  by  paragraph five-a of subdivision c of section 26-511 of such
 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
 a change in the services, furniture, furnishings or  equipment  provided
 in the housing accommodation, pursuant to section 26-405 of this law and
 shall be applicable in like manner to each second subsequent succession.
   §  7.  Subparagraph  (c)  of  paragraph  1 of subdivision g of section
 26-405 of the administrative code of the city of New York is amended  to
 read as follows:
   (c)  the  ratio  of  the sales price to the annual gross income of the
 property, with consideration given to the total amount of  rent  adjust-
 ments  previously  granted,  exclusive  of  rent  adjustments because of
 changes in dwelling space, services, furniture,  furnishings  or  equip-
 ment, [major capital improvements,] or substantial rehabilitation;
   §  8.  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
 2005, are amended to read as follows:
   (g) [There has been since July  first,  nineteen  hundred  seventy,  a
 major  capital  improvement  required for the operation, preservation or
 maintenance of the structure. An adjustment under this subparagraph  (g)
 for any order of the commissioner issued after the effective date of the
 rent  act  of 2015 shall be in an amount sufficient to amortize the cost
 of the improvements pursuant to this subparagraph (g) over an eight-year
 period for buildings with thirty-five or fewer  units  or  a  nine  year
 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
 improvements  made  with the express consent of the tenants in occupancy
 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
 provided; or
   [(i)]  (H)  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 family of the tenant, and the landlord has  not  been  compen-
 sated  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)]  (I) The presence of unique or peculiar circumstances materially
 affecting the maximum rent has resulted  in  a  maximum  rent  which  is

 A. 4401                             8
 
 substantially lower than the rents generally prevailing in the same area
 for substantially similar housing accommodations.
   [(k)  The landlord has incurred, since January first, nineteen hundred
 seventy, in connection with and in addition to a concurrent major  capi-
 tal  improvement  pursuant  to subparagraph (g) of this paragraph, other
 expenditures to improve, restore or preserve the quality of  the  struc-
 ture.  An  adjustment  under  this subparagraph shall be granted only if
 such improvements represent an expenditure equal to  at  least  ten  per
 centum of the total operating and maintenance expenses for the preceding
 year.  An adjustment under this subparagraph shall be in addition to any
 adjustment granted for the  concurrent  major  capital  improvement  and
 shall  be  in  an amount sufficient to amortize the cost of the improve-
 ments pursuant to this subparagraph over a seven-year period.
   (l)] (J) (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
 section.
   (2)  Any  adjustment  in  the  maximum  rents pursuant hereto shall be
 subject to:
   (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
 agreement became effective.
   (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
 section.
   (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

 A. 4401                             9

 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.
   [(m)]  (K)  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)](L)(1) The city rent agency shall hereafter promulgate in January
 of each year;
   (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
 thereafter.
   Such findings and consumption standards shall be published in the City
 Record.
   (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-
 ing;
   (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
 months;
   (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

 A. 4401                            10
 
 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  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)];
   (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
 follows:
   (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:
   (i) the increase or decrease in heating fuel prices found by the agen-
 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
 by the agency; and
   (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
 types of heating systems.
   (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.

 A. 4401                            11

 Such  landlord shall also be subject to any additional penalties imposed
 by law.
   (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
 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
 rent reduction.
   (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
 twelve months.
   (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) 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
 improvements.
   [(o)] (M) (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.

 A. 4401                            12
 
   (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
 such adjustment.
   (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
 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
 agency.
   (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.
   § 9. Subdivision a of section 26-407 of the administrative code of the
 city of New York is amended to read as follows:

 A. 4401                            13
 
   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)] (J) of paragraph one of  subdivision  g
 of  section 26-405 of this [title] CHAPTER, shall not exceed the maximum
 rent adjustment as provided under this chapter after the effective  date
 of this section.
   §  10.  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 and paragraph 6 as amended by section 29 of part A of chap-
 ter 20 of the laws of 2015, are amended to read as follows:
   (5-a) provides that, notwithstanding any provision  of  this  chapter,
 the  legal  regulated  rent for any vacancy lease entered into after the
 effective date of this paragraph shall be  as  hereinafter  provided  in
 this  paragraph.  The  previous  legal  regulated  rent for such housing
 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
 the  increase  shall  be  twenty percent of the previous legal regulated
 rent less an amount equal to the difference between  (a)  the  two  year
 renewal  lease guideline promulgated by the guidelines board of the city
 of New York applied to the previous legal regulated rent and (b) the one
 year renewal lease guideline promulgated by the guidelines board of  the
 city  of New York applied to the previous legal regulated rent. However,
 where the amount charged and paid by the prior tenant pursuant to  para-
 graph  fourteen  of  this subdivision, was less than the legal regulated
 rent, such increase to the legal regulated rent shall not  exceed:  five
 percent  of  the previous legal regulated rent if the last vacancy lease
 commenced less than two years ago; ten percent  of  the  previous  legal
 regulated rent if the last vacancy lease commenced less than three years
 ago;  fifteen  percent  of the previous legal regulated rent if the last
 vacancy lease commenced less than four years ago; twenty percent of  the
 previous  legal  regulated rent if the last vacancy lease commenced four
 or more years ago. In addition, if the  legal  regulated  rent  was  not
 increased  with  respect  to  such  housing accommodation by a permanent
 vacancy allowance within eight years prior to a vacancy  lease  executed
 on  or  after  the effective date of this paragraph, the legal regulated
 rent may be further increased by an amount equal to the product  result-
 ing from multiplying such previous legal regulated rent by six-tenths of
 one  percent and further multiplying the amount of rent increase result-
 ing therefrom by the greater of (A) the number of years since the  impo-
 sition  of  the last permanent vacancy allowance, or (B) if the rent was
 not increased by a permanent vacancy allowance since the housing  accom-
 modation  became  subject to this chapter, the number of years that such
 housing accommodation has been subject to this chapter. Provided that if
 the previous legal regulated rent was less than  three  hundred  dollars
 the total increase shall be as calculated above plus one hundred dollars
 per  month. Provided, further, that if the previous legal regulated rent
 was at least three hundred dollars and no more than five hundred dollars
 in no event shall the total increase pursuant to this paragraph be  less
 than  one  hundred  dollars per month. Such increase shall be in lieu of
 any allowance authorized for the one or two year renewal component ther-
 eof, but shall be in addition to any other increases authorized pursuant
 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

 A. 4401                            14
 
 new furniture or furnishings provided in or to the housing accommodation
 pursuant  to this section. The increase authorized in this paragraph may
 not be implemented more than one time in  any  calendar  year,  notwith-
 standing the number of vacancy leases entered into in such year.
   (6)  provides  criteria whereby the commissioner may act upon applica-
 tions by owners for increases in  excess  of  the  level  of  fair  rent
 increase  established under this law provided, however, that such crite-
 ria shall provide [(a)], as to hardship applications, for a finding that
 the level of fair rent increase is not sufficient to enable the owner to
 maintain approximately the same average annual net income  (which  shall
 be  computed  without regard to debt service, financing costs or manage-
 ment fees) for the three year period ending on or within six  months  of
 the  date  of  an application pursuant to such criteria as compared with
 annual net income, which prevailed on the average over the period  nine-
 teen  hundred  sixty-eight  through nineteen hundred seventy, or for the
 first three years of operation if the building was completed since nine-
 teen hundred sixty-eight or for the first three  fiscal  years  after  a
 transfer of title to a new owner provided the new owner can establish to
 the  satisfaction  of  the commissioner that he or she acquired title to
 the building as a result of a bona fide sale of the entire building  and
 that  the new owner is unable to obtain requisite records for the fiscal
 years nineteen hundred  sixty-eight  through  nineteen  hundred  seventy
 despite  diligent  efforts to obtain same from predecessors in title and
 further provided that the new owner can provide financial data  covering
 a  minimum  of  six  years under his or her continuous and uninterrupted
 operation of the building to meet the three year to three  year  compar-
 ative  test  periods herein provided[; and (b) as to completed building-
 wide major capital improvements, for a finding  that  such  improvements
 are deemed depreciable under the Internal Revenue Code and that the cost
 is  to  be amortized over an eight-year period for a building with thir-
 ty-five or fewer housing accommodations, or a  nine-year  period  for  a
 building  with  more  than  thirty-five  housing accommodations, for any
 determination issued by the division of housing  and  community  renewal
 after  the  effective  date  of  the  rent  act of 2015, based upon cash
 purchase price exclusive of interest or service charges].  Notwithstand-
 ing anything to the contrary  contained  herein,  no  hardship  increase
 granted pursuant to this paragraph shall, when added to the annual gross
 rents,  as  determined  by  the commissioner, exceed the sum of, (i) the
 annual operating expenses, (ii) an allowance for management services  as
 determined  by  the  commissioner,  (iii)  actual  annual  mortgage debt
 service (interest and amortization) on its  indebtedness  to  a  lending
 institution,  an  insurance  company,  a retirement fund or welfare fund
 which is operated under the supervision of the banking or insurance laws
 of the state of New York or the United States, and (iv) eight  and  one-
 half  percent  of  that portion of the fair market value of the property
 which exceeds the unpaid principal amount of the  mortgage  indebtedness
 referred  to  in subparagraph (iii) of this paragraph. Fair market value
 for the purposes of this paragraph shall be six times the  annual  gross
 rent.  The  collection  of  any  increase in the stabilized rent for any
 apartment 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 incre-
 ments and added to the stabilized rent as established or set  in  future
 years;

 A. 4401                            15
 
   §  11.  Subdivision  f of section 26-512 of the administrative code of
 the city of New York, as added by chapter 116 of the laws  of  1997,  is
 amended to read as follows:
   f.  Notwithstanding  any  provision of this law to the contrary in the
 case where all tenants named in a lease have permanently vacated a hous-
 ing accommodation and a family member of such tenant or tenants is enti-
 tled to and executes a renewal lease for the  housing  accommodation  if
 such accommodation continues to be subject to this law after such family
 member  vacates,  on  the occurrence of such vacancy the legal regulated
 rent shall be increased by a sum equal to the allowance then  in  effect
 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
 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  pursuant  to
 section  26-511  of  this  law and shall be applicable in like manner to
 each second subsequent succession.
   § 12. This act shall take effect immediately; provided that:
   (a) 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 same
 date as such law expires and shall not affect the expiration of such law
 as provided in subdivision 2 of section 1 of chapter 274 of the laws  of
 1946;
   (b)  the  amendments  to  sections  6  and  10 of the emergency 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 expires and shall
 not affect the expiration of such act as provided in section 17 of chap-
 ter 576 of the laws of 1974;
   (c) the amendments to sections 26-403.2, 26-405 and 26-407 of the city
 rent and rehabilitation law made by sections six, seven, eight and  nine
 of  this  act  shall remain in full force and effect only as long as the
 public emergency requiring the regulation  and  control  of  residential
 rents and evictions continues, as provided in subdivision 3 of section 1
 of the local emergency housing rent control act;
   (d)  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  ten  of
 this act shall expire on the same date as such law expires and shall not
 affect  the  expiration  of such law as provided under section 26-520 of
 such law;
   (e) 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 eleven of
 this act shall expire on the same date as such law expires and shall not
 affect the expiration of such law as provided under  section  26-520  of
 such law; and
   (f)  effective  immediately,  the addition, amendment and/or repeal of
 any rule or regulation necessary for the implementation of this  act  on
 its  effective date are authorized and directed to be made and completed
 on or before such effective date.