S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2977
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 26, 2023
                                ___________
 
 Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT  to  amend  the administrative code of the city of New York, the
   emergency tenant protection act of nineteen seventy-four and the emer-
   gency housing rent control law, in relation to the amount of  time  to
   submit supporting documentation for major capital improvements
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subdivision  g  of  section  26-405  of  the
 administrative  code  of the city of New York is amended by adding a new
 subparagraph (g-1) to read as follows:
   (G-1) NO INCREASE FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE  GRANTED  TO
 ANY  LANDLORD  OR  PROPERTY  OWNER,  UNLESS AN APPLICATION INCLUDING ALL
 NECESSARY DOCUMENTATION ARE SUBMITTED WITHIN  ONE  HUNDRED  TWENTY  DAYS
 AFTER  THE COMPLETION OF THE NEW INSTALLATION OR IMPROVEMENT OR IMPROVE-
 MENTS; OR
   § 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
 tive code of the city of New York, as separately amended by  section  12
 of  part  K  of chapter 36 and section 28 of part Q of chapter 39 of the
 laws of 2019, is amended to read as follows:
   (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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02896-01-3
              

 S. 2977                             2
 
 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 a twelve-year period for a building with thir-
 ty-five or fewer housing accommodations, or a twelve  and  one-half-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 [the] chapter of the laws of two
 thousand nineteen that amended this paragraph and shall be removed  from
 the  legal regulated rent thirty years from the date the increase became
 effective inclusive of any increases  granted  by  the  applicable  rent
 guidelines board. Temporary major capital improvement increases shall be
 collectible  prospectively on the first day of the first month beginning
 sixty days from the date of mailing notice of approval  to  the  tenant.
 Such  notice  shall  disclose the total monthly increase in rent and the
 first month in which the tenant would be required to pay  the  temporary
 increase. An approval for a temporary major capital improvement increase
 shall  not  include retroactive payments. The collection of any increase
 shall not exceed two 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 estab-
 lished or set in future years.  Upon vacancy, the landlord may  add  any
 remaining balance of the temporary major capital improvement increase to
 the  legal  regulated  rent.  Notwithstanding any other provision of the
 law, for any renewal lease commencing on or after  June  14,  2019,  the
 collection  of  any rent increases due to any major capital improvements
 approved on or after June 16, 2012 and before June 16,  2019  shall  not
 exceed  two  percent in any year for any tenant in occupancy on the date
 the major capital improvement was approved or based upon  cash  purchase
 price exclusive of interest or service charges. Where an application for
 a  temporary major capital improvement increase has been filed, a tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing in which to answer or reply.  The  state  division  of  housing  and
 community  renewal  shall provide any responding tenant with the reasons
 for the division's approval or denial of such application. 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
 S. 2977                             3
 
 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.  NO  INCREASE  FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE GRANTED TO
 ANY LANDLORD OR PROPERTY OWNER,  UNLESS  AN  APPLICATION  INCLUDING  ALL
 NECESSARY  DOCUMENTATION  IS  SUBMITTED  WITHIN  ONE HUNDRED TWENTY DAYS
 AFTER THE COMPLETION OF THE NEW INSTALLATION OR IMPROVEMENT OR  IMPROVE-
 MENTS;
   §  3.  Subdivision  b  of section 4 of section 4 of chapter 576 of the
 laws of 1974, constituting the emergency tenant protection act of  nine-
 teen  seventy-four,  is  amended  by adding a new paragraph 4 to read as
 follows:
   (4) NO INCREASE FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE GRANTED TO ANY
 LANDLORD OR PROPERTY OWNER, UNLESS AN APPLICATION INCLUDING  ALL  NECES-
 SARY DOCUMENTATION IS SUBMITTED WITHIN ONE HUNDRED TWENTY DAYS AFTER THE
 COMPLETION OF THE NEW INSTALLATION OR IMPROVEMENT OR IMPROVEMENTS;
   §  4. Subparagraph 7 of the second undesignated paragraph of paragraph
 (a) of subdivision 4 of section 4 of chapter 274 of the  laws  of  1946,
 constituting  the  emergency  housing  rent  control  law, as separately
 amended by section 25 of part Q of chapter 39 and section 14 of  part  K
 of chapter 36 of the laws of 2019, is amended to read as follows:
   (7)  there has been since March first, nineteen hundred fifty, a major
 capital improvement essential for the preservation,  energy  efficiency,
 functionality,  or infrastructure of the entire building, improvement of
 the structure including heating,  windows,  plumbing  and  roofing,  but
 shall not be for operational costs or unnecessary cosmetic improvements;
 which  for any order of the commissioner issued after the effective date
 of the chapter of the laws of two thousand nineteen  that  amended  this
 paragraph the cost of such improvement shall be amortized over a twelve-
 year  period  for  buildings with thirty-five or fewer units or a twelve
 and one-half year period for buildings with more than thirty-five units,
 and shall be removed from the legal regulated rent thirty years from the
 date the increase became effective inclusive of any increases granted by
 the applicable rent guidelines board. Temporary major  capital  improve-
 ment  increases  shall  be collectible prospectively on the first day of
 the first month beginning sixty days from the date of mailing notice  of
 approval  to  the  tenant.  Such notice shall disclose the total monthly
 increase in rent and the first  month  in  which  the  tenant  would  be
 required  to  pay  the  temporary  increase. An approval for a temporary
 major  capital  improvement  increase  shall  not  include   retroactive
 payments. The collection of any increase shall not exceed two 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.
 Upon vacancy, the landlord may add any remaining balance of  the  tempo-
 rary  major  capital  improvement  increase to the legal regulated rent.
 Notwithstanding any other provision of the law, for  any  renewal  lease
 S. 2977                             4
 
 commencing  on  or  after  June  14,  2019,  the  collection of any rent
 increases due to any major capital improvements  approved  on  or  after
 June  16,  2012 and before June 16, 2019 shall not exceed two percent in
 any  year  for  any  tenant  in  occupancy on the date the major capital
 improvement was approved; provided, however, where an application for  a
 temporary  major  capital  improvement increase has been filed, a tenant
 shall have sixty days from the date of mailing of a notice of a proceed-
 ing in which to answer or reply.  The  state  division  of  housing  and
 community  renewal  shall provide any responding tenant with the reasons
 for the division's approval or denial of such application.  NO  INCREASE
 FOR MAJOR CAPITAL IMPROVEMENTS SHALL BE GRANTED TO ANY LANDLORD OR PROP-
 ERTY  OWNER, UNLESS AN APPLICATION INCLUDING ALL NECESSARY DOCUMENTATION
 IS SUBMITTED WITHIN ONE HUNDRED TWENTY DAYS AFTER THE COMPLETION OF  THE
 NEW INSTALLATION OR IMPROVEMENT OR IMPROVEMENTS; or
   § 5. This act shall take effect immediately; provided that:
   a.  the  amendments  to  section 26-405 of the city rent and rehabili-
 tation law made by section one 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; and
   b. the amendments to section 26-511 of the administrative code of  the
 city  of  New  York made by section two of this act shall not affect the
 expiration of such section and shall be deemed to expire therewith.