S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4099
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 31, 2025
                                ___________
 
 Introduced by Sens. PARKER, JACKSON, SEPULVEDA -- read twice and ordered
   printed, and when printed to be committed to the Committee on Housing,
   Construction and Community Development
 
 AN  ACT  to  amend  the administrative code of the city of New York, the
   emergency tenant protection act of nineteen seventy-four and the emer-
   gency housing rent control law, in relation  to  inspection  of  major
   capital  improvements  for  which  rent increases are requested and in
   relation to extending the provisions of the rent stabilization law
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
 26-405 of the administrative code of the city of New York, as amended by
 section  27  of  part Q of chapter 39 of the laws of 2019, is amended to
 read as follows:
   (g) There has been since July first, nineteen hundred seventy, 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.  The
 temporary  increase  based  upon  a major capital improvement under this
 subparagraph for any order of the commissioner issued after [the  effec-
 tive  date  of  the  chapter  of  the laws of two thousand nineteen that
 amended this subparagraph] JUNE 14, 2019 shall be in  an  amount  suffi-
 cient to amortize the cost of the improvements pursuant to this subpara-
 graph  [(g)] 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. Tempo-
 rary major capital improvement increases shall be  collectible  prospec-
 tively on the first day of the first month beginning sixty days from the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04468-01-5
              

 S. 4099                             2
 
 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 temporary major capital improvement increase to the legal
 regulated rent.  NO LANDLORD SHALL DENY ACCESS TO A  PROFESSIONAL  ENGI-
 NEER  LICENSED  TO  PRACTICE  IN  THE  STATE OF NEW YORK OR A REGISTERED
 ARCHITECT LICENSED TO PRACTICE IN THE STATE OF NEW  YORK  HIRED  BY  ANY
 TENANT,  TENANTS  OR  TENANT  ASSOCIATION  REPRESENTING  TENANTS FOR THE
 PURPOSE OF CONDUCTING AN INSPECTION OF A MAJOR CAPITAL  IMPROVEMENT  FOR
 WHICH AN APPLICATION FOR ADJUSTMENT OF MAXIMUM RENT HAS BEEN FILED. SUCH
 INSPECTION  SHALL  BE  CONDUCTED AFTER NOTICE TO THE LANDLORD AND DURING
 NORMAL BUSINESS HOURS. SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION
 WITH THE CITY RENT AGENCY FOR CONSIDERATION IN THE DETERMINATION OF SUCH
 APPLICATION. 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
   § 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-
 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]  THEY  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  predeces-
 sors in title and further provided that the new owner can provide finan-
 cial  data  covering  a  minimum  of  six years under [his or her] THEIR
 continuous and uninterrupted operation of the building to meet the three
 year to three year comparative 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
 S. 4099                             3
 
 a building with thirty-five or fewer housing accommodations, or a twelve
 and one-half-year period for a building with more than thirty-five hous-
 ing  accommodations,  for  any  determination  issued by the division of
 housing and community renewal after [the effective date of the the chap-
 ter  of  the  laws of two thousand nineteen that amended this paragraph]
 JUNE 14, 2019 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  retro-
 active  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  temporary major capital improvement increase to the legal regu-
 lated rent.  NO LANDLORD SHALL DENY ACCESS TO  A  PROFESSIONAL  ENGINEER
 LICENSED  TO PRACTICE IN THE STATE OF NEW YORK OR A REGISTERED ARCHITECT
 LICENSED TO PRACTICE IN THE STATE OF  NEW  YORK  HIRED  BY  ANY  TENANT,
 TENANTS  OR  TENANT  ASSOCIATION REPRESENTING TENANTS FOR THE PURPOSE OF
 CONDUCTING AN INSPECTION OF A MAJOR CAPITAL  IMPROVEMENT  FOR  WHICH  AN
 APPLICATION  FOR  ADJUSTMENT  OF  MAXIMUM  RENT  HAS  BEEN  FILED.  SUCH
 INSPECTION SHALL BE CONDUCTED AFTER NOTICE TO THE  LANDLORD  AND  DURING
 NORMAL BUSINESS HOURS. SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION
 WITH  THE  STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL FOR CONSIDER-
 ATION IN THE DETERMINATION  OF  SUCH  APPLICATION.  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 proceeding in which to answer or reply. The state divi-
 sion  of  housing  and  community  renewal  shall provide any responding
 tenant with the reasons for the division's approval or  denial  of  such
 application.  Notwithstanding 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  indebt-
 edness 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 mort-
 gage 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
 S. 4099                             4
 
 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 increments and added to the stabilized rent as established or
 set in future years;
   § 3. Paragraph 3 of subdivision d of section 6 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 26 of part Q of
 chapter 39 of the laws of 2019, is amended to read as follows:
   (3) there has been since January first, nineteen hundred  seventy-four
 a major capital improvement essential for the preservation, energy effi-
 ciency,   functionality,  or  infrastructure  of  the  entire  building,
 improvement of the structure including heating,  windows,  plumbing  and
 roofing,  but  shall  not be for operation costs or unnecessary cosmetic
 improvements. An adjustment under this paragraph shall be in  an  amount
 sufficient  to  amortize  the  cost of the improvements pursuant to this
 paragraph over a twelve-year period for a building with  thirty-five  or
 fewer  housing  accommodations,  or  a  twelve and one-half period for a
 building with more than thirty-five housing accommodations 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, for any determination issued by the
 division of housing and community renewal after [the effective  date  of
 the chapter of the laws of two thousand nineteen that amended this para-
 graph]  JUNE  14,  2019.  Temporary  major capital improvement increases
 shall be collectable 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  improve-
 ment  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 temporary major capital improvement
 increase to the legal regulated rent.  NO LANDLORD SHALL DENY ACCESS  TO
 A PROFESSIONAL ENGINEER LICENSED TO PRACTICE IN THE STATE OF NEW YORK OR
 A  REGISTERED  ARCHITECT  LICENSED  TO PRACTICE IN THE STATE OF NEW YORK
 HIRED BY ANY TENANT, TENANTS OR TENANT ASSOCIATION REPRESENTING  TENANTS
 FOR  THE PURPOSE OF CONDUCTING AN INSPECTION OF A MAJOR CAPITAL IMPROVE-
 MENT FOR WHICH AN APPLICATION FOR ADJUSTMENT OF MAXIMUM  RENT  HAS  BEEN
 FILED.  SUCH  INSPECTION SHALL BE CONDUCTED AFTER NOTICE TO THE LANDLORD
 AND DURING NORMAL BUSINESS HOURS. SUCH TENANT MAY FILE THE REPORT OF THE
 INSPECTION WITH THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL  FOR
 CONSIDERATION  IN THE DETERMINATION OF SUCH APPLICATION. Notwithstanding
 any other provision of the law, the collection of any rent increases for
 any renewal lease commencing on or after June 14, 2019, 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
   § 4.  Subparagraph 7 of the second undesignated paragraph  of    para-
 graph    (a) of  subdivision  4  of section 4 of chapter 274 of the laws
 of 1946, constituting the emergency housing  rent  control law as  sepa-
 S. 4099                             5
 
 rately  amended  by section 14 of part K of chapter 36 and section 25 of
 part Q of chapter 39 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] JUNE 14, 2019 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 thir-
 ty-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 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 retro-
 active 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 temporary major capital improvement increase to the  legal  regu-
 lated  rent.    NO LANDLORD SHALL DENY ACCESS TO A PROFESSIONAL ENGINEER
 LICENSED TO PRACTICE IN THE STATE OF NEW YORK OR A REGISTERED  ARCHITECT
 LICENSED  TO  PRACTICE  IN  THE  STATE  OF NEW YORK HIRED BY ANY TENANT,
 TENANTS OR TENANT ASSOCIATION REPRESENTING TENANTS FOR  THE  PURPOSE  OF
 CONDUCTING  AN  INSPECTION  OF  A MAJOR CAPITAL IMPROVEMENT FOR WHICH AN
 APPLICATION  FOR  ADJUSTMENT  OF  MAXIMUM  RENT  HAS  BEEN  FILED.  SUCH
 INSPECTION  SHALL  BE  CONDUCTED AFTER NOTICE TO THE LANDLORD AND DURING
 NORMAL BUSINESS HOURS. SUCH TENANT MAY FILE THE REPORT OF THE INSPECTION
 WITH THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL  FOR  CONSIDER-
 ATION  IN  THE  DETERMINATION  OF  SUCH APPLICATION. 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;
 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 proceeding 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; or
   §  5.    This  act  shall take effect on the one hundred twentieth day
 after it shall have become a law; provided, however, that the amendments
 to section 26-405 of the  city  rent  and  rehabilitation  law  made  by
 section  one  of  this act shall remain in full force and effect only so
 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
 S. 4099                             6
 
 provided  further  that  the  amendments  to  section 26-511 of the rent
 stabilization law of nineteen hundred sixty-nine made by section two  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.  Effective immediately, the addition, amendment and/or  repeal
 of  any rule and regulation necessary for the implementation of this act
 on its effective date are authorized to be made on or before such effec-
 tive date.