Reduces the amount of maximum rent increase collectible in one year.
TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to reducing the amount of maximum rent increase collectible in one year
PURPOSE OR GENERAL IDEA OF BILL: This bill reduces the maximum annual rent increase for rent controlled apartments in New York City from 7% percent to 3 percent.
SUMMARY OF SPECIFIC PROVISIONS: Paragraph 5 of subdivision a of Section 26-405 of the New York City Rent Control Law is amended to limit automatic annual rent increases for rent controlled apartments to three percent.
JUSTIFICATION: The New York City Rent Control Law was amended in 1971 to create the Maximum Base Rent system of automatic annual rent increases. Maximum Base Rents (MBRs) are established every two years by the agency administering rent controls. The MBRs establish ceilings for rent increases. Within the MBR ceilings, rents are increased every year by 7% percent over the previous maximum collectible rent. Other additional rent increases are permitted for such things as major capital improvements or the installation of additional equipment in an apartment. The MBR system was created during a period of unusually high national inflation. The annualized inflation rate in the United States during the period 1970-1980 was 7.81%. In contrast, the annualized inflation rate during the years 2000-2008 was 2.83%. This legislation is necessary to bring the automatic annual rent increases for rent controlled apartments back into a reasonable, relationship with current rates of inflation. Annual 7% percent rent increases far exceed the rent increases authorized in New York City during recent years for the parallel rent stabilization program. In addition, rent controlled apartments are generally occupied by elderly residents living on fixed incomes. The outdated MBR system's automatic 7 1/2 percent annual rent increases are a major hardship for. such tenants and are no longer justified by current costs for the maintenance and operation of their housing.
LEGISLATIVE HISTORY: 2009-2010: S.6138
EFFECTIVE DATE: Immediately, with provisions.
STATE OF NEW YORK ________________________________________________________________________ 3171 2013-2014 Regular Sessions IN SENATE January 31, 2013 ___________Introduced by Sen. KRUEGER -- 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, in relation to reducing the amount of maximum rent increase collectible in one year THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 5 of subdivision a of section 26-405 of the administrative code of the city of New York is amended to read as follows: (5) Where a maximum rent established pursuant to this chapter on or after January first, nineteen hundred seventy-two, is higher than the previously existing maximum rent, the landlord may not collect more than
[seven and one-half percentum]THREE PERCENT increase from a tenant in occupancy on such date in any one year period, provided however, that where the period for which the rent is established exceeds one year, regardless of how the collection thereof is averaged over such period, the rent the landlord shall be entitled to receive during the first twelve months shall not be increased by more than [seven and one-half percentum]THREE PERCENT over the previous rent and additional annual rents shall not exceed [seven and one-half percentum]THREE PERCENT of the rent paid during the previous year. Notwithstanding any of the fore- going limitations in this paragraph five, maximum rent shall be increased if ordered by the agency pursuant to subparagraphs (d), (e), (f), (g), (h), (i), (k), (l), (m) or (n) of paragraph one of subdivision g of this section. Commencing January first, nineteen hundred eighty, rent adjustments pursuant to subparagraph (n) of paragraph one of subdi- vision g of this section shall be excluded from the maximum rent when computing the [seven and one-half percentum]THREE PERCENT increase authorized by this paragraph five. Where a housing accommodation isEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00871-01-3 S. 3171 2
vacant on January first, nineteen hundred seventy-two, or becomes vacant thereafter by voluntary surrender of possession by the tenants, the maximum rent established for such accommodations may be collected. S 2. This act shall take effect immediately; provided that the amend- ments 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 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.