Bill S7696-2013

Precludes owners from collecting further rent increases if they fail to pay their housing unit fee

Precludes owners from collecting further rent increases if they fail to pay their housing unit fee.

Details

Actions

  • May 30, 2014: REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT

Memo

BILL NUMBER:S7696

TITLE OF BILL: An act to amend the administrative code of the city of New York and the emergency tenant protection act of nineteen seventy-four, in relation to housing unit fees

PURPOSE: The bill would ensure that the New York State Division of Housing and Community Renewal (DHCR) has sufficient resources to administer and enforce the rent regulation laws. This legislation would increase the annual fee paid by owners of rent stabilized apartments in New York City from $10 per unit to $30 per unit, and dedicate all increased revenues to the DHCR's Office of Rent Administration (ORA) and Tenant Protection Unit (TPU).

SUMMARY OF PROVISIONS:

Section 1 amends section 26-517.1 of the Administrative Code of the City of New York by increasing the annual fee collected by the New York City Department of Finance for each registered rent stabilized unit from $10 to $30.

Section 2 amends subdivisions c of section 8 of the Emergency Tenant Protection Act of 1974 by increasing the annual fee collected by the New York City Department of Finance for each registered rent stabilized unit from $10 to $30. All revenues collected by the City Department of Finance are transferred to the DHCR to cover the costs of administering the rent regulation laws. Subdivision d of Section 8 of the Emergency Tenant Protection Act of 1974 is amended to authorize the City of New York to commence collection action against any building owner that fails to pay the $30 per unit annual assessment.

Section 3 establishes that all increased revenues transferred each year to the Commissioner of the DHCR shall be equally divided between the DHCR's ORA and TPU, and includes a maintenance of effort requirement for existing funding of the ORA and TPU.

Section 4 provides for the effective date.

JUSTIFICATION: The DHCR has sole responsibility for administering and enforcing New York's rent regulation laws which enable almost two million people to live in safe, stable, and affordable housing. The agency requires significant additional resources to effectively fulfill its statutory responsibilities. Due to substantial staff reductions and repeated budget cuts over the last two decades, the DHCR simply does not have the capacity it needs respond to complaints within reasonable timeframes, prevent fraud, or proactively investigate the majority of potential violations.

Tenant advocates, building owners, and attorneys all regularly express great frustration with the time periods they are forced to wait for DHCR to respond to applications and complaints. Tenants and building owners are frequently forced to wait a minimum of a year for the ORA to process even the most basic cases, and complex cases frequently take five years or longer to be concluded. Many report that they do not even attempt to file cases with the agency because they know they will have to wait years to receive a determination. Affordable housing advocates and tenant attorneys have repeatedly documented that

thousands of desperately needed rent regulated apartments are illegally deregulated each year, and countless tenants are overcharged, because of DHCR's limited resources.

In recent years, the leadership of DHCR undertaken a number of important reforms to improve its administration of the rent laws. The most significant of these reforms was the establishment of the TPU in 2011 which is exclusively focused on protecting tenants' rights and proactively enforcing compliance. In its first two years, the TPU reregistered more than 28,000 rent stabilized apartments, initiated comprehensive investigations of building owners suspected of systematically overcharging tenants, and reached major settlements with landlords who violated harassment and discrimination laws. In order to build on these accomplishments, the TPU must have increased and dependable resources. The TPU has less than two dozen employees to and is currently funded solely with agency reappropriations. Due to its limited staff, the TPU has only been able to investigate a small fraction of the cases brought to its attention. It is simply impossible for even the most dedicated employees to expeditiously and fairly enforce laws impacting the lives of almost two million residents with such severe limitations.

Historically, the cost of administering and enforcing the rent laws has been funded almost exclusively by the revenue generated by the annual per unit fee paid by owners of rent stabilized apartments in New York City. An annual fee is collected by the New York City Department of Finance from building owners for each rent stabilized apartment and then transferred to the State DHCR. However, the annual unit fee of $10 has not increased since 1984 when administration of all rent controlled and rent stabilized units was transferred to the state. Simply increasing the annual fee from $10 per apartment to $30 per apartment generate almost $20 million each year for the ORA and TPU without placing an onerous burden on building owners or tenants. The higher unit fee would be factored into building owners' costs each year when the New York City Rent Guidelines Board considers rent increases, and any small rent increase that resulted would be far outweighed by the benefits of significantly enhanced and efficient services from the ORA and TPU.

LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 7696 IN SENATE May 30, 2014 ___________
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 and the emergency tenant protection act of nineteen seventy-four, in relation to housing unit fees THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision a of section 26-517.1 of the administrative code of the city of New York, as added by local law number 95 of the city of New York for the year 1985, is amended to read as follows: a. The [Department] DEPARTMENT of [Finance] FINANCE shall collect from the owner of each housing accommodation registered pursuant to [Section] SECTION 26-517 of this [law] CHAPTER an annual fee in the amount of [ten] THIRTY dollars per year for each unit subject to this law, in order to defray costs incurred by the city pursuant to subdivision c of section eight of the emergency tenant protection act of nineteen hundred seventy-four. S 2. Subdivisions c and d of section 8 of section 4 of chapter 576 of the laws of 1974 constituting the emergency tenant protection act of nineteen seventy-four, subdivision c as amended by section 5 of part Z of chapter 56 of the laws of 2010 and subdivision d as amended by chap- ter 116 of the laws of 1997, are amended to read as follows: c. Whenever a city having a population of one million or more has determined the existence of an emergency pursuant to section three of this act, the provisions of this act and the New York city rent stabili- zation law of nineteen hundred sixty-nine shall be administered by the state division of housing and community renewal as provided in the New York city rent stabilization law of nineteen hundred sixty-nine, as amended, or as otherwise provided by law. The costs incurred by the state division of housing and community renewal in administering such regulation shall be paid by such city. All payments for such adminis- tration shall be transmitted to the state division of housing and commu- nity renewal as follows: on or after April first of each year commencing
with April, nineteen hundred eighty-four, the commissioner of housing and community renewal shall determine an amount necessary to defray the division's anticipated annual cost, and one-quarter of such amount shall be paid by such city on or before July first of such year, one-quarter of such amount on or before October first of such year, one-quarter of such amount on or before January first of the following year and one- quarter of such amount on or before March thirty-first of the following year. After the close of the fiscal year of the state, the commissioner shall determine the amount of all actual costs incurred in such fiscal year and shall certify such amount to such city. If such certified amount shall differ from the amount paid by the city for such fiscal year, appropriate adjustments shall be made in the next quarterly payment to be made by such city. In the event that the amount thereof is not paid to the commissioner as herein prescribed, the commissioner shall certify the unpaid amount to the comptroller, and the comptroller shall, to the extent not otherwise prohibited by law, withhold such amount from any state aid payable to such city. In no event shall the amount imposed on the owners exceed [ten] THIRTY dollars per unit per year. d. The failure to pay the prescribed assessment not to exceed [ten] THIRTY dollars per unit for any housing accommodation subject to this act or the New York city rent stabilization law of nineteen hundred sixty-nine shall constitute a charge due and owing such city, town or village which has imposed an annual charge for each such housing accom- modation pursuant to subdivision b of this section. Any such city, town or village shall be authorized to provide for the enforcement of the collection of such charges by commencing an action or proceeding for the recovery of such fees or by the filing of a lien upon the building and lot. Such methods for the enforcement of the collection of such charges shall be the sole remedy for the enforcement of this section. S 3. The increased revenues payable each year to the commissioner of the state division of housing and community renewal pursuant to this act shall be divided equally by the commissioner between the office of rent administration and the office of the tenant protection unit within the division of housing and the community renewal and shall be utilized by the commissioner in addition to and not in substitution for the levels of funding from all sources provided to the office of rent adminis- tration and the office of the tenant protection unit on the effective date of this act. S 4. This act shall take effect immediately; provided that the amend- ments to section 26-517.1 of chapter 4 of title 26 of the administrative code of the city of New York made by section one 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 provided further that the amendments to section 8 of the emergency tenant protection act of nineteen seventy-four made by section two 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 chapter 576 of the laws of 1974.

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