The proposed regulation was published in the State Register on August 1st, and there will be a public hearing in New York City on Monday, September 24, 2007. Please come to show your support!

Click here for some of the testimony offered at the September 24th hearing in Manhattan.

Pursuant to Section 202-d of the State Administrative Procedure Act (SAPA), the following Agenda sets forth a list and brief description of the subject matter of regulatory amendments to 9 NYCRR which the Division of Housing and Community Renewal (DHCR) is presently considering proposing during 2007.

The DHCR's regulatory plans are subject to change, and it reserves the right to add to, delete from, or modify items on the Agenda without further notice. SAPA Section 202-d does not preclude the DHCR from proposing a rule for adoption that is not described in this Agenda, nor is the DHCR required to propose any rule for adoption that is described in this Agenda.

This notice is also intended to provide small businesses, local governments, and public and private interests in rural areas with the opportunity to participate in the rule making process, as provided for in SAPA Section 202-b and 202-bb.

AGENCY CONTACT PERSON:

Information may be obtained, and written comments may be submitted for consideration, by contacting:

Francis De Martini
Office of Legal Affairs
DHCR
25 Beaver Street
New York, New York 10004
(212) 480-7471

Owners and tenants may apply for an adjustment of the initial legal regulated rent based on unique and peculiar circumstances when a unit first enters the rent stabilized program under the Emergency Tenant Protection Act. However, previous regulation under the Private Housing Finance Law or other State or Federal regulation does not, in and of itself, constitute unique and peculiar circumstances. Any economic loss predicated by an owner's withdrawal from such prior alternative governmental regulation can be addressed through the filing of a hardship application.

9 NYCRR 2522 RENT ADJUSTMENTS

Owners and tenants may apply for an adjustment of the initial legal regulated rent based on unique or peculiar circumstances when a unit first enters the rent stabilization program. Previous regulation under the Private Housing Finance Law (PHFL) or other State or Federal regulation does not, in and of itself, constitute unique and peculiar circumstances. Any economic loss predicated by an owner's withdrawal from such prior alternative governmental regulation can be addressed through the filing of a hardship application.

THIS AGENDA WAS PREPARED AND SUBMITTED BY:

Gary R. Connor
General Counsel
25 Beaver Street
New York, New York 10004
Telephone Number: (212) 480-6709

DATE: July 27, 2007

Last updated on 07/27/07

Closes Regulatory Loophole to Protect Tens of Thousands of Rent Stabilized Apartments

Governor Eliot Spitzer today reaffirmed his commitment to affordable housing by closing a regulatory loophole that would have allowed tens of thousands of rent stabilized apartments to be removed from the State's affordable housing portfolio.

"Maintaining and enhancing affordable housing is critical to the quality of life of New Yorkers and to the support of a growing economy," Governor Spitzer said.

By closing the "unique and peculiar" loophole, Governor Spitzer has ensured that landlords leaving the Mitchell-Lama program, or other government-sponsored affordable housing programs, will not be allowed to immediately and drastically increase their rents to market rate.

The unique and peculiar provision allows landlords to apply for rent increases for apartments that have artificially low rents for "unique and peculiar" reasons. For example, if a landlord had a family member as a tenant, or a building manager who enjoyed a lower than normal rent as part of his compensation, the landlord could use the unique and peculiar clause to increase the apartment's rent when they were re-rented.

Some landlords, however, have tried to use the loophole in order to bring apartments leaving the Mitchell-Lama or other regulation programs immediately up to market rate. They have claimed that their decision to end their participation in Mitchell-Lama, or other government program, qualifies as unique and peculiar circumstances.

"Clearly, the unique and peculiar provision was not meant to be interpreted and used to remove stabilization safeguards from apartments leaving Mitchell Lama or other rent-regulation programs," Spitzer said.

Initially, the new regulations will apply to 24 applications that are currently pending before the State Division of Housing and Community Renewal (DHCR), which would have dramatically increased the rents of nearly 5,000 affordable apartments.

Deborah VanAmerongen, Commissioner of DHCR, said "If the Governor had not taken this action today, and closed the unique and peculiar loophole, it could have been used to remove tens of thousands of apartments from the affordable range in the coming years."

Dina Levy, director of Organizing and Policy for the Urban Homeownership Assistance Board (UHAB) said, "Some landlords have attempted to get around the rent stabilization laws by manipulating the so-called unique and peculiar loophole, attempting to saddle low and moderate income tenants with totally unreasonable and unfair rent increases. Governor Spitzer has done the right thing by closing the loophole and protecting the rights of thousands of tenants."

Bertha Lewis, executive director of NY Association of Community Organizations for Reform Now (ACORN) said "By closing this loophole, landlords will not be able to pull their buildings out of rent stabilization when leaving the Mitchell-Lama program in violation of New York's rent laws. We commend Governor Spitzer and Commissioner VanAmerongen for their leadership on behalf of Mitchell-Lama tenants."

Michael McKee, a founder of NYS Tenants and Neighbors Coalition, said "We are thankful to Governor Spitzer and Commissioner VanAmerongen for this policy decision, which will help tens of thousands of tenants in former Mitchell-Lama buildings sleep more soundly tonight."

Since taking office, Spitzer has taken significant steps toward preserving and enhancing the State's affordable housing stock.

Earlier this year, he proposed changes to the luxury decontrol statute, which was first established in 1993 to protect rent regulation for ordinary tenants while allowing for deregulation of high-rent "luxury" apartments occupied by the wealthiest New Yorkers.

"In the fourteen years since the luxury decontrol system was put in place, rents have risen dramatically while the decontrol threshold has not changed," Spitzer said. "Increasing the threshold from $2,000 to $2,800 will protect nearly 75,000 rent-stabilized units from decontrol in the short term and many more in the long term."