2. 9 NYCRR § 2100.2(c), (d), and (g) amending definitions of the terms “Rent,” “Maximum Rent,” and “Tenant”.

3. 9 NYCRR § 2100.3(k) and (l) adds definitions of the terms “Common Ownership” and “DHCR”.

4. 9 NYCRR § 2100.9(v) repeals high rent vacancy deregulation to comply with HSTPA.

5. 9 NYCRR § 2100.9(w) repeals high rent/high income deregulation to comply with HSTPA.

6. 9 NYCRR § 2100.15 amendments regarding requirements for rent receipts.

7. 9 NYCRR § 2100.18 adds language regarding the primary residency of a victim of domestic violence.

8. 9 NYCRR § 2102.1 amendments regarding the establishment of maximum rents pursuant to HSTPA.

9. 9 NYCRR § 2102.3 amendments largely mandated by HSTPA for Individual Apartment Improvements (“IAI”) and Major Capital Improvements (“MCI”). For IAIs the amendments include: written tenant consent from tenant for IAIs; required filings with DHCR supported by before and after photographs; an itemized list of work performed and the reason for such work; limits the amount the rent can be increased to 1/168th or 1/180th of the cost of the improvement depending on the number of units in the building; no more than three separate IAI increases collected over a 15-year period and the total cost of eligible improvements cannot exceed $15,000; with limited exception, all work must be done by a licensed contractor with no common ownership between the contractor and the owner; prohibition on increases based upon the installation of similar equipment or furnishings within the useful life of such new equipment or furnishings; prohibitions on increases where there are any outstanding hazardous and immediately hazardous violations at the time of installation that pertain to the subject apartment and; new IAI increases collected for the first time after June 14, 2019, are temporary and will be removed from the rent in thirty years. For MCIs, the amendments include: definition which incorporates new “green” installation; removal of MCI increases after thirty years; amortization of costs over twelve years or twelve and a half years depending on the number of units in the building, modification of the annual cap on collectability to two percent per year; a reasonable cost schedule; prohibition of rent increases due to immediately hazardous violations and hazardous violations; MCIs are no longer allowed for work done in individual apartments that is not otherwise an improvement to the entire building; and prohibition of MCIs in buildings with 35 percent or fewer rent regulated units.

10. 9 NYCRR § 2102.4(h) updates DHCR’s website address and references.

11. 9 NYCRR § 2103.4 adds a requirement that apartment registrations include an “actual, physical street address” for the owner or agent.

12. 9 NYCRR § 2104.3(a) and (c) adds the address for filing of the notice with DHCR.

13. 9 NYCRR § 2104.4 amendments of the requirements of the relocation requirements when directed by or is required pursuant to a condition for the granting of a certificate of eviction.

14. 9 NYCRR § 2104.5(a)(1), (a)(2), (b), (c)(2) requirements for recovery of a rent regulated unit for owner occupancy to comply with HSTPA.

15. 9 NYCRR § 2104.6(d) modification and clarification of requirements for establishing succession rights.

16. 9 NYCRR § 2106.1(d)(5) adds that the tenant shall have a cause of action in a court of competent jurisdiction for damages, declaratory, injunctive relief against the owner where the owner fails to use the certificate of eviction for the specified purpose.

17. 9 NYCRR § 2108.10 provides that where a code provision or applicable statute is enacted or amended during the pendency of a PAR, the determination shall be in accordance with the statute or code as it existed at the time the rent administrator’s order was issued, unless the relevant law or regulation states otherwise.

18. 9 NYCRR § 2110.2, § 2110.3, § 2110.4, § 2110.5, § 2110.6, § 2110.7 repeal of high rent/high income deregulation sections as of June 14, 2019, pursuant to HSTPA.

19. 9 NYCRR § 2110.8 is repealed as of June 14, 2019, pursuant to HSTPA and replaced with language providing that any apartment lawfully deregulated as of June 14, 2019 remains deregulated.

1. STATUTORY AUTHORITY

The Emergency Housing Rent Control Law (“RCL”), Laws of 1946, Chap 274, subdivision 4(a), as amended by the Laws of 1950, Chap. 250, as amended, as transferred to the Division of Housing and Community Renewal (DHCR) by the Laws of 1964, Chap. 244, provides the authority to the DHCR to amend the State Rent and Eviction Regulations (SRER). The Housing Stability and Tenant Protection Act of 2019, Ch.36 of the Laws of 2019 (“HSTPA”), enacted June 14, 2019, and Ch. 39 of the Laws of 2019 (“Clean-up law”) further empowered and required DHCR to promulgate rules and regulations to implement and enforce various provisions of HSTPA.

2. LEGISLATIVE OBJECTIVES

The RCL requires, because of a serious public emergency, the regulation of residential rents and evictions to prevent the exaction of unreasonable rents and rent increases and to forestall other disruptive practices that would produce threats to public health, safety and general welfare. The RCL is further designed to assure that any transition from regulation to normal market bargaining with respect to such landlords and tenants is administered with due regard to these emergency conditions. See RCL § 8581(1). DHCR is specifically authorized to promulgate regulations by RCL § 8584(4)(a) and is specifically empowered by HSTPA to promulgate regulations to implement and enforce new provisions added, as well as provisions amended or repealed by HSTPA and the accompanying Clean-up bill.

3. NEEDS AND BENEFITS

DHCR has not engaged in an extensive amendment process with respect to these regulations since 2014. As noted, in June 2019 there was a significant amendment to the rent laws by HSTPA and there has already been significant litigation interpreting those laws. In addition, DHCR has had years of experience in administration which informs this regulatory process, as does its continuing dialogue during this period with owners, tenants, and their respective advocates.

DHCR personnel have engaged in forums and meetings since the passage of HSTPA where the administration and implementation of the law was discussed.

The needs and benefits of some of the specific modifications proposed are highlighted below.

a. Individual Apartment Improvements (IAIs)

HSTPA itself mandated most of the regulatory amendments made with respect to this section.

b. Major Capital Improvements (MCIs)

These provisions are another area that HSTPA changed and directed that DHCR promulgate regulations.

c. High Rent/High Income Deregulation

HSTPA repealed the high rent/high income provisions of the rent laws with an exception with respect to the rules governing Real Property Tax Law § 421-a (16). The Clean-up law clarified that units lawfully deregulated, prior to the effective date of HSTPA, remain deregulated. Modifications to the regulations on this topic are required by HSTPA.

d. Maximum Rent

HSTPA made changes with respect to the establishment of the maximum rent. The proposed regulations reflect those changes.

e. Fuel Costs

HSTPA made prohibited fuel cost pass-alongs. The proposed regulations are amended to reflect that and any such increase to such tenant shall be null and void.

f. Succession Rights

Family members remaining in a rent-controlled unit after the vacatur of the named lease holder have the right to remain in the apartment. HSTPA made no changes to the statutory provisions regarding succession. However, DHCR has always been empowered to promulgate regulations, first by its general rent stabilization rule making authority, see, Rent Stabilization Association v. Higgins, 83 N.Y.2d 156, 608 N.Y.S.2d 930 (1993) and subsequently by Public Housing Law § 14. The regulations require contemporaneous occupancy by the family members with the named leaseholder for two years as their primary residence prior to the permanent vacatur of the named leaseholder. (9 NYCRR § 2204.6)

DHCR determined that clarification for rent-controlled tenants that the period of actual physical vacatur of the named lease holder controls. DHCR’s regulations reflect that true fraud, and an extended period of misrepresentation will not be rewarded, however, evicting long term family residents because the named leaseholder may have been in the process of moving out during the renewal period or was simply postponing an anticipated difficult and problematic interaction with their landlord over whether remaining family had the right to stay is simply too harsh a rule.

g. High Rent Vacancy Deregulation

HSTPA eliminates high rent vacancy (as well as high rent/high income) deregulation as of June 14, 2019, with the exceptions previously noted.

h. Applying changed rules at PAR

The proposed regulation provides that when a law or regulation changes during the pendency of a PAR proceeding, the rules in effect at the time the Rent Administrator (RA) makes its decision controls unless the equities or preventing undue hardship require otherwise. The regulation also allows DHCR, when a new rule requires a higher rent and is imposed, to make the increase prospective, rather than from the initiation of the RA proceeding. This rule reverses the presumptions built into the prior regulation of generally applying new rules on PAR subject to the equitable and hardship exceptions. The rule change conforms with the major implementation requirements of HSTPA based on Regina Metropolitan.

i. Actual Physical Address for Registration

Part of the requirements of the SRER is that each owner registers their building upon change in ownership. The proposed regulation requires owners to provide an actual physical address instead of utilizing a post office box address.

4. COSTS

The regulated parties are residential tenants and the owners of the rent controlled housing accommodations in which such tenants reside. There are no additional direct costs imposed on tenants or owners by these amendments as owner direct costs are capped at $20 per unit per year. The amended regulations do not impose any new program, service, duty or responsibility upon any state agency or instrumentality thereof, or local government. Owners of regulated housing accommodations will need to be more vigilant to assure their compliance with changes and the changes themselves in many instances do require additional filings by owners. Compliance costs are already a generally accepted expense of owning regulated housing. In general, as in the example provided above, the increased compliance costs are less a product of the promulgation of these regulations, but the enactment of HSTPA.

There are increased penalties in some instances if the regulations are violated.

However, these consequences are consistent with the existing law or otherwise necessary to secure compliance. Tenants will not incur any additional direct costs through implementation of the proposed regulations.

5. LOCAL GOVERNMENT MANDATES

The proposed rulemaking will not impose any new program, service, duty or responsibility upon any level of local government.

6. PAPERWORK

The amendments will increase the paperwork burden essentially due to the changes made by HSTPA. There will be additional costs associated with filings and the need for additional record retention. Specific claims that a changed regulation may create hardship or inequity can and will be raised in the context of the administrative applications, themselves, where such factual claims can be assessed. However, consistent with HSTPA and the court decisions interpreting it, DHCR has mitigated some of these additional paperwork concerns by expressly promulgating a regulation that makes the application of these new statutory standards on PAR the exception rather than the rule.

7. DUPLICATION

The amendments do not add any provisions that duplicate any known State or Federal requirements except to the extent required by law. There are instances where a rent-controlled property participates in another State, City or Federal housing program. In those instances, there may be a need to comply with the SRER requirements as well as the mandates of that City, State or Federal program.

8. ALTERNATIVES

As stated previously, much of these new regulations are a product of HSTPA, itself foreclosing, much examination of alternatives. Nevertheless, DHCR considered a variety of alternatives to certain rules which were not exactly proscribed by HSTPA. Most often however, the choices were questions of appropriate statutory interpretation rather than policy choices. A more detailed discussion of the alternatives for the proposed amendments is contained in the full Regulatory Impact Statement available on DHCR’s website at: https://hcr.ny.gov/regulatory-information

9. FEDERAL STANDARDS

The proposed amendments do not exceed or duplicate Federal standards. Many of HSTPA’s provisions and rent regulation generally are the subject of current litigation as to their constitutionality.

10. COMPLIANCE SCHEDULE

By the time of final promulgation of these rules, HSTPA will have been extant for a significant period. Therefore, it is not anticipated that regulated parties will uniformly require time to comply with the proposed rules. To the extent that DHCR believes they do reflect rules not required by HSTPA, the rules themselves are generally made expressly prospective. Moreover, DHCR regulations provide for an option of additional grace periods for implementation.

1. EFFECT OF RULE

The State Rent and Eviction Regulations (SRER) apply only to housing units located in those communities outside New York City that are subject to the Emergency Housing Rent Control Law. The class of small businesses affected by these proposed amendments would be limited to certain small property owners, who own limited numbers of rent regulated units. Given that rent control units are subject to vacancy decontrol, the number of units are limited and has decreased over time and will continue to do so. DHCR has sought to provide alternative and tailored methods of compliance with the requirements to provide options to small businesses to limit any additional regulatory burden. These amendments are expected to have no impact on local governments.

2. COMPLIANCE REQUIREMENTS

The proposed amendments would require small businesses that own regulated residential housing units to perform some additional recordkeeping and reporting. Such businesses will continue to need to keep records of rent increases and improvements made to the properties in order to qualify for rent increases authorized under the proposed changes.

3. PROFESSIONAL SERVICES

The proposed amendments may require small businesses to obtain new or additional professional services in the form of architecture or engineering services if it seeks a waiver of the reasonable cost schedule, which was previously promulgated and is now being incorporated into the larger major capital improvement (MCI) regulation. However, such services are often already used with respect to a contested MCI application. Further, the regulation will require review of costs for MCIs when contracting for the services to comply with the reasonable cost schedule.

4. COMPLIANCE COSTS

There is no indication that the proposed amendments will impose significant costs upon small businesses or upon the local government that were not anticipated by the passage of HSTPA. Small business owners of regulated housing accommodations will need to be more vigilant to assure their compliance with these changes. Compliance costs are already a generally accepted expense of owning regulated housing. There are also increased penalties in some instances if the regulations are violated. However, the costs of conforming present business practices to the change in standards are not substantial. In addition, these consequences are consistent with existing law or otherwise necessary to secure compliance.

5. ECONOMIC AND TECHNOLOGICAL FEASIBILITY

Compliance is not anticipated to require any unusual, new, or burdensome technological applications.

6. MINIMIZING ADVERSE IMPACT

The proposed regulations have no adverse impact on local government. They may have some costs to businesses which must be weighed against the fact that the rule is required by statute and necessary to enforce statutes designed to protect the public health, safety and welfare. The regulations do not create different regulatory standards for small businesses. It is difficult, on a blanket regulatory basis, to make exceptions for small businesses, but the regulations do allow small businesses to use exceptions available to owners under certain circumstances. Outside of the administrative proceedings themselves, where complaints and applications are reviewed on an individual basis, it is difficult to ascertain the size of the businesses subject to these regulations. To the extent the approaches suggested in SAPA section 202-b are appropriate, present procedures take these into account.

7. SMALL BUSINESS AND LOCAL GOVERNMENT PARTICIPATION

The rent laws and regulations empower DHCR to enforce the law. Meetings have been held with both business owners and affected tenant interest groups, including but not limited to: CHIP (Community Housing Improvement Program), Legal Services NYC, Brooklyn Legal Services, the Legal Aid Society, REBNY (Real Estate Board of New York), SHNNY (Supportive Housing Network of New York), RSA (Rent Stabilization Association of NYC, Inc.), UHAB (Urban Homesteading Assistance Board), HCC (Housing Conservation Coordinators), Tenants & Neighbors, as well as with members of the state senate and assembly. In addition, the Office of Rent Administration’s Office of Public Information has attended at least twenty-five community meetings per year since 2019. While many of these meetings have been geared primarily for tenant-based audiences, owners and owner groups are entitled to attend and there have been meetings more directed to owners and their representatives. DHCR has also issued fact sheets and operational bulletins prior to this regulatory process to inform the public as to how HSTPA impacted many of the processes and procedures of the Office of Rent Administration. The New York legislature itself held public hearings prior to the passage of the HSTPA. At the outset of this regulatory process, the Office of Rent Administration sent out an email advising all those on the email distribution list of the regulatory process and the opportunity to participate in this process. DHCR’s email distribution list consists of owners, tenants and their representatives. In addition, all interested parties will have an opportunity to comment as part of this SAPA process and all issues raised by concerned parties will be carefully reviewed and considered by DHCR prior to final promulgation. This process will include public hearings.

8. FOR RULES THAT EITHER ESTABLISH OR MODIFY A VIOLATION OR PENALTIES ASSOCIATED WITH A VIOLATION:

DHCR has not by these regulations increased the penalties on violations or added any additional penalties except beyond those mandated by statute.

The proposed rules will not impose any reporting, recordkeeping, or other compliance requirements on public or private entities located in any rural area pursuant to Subdivision 10 of SAPA Section 102.

It is not anticipated that there will be an adverse impact on jobs and employment opportunities by the promulgation of these regulations. To the extent that there is any impact, these regulations are, in large part, mandated by statute.