A 7757: Provides that when a housing accommodation has been vacated after continuous tenancy or occupancy of ten years or more prior to vacancy, and the owner can demonstrate restoration of the unit, the new legal regulated rent shall be the rent agreed to by the owner and first tenant after such restoration and reserved in a lease or other rental agreement; makes related provisions.

  
  STATE OF NEW YORK ________________________________________________________________________ 7757 2025-2026 Regular Sessions  IN ASSEMBLY April 8, 2025 ___________ Introduced by M. of A. JACKSON -- read once and referred to the Commit- tee on Housing AN ACT to amend the administrative code of the city of New York, in relation to certain housing accommodations; and to amend the emergency tenant protection act of nineteen seventy-four, in relation to certain hardship provisions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision c of section 26-511 of the administrative code 2 of the city of New York is amended by adding a new paragraph 16 to read 3 as follows: 4 (16) provides that, notwithstanding any other provision of this chap- 5 ter to the contrary, when a housing accommodation subject to this chap- 6 ter has been vacated after continuous tenancy or occupancy of ten years 7 or more prior to vacancy, and the owner can demonstrate restoration of 8 the unit as set forth in section 26-511.2 of this chapter, the new legal 9 regulated rent shall be the rent agreed to by the owner and first tenant 10 after such restoration and reserved in a lease or other rental agree- 11 ment; provided that such new legal regulated rent: (i) shall not exceed 12 the section 8 voucher payment standard adopted by a local public housing 13 agency for a unit of the same size and located within the same zip code 14 that was in effect at the time the lease was executed; and (ii) may be 15 adjusted on audit by the division under section 26-511.2 of this chap- 16 ter, or on application of a tenant or owner under section 26-513.1 of 17 this chapter. The legal regulated rent adjustment set forth in this 18 paragraph shall be known as the local regulated housing restoration 19 adjustment. 20 § 2. The administrative code of the city of New York is amended by 21 adding a new section 26-511.2 to read as follows: 22 § 26-511.2 The local regulated housing restoration adjustment. a. The 23 division of housing and community renewal, the "division" shall estab- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05862-01-5 
 A. 7757 2 1 lish a notification procedure and documentation submission guidelines 2 for the local regulated housing restoration adjustment. Documentation 3 to qualify for the local regulated housing restoration adjustment shall 4 be limited to: 5 (1) XRF test results or other documentation demonstrating a lead-free 6 housing accommodation under applicable local definitions; 7 (2) any required tenant protection plans or similar submissions to the 8 local building department in connection with such restoration; 9 (3) any required contractor licenses or certifications; 10 (4) list and specifications of new electric appliances installed; 11 (5) before and after photos; 12 (6) lease or rental agreement listing new legal regulated rent; 13 (7) evidence of renting to a housing subsidy voucher holder, or the 14 section 8 voucher payment standard adopted by a local public housing 15 agency for a unit of the same size and located within the same zip code 16 that was in effect at the time the lease was executed; 17 (8) evidence of renting to a housing subsidy voucher holder, or 18 documentation confirming that, as of the date of the commencement of the 19 incoming tenant's lease, any physical condition within the unit that was 20 the basis for a previously issued violation has been corrected; and 21 (9) for units vacated after the effective date of this section, a form 22 to be promulgated by the division and signed by the previous tenant 23 affirming that the vacatur prior to the local regulated housing restora- 24 tion adjustment was voluntary and not the result of unlawful owner 25 harassment. In considering the sufficiency of alternate documentation, 26 and notwithstanding other potentially sufficient documentation, vacatur 27 shall be presumed voluntary and not the result of owner harassment when 28 (i) the owner recovered possession of the unit through judicial 29 proceedings, (ii) the owner demonstrates abandonment of the unit through 30 electronic communications, recordings, or other evidence of voluntary 31 vacatur, or (iii) the owner demonstrates the previous tenant died and 32 the unit was not occupied by a lawful successor. 33 b. The local regulated housing restoration adjustment shall not be 34 permitted: 35 (1) for units that are rented within a twenty-four-month period after 36 an arm's length transfer of ownership; 37 (2) for units that are rented within a thirty-six-month period after 38 determination by the division that the owner has engaged in unlawful 39 harassment with respect to the unit; 40 (3) for units in buildings subject to housing preservation and devel- 41 opment's alternative enforcement program; or 42 (4) after an unlawful eviction. 43 c. The division shall establish an audit process to review a percent- 44 age, as established by the division, of housing accommodations that 45 register adjusted legal regulated rents under the local regulated hous- 46 ing restoration adjustment. The division's established audit process 47 shall be subject to the following requirements: 48 (1) any audit shall be limited to: (i) confirmation that documentation 49 set forth in subdivision a of this section has been submitted; and (ii) 50 unless rented to a housing subsidy voucher holder, confirmation that the 51 unit's agreed rent does not exceed the section 8 voucher payment stand- 52 ard adopted by a local public housing agency for a unit of the same size 53 and located within the same zip code that was in effect at the time the 54 lease was executed. Such audit shall be initiated within one year of 55 the filing of an annual apartment registration indicating an adjustment 
 A. 7757 3 1 to the legal regulated rent under the local regulated housing restora- 2 tion adjustment; and 3 (2) if an audit under this subdivision determines that (i) an owner 4 has failed to submit documentation set forth in subdivision a of this 5 section and the owner then fails to submit any missing documentation 6 after sixty days' written notice from the division, or (ii) the local 7 housing restoration adjustment exceeds the section 8 voucher payment 8 standard adopted by a local public housing agency for a unit of the same 9 size and located within the same zip code that was in effect at the time 10 the lease was executed, the division shall set the subject unit's legal 11 regulated rent at an amount equal to seventy-five percent of the section 12 8 voucher payment standard adopted by a local public housing agency for 13 a unit of the same size and located within the same zip code that was in 14 effect at the time the lease was executed, except that the legal regu- 15 lated rents for units subject to housing subsidy vouchers shall be 16 established at the contract rent amount approved by the agency adminis- 17 tering the voucher. 18 (3) Any required refunds shall be made in accordance with section 19 26-513.1 of this chapter. 20 d. To encourage rental of units subject to a local housing restoration 21 adjustment to individuals and families with housing subsidy vouchers or 22 that are in communities of need, the division shall establish incen- 23 tives, in addition to those already contained in this section, for hous- 24 ing providers who rent to housing subsidy voucher holders located in 25 very low- and low-income zip codes. 26 e. Access to the documentation submitted as part of the local regu- 27 lated housing restoration adjustment shall be governed by the same laws 28 governing access to building and apartment registrations filed with the 29 division. 30 § 3. The administrative code of the city of New York is amended by 31 adding a new section 26-513.1 to read as follows: 32 § 26-513.1 Application for adjustment of local regulated housing 33 restoration adjustment. a. The tenant of a housing accommodation that 34 was vacant on, or became vacant after, June 14, 2019, and has been 35 subject to the local regulated housing restoration adjustment, may file 36 with the commissioner of housing and community renewal within 120 days 37 after notice has been received under subdivision c of this section an 38 application for the adjustment of the rent for such housing accommo- 39 dation. Such applications shall be subject to the following: 40 (1) in the application, the tenant must allege that the local regu- 41 lated housing restoration adjustment rent exceeds the section 8 voucher 42 payment standard adopted by a local public housing agency for a unit of 43 the same size and located within the same zip code that was in effect at 44 the time the lease was executed. 45 (2) in determining an application filed pursuant to this section, the 46 commissioner shall only consider whether the subject rent exceeds the 47 section 8 voucher payment standard adopted by a local public housing 48 agency for a unit of the same size and located within the same zip code 49 that was in effect at the time the lease was executed. 50 (3) the owner of the housing accommodation subject to an application 51 under this section shall be given an opportunity to submit a written 52 answer to any application. 53 (4) when the local regulated housing restoration adjustment rent 54 amount is determined to exceed the section 8 voucher payment standard 55 adopted by a local public housing agency for a unit of the same size and 56 located within the same zip code that was in effect at the time the 
 A. 7757 4 1 lease was executed, the commissioner of housing and community renewal 2 shall order that the legal regulated rent for the subject unit shall be 3 equal to seventy-five percent of the section 8 voucher payment standard 4 adopted by a local public housing agency for a unit of the same size and 5 located within the same zip code that was in effect at the time the 6 lease was executed; except that the legal regulated rents for units 7 subject to housing subsidy vouchers shall be equal to the contract rent 8 amount approved by the local housing authority that issues the voucher. 9 Any required refunds shall be made by the owner in cash or as a credit 10 against unpaid rent over a period not to exceed six months. 11 b. Notwithstanding subdivision a of this section, provided that the 12 owner has submitted to the division documentation in accordance with 13 subdivision a of section 26-511.2 of this chapter, the division shall 14 only determine whether the tenancy is subject to a housing subsidy 15 voucher and, if not, whether the rent charged to the first tenant after 16 the local regulated housing restoration adjustment exceeds the section 8 17 voucher payment standard adopted by a local public housing agency for a 18 unit of the same size located within the same zip code that was in 19 effect at the time the lease was executed. Any documentation deficien- 20 cies shall be resolved through the audit process set forth in section 21 26-511.2 of this chapter. 22 c. In the lease execution package for the first lease after the legal 23 rent was adjusted under the local regulated housing restoration adjust- 24 ment, the owner shall give notice, both in the lease and subsequently in 25 writing by certified mail, or by electronic delivery if the tenant has 26 opted to receive electronic delivery of documents, to the tenant of such 27 housing accommodation on a form prescribed by the commissioner of hous- 28 ing and community renewal that the local regulated housing restoration 29 adjustment was applied, including notification of the prior legal regu- 30 lated rent, a description of work completed, the building address and 31 the section 8 voucher payment standard adopted by a local public housing 32 agency for a unit of the same size and located within the same zip code 33 that was in effect at the time the lease was executed, and such tenant's 34 right to file an application challenging the new legal regulated rent of 35 such housing accommodation. 36 § 4. Paragraph 5 of subdivision d of section 6 of section 4 of chapter 37 576 of the laws of 1974, constituting the emergency tenant protection 38 act of nineteen seventy-four, as amended by chapter 102 of the laws of 39 1984, is amended and a new paragraph 6 is added to read as follows: 40 (5) as an alternative to the hardship application provided under para- 41 graph four of this subdivision, owners of buildings acquired by the same 42 owner or a related entity owned by the same principals three years prior 43 to the date of application may apply to the division for increases in 44 excess of the level of applicable guideline increases established under 45 this law based on a finding by the commissioner that such guideline 46 increases are not sufficient to enable the owner to maintain an annual 47 gross rent income for such building which exceeds the annual operating 48 expenses of such building by a sum equal to at least five percent of 49 such gross rent. For the purposes of this paragraph, operating expenses 50 shall consist of the actual, reasonable, costs of fuel, labor, utili- 51 ties, taxes, other than income or corporate franchise taxes, fees, 52 permits, necessary contracted services and non-capital repairs, insur- 53 ance, parts and supplies, management fees and other administrative costs 54 and mortgage interest. For the purposes of this paragraph, mortgage 55 interest shall be deemed to mean interest on a bona fide mortgage 56 including an allocable portion of charges related thereto. Criteria to 
 A. 7757 5 1 be considered in determining a bona fide mortgage other than an institu- 2 tional mortgage shall include; condition of the property, location of 3 the property, the existing mortgage market at the time the mortgage is 4 placed, the term of the mortgage, the amortization rate, the principal 5 amount of the mortgage, security and other terms and conditions of the 6 mortgage. The commissioner shall set a rental value for any unit occu- 7 pied by the owner or a person related to the owner or unoccupied at the 8 owner's choice for more than one month at the last regulated rent plus 9 the minimum number of guidelines increases or, if no such regulated rent 10 existed or is known, the commissioner shall impute a rent consistent 11 with other rents in the building. The amount of hardship increase shall 12 be such as may be required to maintain the annual gross rent income as 13 provided by this paragraph. The division shall not grant a hardship 14 application under this paragraph or paragraph four of this subdivision 15 for a period of three years subsequent to granting a hardship applica- 16 tion under the provisions of this paragraph. The collection of any 17 increase in the rent for any housing accommodation pursuant to this 18 paragraph shall not exceed six percent in any year from the effective 19 date of the order granting the increase over the rent set forth in the 20 schedule of gross rents, with collectability of any dollar excess above 21 said sum to be spread forward in similar increments and added to the 22 rent as established or set in future years. No application shall be 23 approved unless the owner's equity in such building exceeds five percent 24 of: (i) the arms length purchase price of the property; (ii) the cost of 25 any capital improvements for which the owner has not collected a 26 surcharge; (iii) any repayment of principal of any mortgage or loan used 27 to finance the purchase of the property or any capital improvements for 28 which the owner has not collected a surcharge; and (iv) any increase in 29 the equalized assessed value of the property which occurred subsequent 30 to the first valuation of the property after purchase by the owner. For 31 the purposes of this paragraph, owner's equity shall mean the sum of (i) 32 the purchase price of the property less the principal of any mortgage or 33 loan used to finance the purchase of the property, (ii) the cost of any 34 capital improvement for which the owner has not collected a surcharge 35 less the principal of any mortgage or loan used to finance said improve- 36 ment, (iii) any repayment of the principal of any mortgage or loan used 37 to finance the purchase of the property or any capital improvement for 38 which the owner has not collected a surcharge, and (iv) any increase in 39 the equalized assessed value of the property which occurred subsequent 40 to the first valuation of the property after purchase by the owner[.]; 41 or 42 (6) provides that, notwithstanding any other provision of this chapter 43 to the contrary, when a housing accommodation subject to this chapter 44 has been vacated after continuous tenancy or occupancy of ten years or 45 more prior to vacancy, and the owner can demonstrate restoration of the 46 unit as set forth in subdivision (a-1) of section ten of this chapter, 47 the new legal regulated rent shall be the rent agreed to by the owner 48 and first tenant after such restoration and reserved in a lease or other 49 rental agreement; provided that such new legal regulated rent: (i) 50 shall not exceed the section 8 voucher payment standard adopted by a 51 local public housing agency for a unit of the same size and located 52 within the same zip code that was in effect at the time the lease was 53 executed; and (ii) may be adjusted on audit by the division under subdi- 54 vision (a-1) of section ten of this chapter, or on application of a 55 tenant or owner under subdivision d-1 of section nine of this chapter. 
 A. 7757 6 1 The legal regulated rent adjustment set forth in this paragraph shall be 2 known as the local regulated housing restoration adjustment. 3 § 5. Section 10 of section 4 of chapter 576 of the laws of 1974, 4 constituting the emergency tenant protection act of nineteen seventy- 5 four is amended by adding a new subdivision (a-1) to read as follows: 6 (a-1) the division of housing and community renewal shall establish a 7 notification procedure and documentation submission guidelines for the 8 local regulated housing restoration adjustment. a. Documentation to 9 qualify for the local regulated housing restoration adjustment shall be 10 limited to: 11 (1) XRF test results or other documentation demonstrating a lead-free 12 housing accommodation under applicable local definitions; 13 (2) any required tenant protection plans or similar submissions to the 14 local building department in connection with such restoration; 15 (3) any required contractor licenses or certifications; 16 (4) list and specifications of new electric appliances installed; 17 (5) before and after photos; 18 (6) lease or rental agreement listing new legal regulated rent; 19 (7) evidence of renting to a housing subsidy voucher holder, or the 20 section 8 voucher payment standard adopted by a local public housing 21 agency for a unit of the same size and located within the same zip code 22 that was in effect at the time the lease was executed; 23 (8) evidence of renting to a housing subsidy voucher holder, or 24 documentation confirming that, as of the date of the commencement of the 25 incoming tenant's lease, any physical condition within the unit that was 26 the basis for a previously issued violation has been corrected; and 27 (9) for units vacated after the effective date of this subdivision, a 28 form to be promulgated by the division and signed by the previous tenant 29 affirming that the vacatur prior to the local regulated housing restora- 30 tion adjustment was voluntary and not the result of unlawful owner 31 harassment. In considering the sufficiency of alternate documentation, 32 and notwithstanding other potentially sufficient documentation, vacatur 33 shall be presumed voluntary and not the result of owner harassment when 34 (i) the owner recovered possession of the unit through judicial 35 proceedings, (ii) the owner demonstrates abandonment of the unit through 36 electronic communications, recordings, or other evidence of voluntary 37 vacatur, or (iii) the owner demonstrates the previous tenant died and 38 the unit was not occupied by a lawful successor. 39 b. The local regulated housing restoration adjustment shall not be 40 permitted: 41 (1) for units that are rented within a twenty-four-month period after 42 an arm's length transfer of ownership; 43 (2) for units that are rented within a thirty-six-month period after 44 determination by the division that the owner has engaged in unlawful 45 harassment with respect to the unit; 46 (3) for units in buildings subject to housing preservation and devel- 47 opment's alternative enforcement program; or 48 (4) after an unlawful eviction. 49 c. The division of housing and community renewal shall establish an 50 audit process to review a percentage, as established by the division, of 51 housing accommodations that register adjusted legal regulated rents 52 under the local regulated housing restoration adjustment. The divi- 53 sion's established audit process shall be subject to the following 54 requirements: 55 (1) any audit shall be limited to: (i) confirmation that documentation 56 set forth in paragraph a of this subdivision has been submitted; and 
 A. 7757 7 1 (ii) unless rented to a housing subsidy voucher holder, confirmation 2 that the units agreed upon rent as reserved in a lease agreement does 3 not exceed the section 8 voucher payment standard adopted by a local 4 public housing agency for a unit of the same size and located within the 5 same zip code that was in effect at the time the lease was executed. 6 Such audit shall be initiated within one year of the filing of an annual 7 apartment registration indicating an adjustment to the legal regulated 8 rent under the local regulated housing restoration adjustment; and 9 (2) if an audit under this subdivision determines that: (i) an owner 10 has failed to submit documentation set forth in subdivision a of this 11 section and the owner then fails to submit any missing documentation 12 after sixty days' written notice from the division; or (ii) the local 13 housing restoration adjustment exceeds the section 8 voucher payment 14 standard adopted by a local public housing agency for a unit of the same 15 size and located within the same zip code that was in effect at the time 16 the lease was executed, the division shall set the subject unit's legal 17 regulated rent at an amount equal to seventy-five percent of the section 18 8 voucher payment standard adopted by a local public housing agency for 19 a unit of the same size and located within the same zip code that was in 20 effect at the time the lease was executed, provided, however, that the 21 legal regulated rents for units subject to housing subsidy vouchers 22 shall be established at the contract rent amount approved by the agency 23 administering the voucher. 24 (3) Any required refunds shall be made in accordance with section 25 26-513.1 of the administrative code of the city of New York. 26 d. To encourage rental of units subject to a local housing restoration 27 adjustment to individuals and families with housing subsidy vouchers or 28 that are in communities of need, the division shall establish incen- 29 tives, in addition to those already contained in this section, for hous- 30 ing providers who rent to housing subsidy voucher holders located in 31 very low- and low-income zip codes. 32 e. Access to the documentation submitted as part of the local regu- 33 lated housing restoration adjustment shall be governed by the same laws 34 governing access to building and apartment registrations filed with the 35 division. 36 § 6. Section 9 of section 4 of chapter 576 of the laws of 1974, 37 constituting the emergency tenant protection act of nineteen seventy- 38 four is amended by adding a new subdivision d-1 to read as follows: 39 d-1. (1) The tenant of a housing accommodation that was vacant on, or 40 became vacant after, June 14, 2019, and has been subject to the local 41 regulated housing restoration adjustment, may file with the commissioner 42 within 120 days after notice has been received under paragraph three of 43 this subdivision an application for the adjustment of the rent for such 44 housing accommodation. Such applications shall be subject to the 45 following: 46 (i) in the application, the tenant must allege that the local regu- 47 lated housing restoration adjustment rent exceeds the section 8 voucher 48 payment standard adopted by a local public housing agency for a unit of 49 the same size and located within the same zip code that was in effect at 50 the time the lease was executed; 51 (ii) in determining an application filed pursuant to this section, the 52 commissioner of housing and community renewal shall only consider wheth- 53 er the subject rent exceeds the section 8 voucher payment standard 54 adopted by a local public housing agency for a unit of the same size and 55 located within the same zip code that was in effect at the time the 56 lease was executed; 
 A. 7757 8 1 (iii) the owner of the housing accommodation subject to an application 2 under this section shall be given an opportunity to submit a written 3 answer to any application; and 4 (iv) when the local regulated housing restoration adjustment rent 5 amount is determined to exceed the section 8 voucher payment standard 6 adopted by a local public housing agency for a unit of the same size and 7 located within the same zip code that was in effect at the time the 8 lease was executed, the commissioner of housing and community renewal 9 shall order that the legal regulated rent for the subject unit shall be 10 equal to seventy-five percent of the section 8 voucher payment standard 11 adopted by a local public housing agency for a unit of the same size and 12 located within the same zip code that was in effect at the time the 13 lease was executed; provided, however, that the legal regulated rents 14 for units subject to housing subsidy vouchers shall be equal to the 15 contract rent amounts approved by the local housing agency administering 16 the voucher. Any required refunds shall be made by the owner in cash or 17 as a credit against unpaid rent over a period not to exceed six months. 18 (2) Notwithstanding paragraph a of this subdivision, provided that the 19 owner has submitted to the division documentation in accordance with 20 subdivision (a-1) of section ten of this chapter, the division shall 21 only determine whether the tenancy is subject to a housing subsidy 22 voucher and, if not, whether the rent charged to the first tenant after 23 the local regulated housing restoration adjustment exceeds the section 8 24 voucher payment standard adopted by a local public housing agency for a 25 unit of the same size located within the same zip code that was in 26 effect at the time the lease was executed. Any documentation deficien- 27 cies shall be resolved through the audit process set forth in subdivi- 28 sion (a-1) of section ten of this chapter. 29 (3) In the lease execution package for the first lease after the legal 30 rent was adjusted under the local regulated housing restoration adjust- 31 ment, the owner shall give notice, both in the lease and subsequently in 32 writing by certified mail, or by electronic delivery if the tenant has 33 opted to receive electronic delivery of documents, to the tenant of such 34 housing accommodation on a form prescribed by the commissioner of hous- 35 ing and community renewal that the local regulated housing restoration 36 adjustment was applied, including notification of the prior legal regu- 37 lated rent, a description of work completed, the building address and 38 the section 8 voucher payment standard adopted by a local public housing 39 agency for a unit of the same size and located within the same zip code 40 that was in effect at the time the lease was executed, and such tenant's 41 right to file an application for adjustment of the new legal regulated 42 rent of such housing accommodation. 43 § 7. This act shall take effect immediately; and provided that the 44 amendments to chapter 4 of title 26 of the administrative code of the 45 city of New York made by sections one, two and three of this act shall 46 expire on the same date as such law expires and shall not affect the 47 expiration of such law as provided under section 26-520 of such law.