Aug. 29, 2018 By Tara Law
Two Queens lawmakers want to scrap a program that permits landlords to hike rents to cover the cost of capital improvements.
State Senator Michael Gianaris and Assemblymember Brian Barnwell introduced a bill in their respective chambers on Aug. 24 that would instead provide building owners with tax credits to offset the costs of upgrades.
Under the current system, landlords of rent stabilized or controlled apartments are permitted to pass on the cost of building improvements to tenants by raising the rent. This policy— known as the Major Capital Improvements program— was implemented in the 1970s.
Owners who improve buildings with upgrades such as new windows, boilers and roofs can increase rents by as much as 6 percent annually to recoup the costs.
However, the rent increases from the MCI program are permanent, which critics say enables landlords to collect higher rents even after recouping the cost of improvements.
Some landlords are even able have the apartments decontrolled by raising rents above the city’s threshold for deregulation, said Gianaris.
Gianaris and Barnwell’s bill would require landlords to repeal existing MCI rent increases upon receiving a petition from a tenant, and block future MCI rent increases.
Gianaris and Barnwell argue that the MCI program is causing tenants to be priced out of their homes.
“The Major Capital Improvement program is responsible for hundreds of millions of dollars in rent increases on rent regulated tenants,” Barnwell said. “It is unacceptable that we maintain a program pushing middle to low income New Yorkers out of their homes while allowing landlords to continue to make monstrous profits.”
Gianaris said that the bill aims to improve housing quality and affordability.
“Too many tenants are priced out of their homes because of MCIs whose only improvement seems to be the landlord’s bottom line,” Gianaris said. “All New Yorkers deserve high quality, affordable homes and our proposal brings us closer to that goal by ensuring repairs are made without burdening tenants with unreasonable costs.”
The Department of Homes and Community Renewal would be the agency put in charge of approving a landlord’s tax credit–to make sure capital improvements are made.
Gianaris said that the change would enable the department to determine which changes are truly necessary for habitability and what are just a workaround to raise the rent.
Gianaris said that in the past, landlords would “make all kinds of change to take advantage of the [MCI] program.”