§ 3-10 Rent and Carrying Charge Increases.
RCNY § 3-10
(a)Procedure for request of increase.
(1)The housing company shall prepare the requisite petition, application, or motion for an increase in the maximum rental or carrying charges per room and submit same to HPD for approval as to form and authorization for hearing procedures.
(2)In the event the housing company fails to submit said petition, application or motion as set forth in paragraph (1) above, HPD may, upon its determination of the need for an increase in rents or carrying charges, promulgate a petition preparatory to effectuating the hearing, which petition need not be in the same form as delineated in 28 RCNY § 3-10(b).
(b)Public hearing requirement.
(3)In the event that a hearing having been scheduled is adjourned for any reason whatsoever, then notice of such adjourned date shall be posted near the elevators, on bulletin boards or in any other conspicuous places on the lobby floor; such notice shall constitute compliance with these regulations.
(c)Contents of application.
(ii)Dates of completion and of occupancy.
(iii)Status with respect to tax exemption.
(iv)Present average room rent.
(v)Present income from non-dwelling spaces.
(vi)Capitalization, authorized and actual.
(vii)Status of dividend and debenture interest payments accruing from date of initial occupancy.
(viii)Assessed valuation. Land and land improvements.
(ix)Such other information and data as may be pertinent.
(x)Request for a specific rent increase.
(4)The application shall have annexed the following exhibits and schedules: Exhibit I. A three year projection of operations on a cash flow basis as per a format available from HPD, complete with applicable schedules. In addition to the three years an actual base year should be used as a starting point reflecting the information in the latest certified statement of financial condition as prepared by a certified public accountant. Exhibit II. A calculation of the increase required on an average per room per month rate in a format available from HPD. This calculation will commence with beginning working capital or deficit working capital as of the beginning of the projection. Include total deficits projected for the length of the projection and one month's working capital to be left at the end of the period. This deficit then divided by the number of months between expected day of increase and the end of projections and that amount divided by the number of rental rooms in the development will produce the required per room per month dollar increase. Exhibit III. A three year projection of operations on a cash flow basis after reflecting the increase calculated in Exhibit II above. All applicable schedules will be provided as required in Exhibit I. Exhibit IV. The most recent annual audited financial statement for the housing company. It should be noted that working capital or negative working capital resulting from prior years' operations, as well as required reserves not funded, must be considered in the calculation of required increase in the petition. The format for these exhibits and schedules is available from HPD. HPD may require further information on any of the matters listed above or on any other matters and may request an amended or superseding application. Such additional information shall be verified and filed in quadruplicate within the time stated by HPD.
(d)The hearing.
(5)A record of the proceedings shall be kept, which shall include, among other things, the application, the notice to tenants, the written and documentary material received, including comments received by HPD. A verbatim transcript of the hearing shall be made, kept as a record of the public hearing and made available for review by tenant / cooperators as well as posted to a website created and maintained by the housing company. The cost of such transcript shall be borne by the housing company.
(6)HPD shall make its decision with respect to the application, and if it is determined that an increase shall be granted, the Commissioner shall issue an Order specifying the amount of the increase and the date(s) of implementation. Said Commissioner's Order may be structured to provide for a single or multiple-stage increase.
(7)Prior to the issuance of the Commissioner's order, HPD shall make available the results of a preliminary financial analysis of the application. In the case of a rental development, such analysis shall be provided to both the owner and the Tenants Association or their respective representatives or designees. If either party in the case of a rental development requests a meeting to review the preliminary financial analysis, HPD's Assistant Commissioner of Housing Supervision shall call a meeting with both parties present prior to making a recommendation to the Commissioner. In the case of a mutual housing company, such analysis shall be provided to the President of the Board of Directors or his or her designee. If the Board of Directors requests a meeting to review such analysis, the Assistant Commissioner of Housing Supervision shall call a meeting prior to making a recommendation to the Commissioner.
(e)Implementation of rent or carrying charge increase. A rent increase shall become effective on the first day of the month specified in the Commissioner's Order. The housing company or managing agent shall notify the tenants of such increase by ordinary mail or distribution under each apartment door at least fifteen (15) days in advance thereof or thirty (30) days in advance in the case of a development assisted by a Federal 236 contract, and by posting a copy of the order granting said increase in a conspicuous public place on the lobby floor of each building affected; if such notice is not given in sufficient time then the rent increase shall become effective on the first day of the following month. Proof of such notification shall also be furnished prior to the institution of any rent increase.
(f)Failure to maintain essential services. No increase will be granted where in the discretion of HPD the owner of a rental development is not substantially maintaining essential services. Any tenant or his or her representative who wishes to raise this objection must do so by filing a verified statement with HPD a minimum of ten (10) days prior to the date set for the hearing, setting forth in separate allegations each claimed instance of failure to substantially maintain essential services.
(g)Service fees and charges. A housing company may, with the prior written approval of HPD, impose or increase fees for services including, but not limited to parking, air- conditioning, master antenna, appliances and storage.
(h)Reimbursement of professional fees to Tenants Associations.
(i)(1) Notwithstanding anything to the contrary contained in this section, a housing company may submit an application for an increase in the maximum rental or carrying charges per dwelling unit paid solely by a tenant/cooperator who pays for such rent or carrying charge, in whole or in part, with a rental assistance subsidy. Where the housing company does not submit such an application, HPD, upon its determination of the need for an increase in rents or carrying charges, may request that such housing company submit the information set forth in paragraph two of this subdivision. For the purposes of this subdivision, the term “rental assistance subsidy” means payments made by a federal, state or local governmental agency or instrumentality for the payment of monthly rent or carrying charges up to an enumerated payment standard, provided that an increase in such payment standard does not result in a higher rent or carrying charge contribution for the tenant/cooperator in receipt of such rental assistance subsidy.
