Colleen Roche (212) 788-2958 Jennifer Chait (212) 788-8479
MAYOR GIULIANI SIGNS COUNCIL BILL NO. 1037-A, AMENDING THE MAXIMUM BASE RENT METHODOLOGY AND SAVING RENT CONTROLLED TENANTS 4.5%
REMARKS BY MAYOR RUDOLPH W. GIULIANI AT PUBLIC HEARING ON LOCAL LAWS
The final bill before me this afternoon is Introductory Number 1037-A, a bill sponsored jointly by my Administration, City Council Speaker Peter Vallone and numerous other Council Members. This legislation would amend the Administrative Code in relation to the maximum base rent methodology and the establishment of maximum rent increases for rent controlled apartments.
More specifically, this bill would require the State Division of Housing and Community Renewal (DHCR) to utilize Article 12 of the New York State Real Property Tax Law (RPTL) in calculating the allowable maximum rent increases for rent controlled housing accommodations. Currently, DHCR utilizes Article 12-A of the RPTL.
The continued use of Article 12-A would result in a 7-1/2 percent rent increase for rent controlled tenants, retroactive to January 1, 1996. However, by mandating the methodology of Article 12, rent controlled tenants would only receive a three percent increase. This change in methodology would not only result in a more precise valuation of real property, but would also lessen rent increases for rent-controlled tenants by 4-1/2 percent.
Introductory 1037-A would also directly benefit the City of New York. If DHCR were permitted to continue to use Article 12-A instead of Article 12, the City's Senior Citizen Rent Increase Exemption Program (SCRIE) would be required to re-calculate rents for rent controlled tenants in the SCRIE Program, retroactive to the 1996-1997 period, and authorize additional tax abatement credits.
There are approximately 71,000 rent controlled units in New York City, of which it is estimated that over 65% are occupied by persons 62 years of age or older. As many rent controlled tenants are on fixed incomes, the use of an inaccurate measure of capital value for real property could result in unjustified rent increases for tenants. This bill promotes a result that is more fair and equitable to tenants and landlords alike. Moreover, a reduction in rent increases may very well go a long way in assisting senior citizens and others to make ends meet.
For the reasons previously stated I will now sign this bill.
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