Recommendations for Strengthened HCR Enforcement and Oversight We call on HCR to make a historic shift in regulatory policy and practice to prevent the further loss of irreplaceable housing resources and the displacement of low and moderate income people from their homes and communities. Lax regulation and weak enforcement have made it possible for unscrupulous landlords to unlawfully deregulate tens of thousands of rent stabilized units, and inflate even rent stabilized rents to a level beyond the reach of many working families. 1) Revise regulatory frameworks to preserve affordable housing A. Restrict increases based on vacancy improvements. It has become apparent that the imposition of unwarranted and fraudulent rent increases based on alleged “improvements” made during apartment vacancies is the greatest single factor driving the rapid inflation of rents and the single greatest threat to the affordability that the Rent Stabilization Law (RSL) was enacted to preserve. HCR should adopt new rules pursuant to the recent RSL amendments: • HCR should require its approval for any individual apartment vacancy improvement (IAI) rent increase that raises the legal regulated rent by more than 20 percent. • HCR should disallow increases for cosmetic improvements, or for correction of prior neglect in maintenance, and allow increases only for substantial improvements in the quality of apartment facilities and services. • HCR should discourage fraud by limiting IAIs to the reasonable, rather than the actual cost of the improvement, and requiring use of licensed contractors with no connection to the owner or managing agent. • HCR should establish cost guidelines for the various individual apartment improvements for which owners are authorized to increase rents, and reject any application with costs higher than the established guidelines. • HCR should condition IAI increases upon submission of detailed descriptions and thorough documentation of vacancy improvements in connection with registrations and vacancy lease riders. B. Improve oversight of MCI increases • HCR should make MCIs temporary surcharges rather than permanent increases. • HCR should deny MCI applications for buildings with more than 2 hazardous or immediately hazardous violations per unit and in buildings where the owner and/or management company has engaged in tenant harassment. • HCR should disallow increases for work that can be funded through government agencies such as HPD and NYSERDA. • Currently, if an owner is receiving a J-51 tax abatement for the same work as an MCI, the rent increase is decreased by 50% for the life of the benefit. HCR should not allow any increases, even by a reduced percentage, that duplicate J-51 and other tax benefits. • HCR should disallow MCIs where energy savings pay them back within a period of time. • HCR should facilitate tenant participation in the MCI approval or rejection process, and provide easy access to all relevant documents. • In buildings leaving Mitchell-Lama, an escrow account should be automatically created to pay for repairs and replacements that would otherwise be MCIs over the 5 years after the building has entered rent stabilization. Furthermore, any work mandated as a precondition to the building leaving Mitchell-Lama should not qualify for an MCI. • If, over the course of two years, MCIs cumulatively result in more than a 10 percent increase in a building’s rent roll, HCR should automatically inspect all work. C. Strengthen Enforcement of Registration Requirements • HCR should amend the RSC to provide that the base date rent will be deemed to be the rent listed in the most recent prior registration. • HCR should require full documentation to support amended registrations, and insure notice to the tenant of such amendments. HCR should permit challenges to late and amended registrations filed after the base date. • HCR should take immediate action to re-regulate unlawfully deregulated apartments and in J-51 buildings impacted by the Roberts v Tishman Speyer decision. HCR should additionally ensure that tenants in those unlawfully deregulated units have rents that are what they should have been had the unit not been illegally deregulated. • HCR should take immediate action to re-regulate and protect current and future tenants in buildings that have been used as illegal hotels. D. • 2) Protect the Rights of Remaining Family Members HCR should revise the RSC to supersede recent court decisions that have denied legitimate claims by tenants’ family members, specifically permitting succession based on co-occupancy prior to the tenant of record’s physical vacatur of the apartment, regardless of whether the tenant formally surrendered his tenancy rights to the landlord. Provide Proactive and Timely Enforcement of the Rent Laws: HCR should proactively enforce New York’s rent stabilization laws in order to stop ongoing rent overcharges to tenants; to prevent the transformation of illegal rents into legal ones due to the 4 year rule; and to prevent the unlawful deregulation of rent stabilized units. To this end, HCR should: • Proactively investigate an entire building or portfolio in which rent overcharges have been confirmed, or where a landlord fails to file rent registrations and/or files rent registrations retroactively. • Program its database to automatically detect illegal rent increases registered by landlords or failures to register rents. Any illegal increase, whether at a lease renewal or a vacancy, should trigger an investigation by DHCR, without the need for a tenant complaint. Any failure to file a rent registration should also trigger an investigation by DHCR and assessment of maximum penalties. • Expedite decisions about rent overcharge and other complaints. • Enforce the RSL’s rent freeze provisions whenever landlords do not file rent registrations. 3) Improve Tenant Access to HCR: • Improve accessibility by tenants with limited English proficiency by tracking the language needs of tenants, providing translated documents and forms, and insuring interpretation of oral communications. • Make HCR’s website more user-friendly and linguistically accessible, and allow tenants to obtain the rent history for their apartments on line. • Conduct targeted outreach to tenants to educate them about their rights and about opportunities to challenge fraudulent landlord behavior, particularly in buildings where the owner is known to have violated the rent laws in an effort to displace tenants and deregulate units, and in immigrant communities.