Interim Rent Guidelines & Rent Adjustments
Proposed Rules: Closed to Comments
Statement of Basis and Purpose
On June 21, 2010, the New York State Legislature enacted Section 281(5) of Article 7-C which expanded the criteria for coverage under the Loft Law. Multiple Dwelling Law (MDL) section 286(2)(i) directs the Loft Board to establish rent adjustments prior to Article 7-B compliance, also known as interim rent adjustments for interim multiple dwelling (IMD) units covered under MDL § 281(5).
On November 17, 2011, the Loft Board heard testimony from owner and tenant representatives, the Met Council on Housing and the Rent Stabilization Association, among others, about factors the Loft Board should consider in determining the rent adjustments pursuant to MDL section 286(2)(i). In addition, the Loft Board considered over 30 letters received from tenants and advocates for tenants and owners. The information provided was insightful and helpful in understanding the potential impact of these increases on the artist community, current trends in loft housing, and the effect of rent regulation on the housing market.
The following list represents a summary of the reoccurring points presented to the Loft Board in the oral and written comments:
- Tenants report that they are already paying market rent;
- Tenants report that most of them have had a recent increase in rent;
- A further increase in addition to the legalization milestone increases will result in the unit being over market rent and price-out the artist community;
- An increase prior to Article 7-B compliance after a lease expires may encourage an owner not to finish the Article 7-B work until after the lease expires to collect the increase;
- Tenants report that the buildings are in a state of disrepair and the owners fail to do proper maintenance; and
- Tenants have invested considerable sums of money by making improvements to make the loft spaces livable and owners should not reap the benefits of their financial investment prior to Article 7-B compliance.
After consideration of the comments received to date, the Loft Board determines that there should be no rent adjustment prior to Article 7- B compliance pursuant to MDL § 286(2)(i). The proposed rule sets forth this determination in the interim rent adjustments required in MDL § 286(2)(i) for interim multiple dwelling (IMD) units covered under MDL § 281(5).