Rent and Carrying Charge Increases.
28 RCNY § 3-10
in effect§ 3-10 Rent and Carrying Charge Increases.
(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.
(1) HPD shall hold a public hearing before acting upon any application or motion for an increase in the maximum rental/carrying charges per room to be charged tenant / cooperators of dwellings where HPD is the supervising agency under the provisions of the Private Housing Finance Law. Said hearing shall be held upon not less than thirty (30) days notice to the tenant / cooperators, provided, however, that with respect to a mutual housing company, the board of directors thereof must hold an informational meeting with the tenant / cooperators prior to any such hearing to discuss the reasons for the rental/carrying charges increase request. Such notice shall have annexed to it a copy of the application or motion for increase in rental/carrying charges and shall set forth the facts upon which the application or motion is based. A development assisted by a Federal Section 236 contract must also comply with Federal rent/carrying charge increase requirements.
(2) No applications or motion for an increase in the maximum rental/carrying charges per room shall be entertained or acted upon hereunder for a period of two years from the date of any previous order of the supervising agency for the increase of maximum rental/carrying charges affecting the same dwelling.
(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.
(1) An application for rental/carrying charge increases shall be submitted to HPD, together with a copy of the notice proposed to be delivered to the tenant / cooperators. (For the purpose of this subdivision (c) the term "rental" shall mean and be interchangeable with the term "carrying charges" as used for a mutual company and the term "tenant" shall mean and be interchangeable with the term "cooperator").
(2) The notice to be delivered to the tenants shall first be submitted to HPD for its approval and shall contain:
(i) In bold print, at the top,
TO ALL TENANTS OF (Name of Development) NOTICE OF APPLICATION (Housing Company) FOR RENTAL INCREASE
(ii) In the body of the notice:
PLEASE TAKE NOTICE, that upon the annexed application of (Housing Company) the Department of Housing Preservation and Development of the City of New York will be requested to approve an increase in the maximum average monthly room rental in the housing development of (Housing Company) from (present maximum) to (requested maximum); and PLEASE TAKE NOTICE FURTHER that a public hearing will be held at the time and place designated by HPD in the attached cover letter from HPD, and at that time evidence will be introduced in support of said application by the undersigned. Interested parties may appear in person to comment or may provide written comments to HPD. YOU MAY APPEAR IN PERSON OR BY ATTORNEY (Place) ________________________________________ Date (Date of Notice) ________________________________________ Date (Date of Notice) Housing Company ________________________________________ (Attorneys)
(3) Applications for rent increases shall be verified and submitted in quadruplicate. They shall contain:
(i) Name of housing company, location of development, date of organization and number of rental rooms.
(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.
(1) If the papers submitted to HPD are in form sufficient to warrant consideration by such agency, the applicant shall be notified in writing. Such notification shall include the date and place established by HPD for the public hearing on the application. The hearing shall be held within sixty (60) days of the date of such notification.
(2) Thereafter, the applicant shall notify each tenant in writing by notice approved by HPD of the pending application and the date and place set for the hearing. Such notification shall be sent to the tenants by ordinary mail or distributed under each apartment door and a copy shall be posted in a conspicuous public place on the lobby floor of each building affected. Additional copies of the notice to tenants shall be kept by the applicant for inspection by tenants requesting same. Satisfactory proof of notification to tenants must be supplied to HPD not less than ten (10) days prior to the date set for hearing.
(3) All books, records and financial data pertinent to the requested increase shall be made available to representatives of the Tenants Association in a rental development.
(4) The hearing shall be presided over by such hearing officer as may be designated by HPD for such purpose. The applicants and those opposing the application, in person or by duly authorized representatives, shall each be given a reasonable opportunity to be heard.
(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.
(1) A Tenants Association that is constituted pursuant to 28 RCNY § 3-17 shall be eligible for reimbursement of professional fees incurred when such Tenants Association retains an accountant, architect or engineer to review a rent increase application which has been submitted by a housing company to HPD and approved as to form by HPD. Only one accountant and/or one architect or engineer may be retained by a Tenants Association pursuant to this subdivision to review a particular rent increase application submitted by a housing company pursuant to this section.
(2) On the date upon which a housing company submits a rent increase application to HPD pursuant to paragraph one of subdivision (a) of this section, such housing company shall notify the Tenants Association in writing that it has submitted such application and that the Tenants Association may retain an accountant and/or an engineer or architect to review the rent increase application upon approval as to form of such application by HPD.
(3) A Tenants Association may retain a professional or professionals to review a rent increase application that has been approved as to form by HPD provided, however, that such professional or professionals shall be retained within ten days after receipt of the notice required pursuant to paragraph two of this subdivision. Said notice shall be deemed to have been received on the business day immediately following the day of mailing. Such Tenants Association shall provide a copy of the retainer agreement or agreements to the housing company and to HPD prior to submission of the professional report or reports pursuant to paragraph four of this subdivision.
(4) A Tenants Association which has retained a professional or professionals to review a rent increase application that has been approved as to form by HPD shall submit a copy of the report and the bill for services of such professional or professionals to the housing company and to HPD at least seven days prior to the scheduled date of the hearing on such application.
(5) The total fees charged by a professional or professionals retained by a Tenants Association pursuant to this subdivision shall be the fair and reasonable cost of the services rendered by such professional or professionals, but shall not exceed in total the amounts specified in the following schedule:
Size of Housing Development Maximum Total Fee(s)
Under 500 units $7,500
500 or more units $8,500
(6) The housing company shall remit payment for services to a professional or professionals who is retained by a Tenants Association pursuant to this subdivision within a reasonable time after receipt of the bill for services, and not later than thirty days after the hearing on the rent increase application.
(7) This subdivision shall not apply in the case of a rent increase application exclusively subject to the approval of HUD.
(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.
(2) Such application need not be in the same form as provided in subdivision (c) of this section, but must contain such information and documentation as required by HPD, which may include:
(i) Name of housing company, location of development, date of organization and number of rental rooms.
(ii) Dates of completion and of occupancy of the housing development.
(iii) Status with respect to tax exemption.
(iv) Present average room rent.
(v) Present income from non-dwelling spaces.
(vi) Assessed valuation of land and land improvements.
(vii) Such other information and data as may be pertinent.
(viii) Request for a specific rent increase to the applicable rental assistance subsidy payment standard.
(ix) The following exhibits and schedules, using a format for such exhibits and schedules available from HPD:
Exhibit I. A three-year projection of operations on a cash flow basis, complete with applicable schedules. In addition to the three-year projection, an actual base year must be used as a starting point, reflecting the information in the latest certified statement of financial condition prepared by a certified public accountant.
Exhibit II. A calculation of the monthly rental or carrying charge increase required up to the maximum payment standard for the applicable rental assistance subsidy program, detailing the number of tenants/cooperators receiving a rental assistance subsidy and their monthly rents or carrying charges on a per room basis in a format approved by HPD. This calculation must include beginning working capital or deficit working capital as of the beginning of the projection. This calculation must also 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.
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. Working capital or negative working capital resulting from prior years’ operations, as well as required reserves that were not funded, must be considered in the calculation of the required increase in the petition.
(x) Such further information on any of the matters listed above or on any other matters as HPD may require. Such additional information shall be verified and filed within the time stated by HPD. HPD may also request an amended or superseding application.
(3) Notwithstanding subdivision (b) of this section, no public hearing is required before HPD may act upon an application filed pursuant to this subdivision, and HPD may grant such an application more frequently than every two years. The provisions of subdivisions (e), (f) and (h) of this section do not apply to such application. Notwithstanding subdivision (c) or (d) of this section, there is no requirement to deliver notices regarding such pending application to the subsidized tenant/cooperators.
(4) Once HPD determines to grant such an increase request, the Assistant Commissioner of Housing Supervision shall issue an Order specifying the amount of the increase and the date(s) of its implementation.
(5) The rent or carrying charge for any dwelling unit for which a rent/carrying charge increase has been granted pursuant to this subdivision shall be reduced to the amount that has been approved for such unit in accordance with the subdivisions of this section other than this subdivision if either (i) the tenant/cooperator occupying such dwelling unit is no longer receiving the rental assistance subsidy, or (ii) the tenant/cooperator vacates the dwelling unit and the new tenant/cooperator for such unit is ineligible for or does not receive a rental assistance subsidy for which such increase was granted.
(Amended City Record 8/14/2019, eff. 9/13/2019; amended City Record 6/20/2023, eff. 7/20/2023; amended City Record 1/16/2024, eff. 2/15/2024)
Source: City of New York, Charter, Administrative Code and Rules (American Legal Publishing XML export, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/newyorkcity/latest/NYCrules/0-0-0-54000Fetched: 10/24/2026