Former Mitchell-Lama Rent Regulation Not U/P Circumstance

(Decision submitted by David Hershey-Webb, Esq., of the Manhattan law firm of Himmelstein, McConnell, Gribben, Donoghue & Joseph, attorneys for the tenants.)

Landlord asked the DHCR to grant rent increases for rent-stabilized apartments in a building previously regulated until 2006 under the Mitchell-Lama program. Landlord claimed that there were "unique or peculiar" circumstances and that tenants' rents were a fraction of those generally prevailing in the same area for substantially similar housing accommodations. During 2007, while landlord's application was pending, Rent Stabilization Code (RSC) Section 2522.3(f)(4) was added. This code amendment provided that previous regulation of rent-stabilized apartments under the PHFL or other state or federal law would not, in and of itself, be considered a unique or peculiar circumstance. While landlord's application was pending before the DRA, landlord sued unsuccessfully in court to have the new code section declared either invalid or inapplicable to its application since it was filed before the code was amended. The DRA then denied landlord's application for rent increases.

Landlord appealed and lost. The DHCR noted that the DRA properly consolidated proceedings involving all affected tenants in the building since they were nearly identical. A court and appeals court also had now upheld the validity and retroactive application of RSC Section 2522.3(f)(4). Landlord also failed to demonstrate any unique or peculiar circumstances in the first place. Temporary rent increases for capital improvements granted while the building was under Mitchell-Lama, as well as the restricted rent structure in place at that time, were presumably factored into the purchase price of the building and needn't be considered by the DHCR. 

Columbus 95th Street LLC: DHCR Adm. Rev. Docket No. ZK420046RO (12/20/13) [8-pg. doc.]