Increases Allowed After HPD Subsidized Renovations

Facts: Landlord applied to HPD in 1985 for a private housing finance loan for rehabilitating six 5-story buildings. Under this program, HPD resets rents in order to pay for the work done and properly maintain the housing units. Any rent-controlled apartments become decontrolled and subject to rent stabilization. HPD approved landlord's application, estimating that tenants' rents would rise from $60 or $80 per room to $115 per room. When the work was completed, tenants sued HPD and landlord. They claimed that the work wasn't substantially complete. They also challenged the rent increases, and claimed that the Private Housing Finance Law was unconstitutional. HPD and landlord asked the court to dismiss the case. The trial court refused, and HPD and landlord appealed. Court: HPD and landlord win. Under the Private Housing Finance Law program, tenants aren't constitutionally entitled to notice and an opportunity to be heard before rents are adjusted by HPD. Tenants were given notice of the planned renovations and proposed rent increases at least two years in advance.Yet, none of the tenants complained about the rent hikes until after the rehabilitation work was substantially completed. Tenant complaints about repairs were addressed throughout the rehab process.

Allerton Coops Tenants Assoc. v. Biderman: NYLJ, p. 21, col. 3 (4/22/93) (App. Div. 1 Dept.; Carro, JP, Milonas, Ellerin, Kupferman, Rubin, JJ)