No MCI Increase Where Fewer Than 35% of Apartments Were Rent Regulated

Landlord applied to the DHCR in 2018 for MCI rent hikes based on installation of new boilers. The DRA ruled against landlord in October 2019 because, effective June 14, 2019, HSTPA had amended the rent laws to prohibit MCI rent increases for buildings with 35 percent or fewer rent-regulated rents.

Landlord appealed and lost. Landlord argued that the DRA retroactively, impermissibly, and unconstitutionally applied HSTPA provisions to deny MCI rent increases to which landlord would otherwise be entitled. The DHCR disagreed, finding no error of law and stating that Part K of HSTPA was properly applied to the pending MCI proceeding. As a mere applicant at the time the law was changed, landlord didn't possess a legal right to an MCI rent increase, or bear any increase in liability for past conduct as a result of the MCI amendments enacted by HSTPA, or have any new duties imposed on it with respect to transactions already completed. The DHCR also pointed out that several lowers courts as well as the Appellate Division, First Department had upheld similar DHCR rulings on other MCI applications.  

40 CPS Associates, LLC: DHCR Adm. Rev. Docket No. HX430027RO (5/30/24)[4-pg. document]