Receipt of J-51 Tax Benefits for MCIs Reduces MCI Rent Hike While J-51 in Effect

The DRA granted landlord's application for MCI rent hikes in 2014, with an approved rent increase of $9.45 per room effective Oct. 1, 2013, for rent-stabilized apartments and Feb. 1, 2014, for rent-controlled units. In August 2014, HPD approved landlord's J-51 tax abatement application filed in connection with the same MCI work. On July 8, 2021, the DRA issued a follow-up order modifying the MCI rent increases based on the J-51 tax abatement. This required a temporary offset of the previously granted MCI increase by $0.81 per room per month effective July 1, 2014. This reduction in the MCI increase would remain in effect as long as the J-51 tax benefits remained in effect. The DRA directed landlord to refund or credit tenants with any excess rent collected as a result of its new order. Landlord appealed and lost. The DRA correctly modified the prior MCI order. There was no illegality, irregularity, or fraud, as claimed by landlord.

Community Realty Group LLC: DHCR Adm. Rev. Docket No. JT610014RO (7/8/22)[3-pg. document]