Tenants in Building Substantially Rehabbed Under HDC Agreement Remained Rent Stabilized

Landlord applied to the DHCR for a ruling on the rent regulatory status of its building. The DRA ruled for landlord in part, finding that the building was exempt from rent stabilization based on substantial rehabilitation performed in 1986. However, the sub rehab was subject to a NYC Housing Development Corporation (HDC) Regulatory Agreement, as well as to a J-51 tax abatement starting in 1988. Tenants didn't receive J-51 lease rider notices. Therefore, as a result of both programs, tenants in occupancy at the programs' expiration in 2009 remained rent stabilized. Their apartments remained rent stabilized until these tenants moved out.

Landlord appealed and lost. Landlord argued that only 20 percent of building tenants were covered by the HDC Agreement. But that Agreement stated that "at least" 20 percent of the building units were reserved for low- or moderate-income families. And the Agreement specified that these tenants remained rent stabilized until they moved out. So the Agreement didn't provide that only 20 percent of tenants were subject to rent stabilization. 

1646 Union LLC: DHCR Adm. Rev. Docket No. KO210028RO (7/14/23)[4-pg. document]