Guide to Rent Increases for Rent Stabilized Apartments

5 PAGES

# 26FACT SHEET

A PUBLICATION OF THE DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION FS-26 (11/2023)

AT A GLANCE

This Fact Sheet can be

used along with a rent

registration history of

an apartment to assist

in determining if the

apartment’s registration

status and rent are lawful.

DEFINITIONS

Housing Stability and Tenant

Protection Act (HSTPA) of 2019:

The act, which went into eect

on June 14, 2019, made changes

to how rents can be raised and

changed formulas for vacancy

leases, Major Capital Improvements

(MCI) and Individual Apartment

Improvements (IAI).

Individual Apartment

Improvements (IAIs): When an

owner installs a new appliance

or makes an improvement to an

apartment, the owner may be

entitled to an IAI rent increase.

Major Capital Improvements

(MCIs): Building-wide

improvements such as boilers,

windows and roofs.

Vacancy lease: When a person

rents a rent stabilized apartment

for the ﬁrst time, the owner and the

tenant sign a vacancy lease.

SUMMARY AND HIGHLIGHTS

The Housing Stability and Tenant Protection Act (HSTPA) of 2019 made

changes to how rents can be raised and changed formulas for vacancy

leases, MCIs, and IAIs. MCI and IAI rent increases are now temporary, and

the amount that can be collected for IAIs is limited.

Options • Vacancy leases: HSTPA eliminated the statutory

vacancy rate and does not permit Rent Guidelines

Boards to establish a separate vacancy rate.

• Renewal leases: When a tenant signs a renewal lease,

they can choose between a one or two-year option and

the allowable guideline adjustment is set by the local

rent guidelines board.

• Improvements: Lawful rent increases for IAIs and/or

MCIs may be factored into rent increases.

Limitations • Under HSTPA, there are limitations on future MCI

increases, such as: an annual 2% rent increase cap,

only reasonable costs are recoverable, and MCI rent

increases are prohibited in buildings that contain 35% or

fewer rent-regulated apartments.

• In buildings with 35 units or less, owners can increase

the rent for an IAI up to 1/168th of the cost of the

improvement.

• In buildings with more than 35 units, owners can

increase the rent for an IAI up to 1/180th of the cost of

the improvement.

• Owners may collect no more than three IAI increases

within a 15-year period, and the total cost of the

improvements eligible for a rent increase calculation

cannot exceed $15,000.

• The written consent provided by the tenant in

occupancy for an IAI rent increase must be on a DHCR

form.

A PUBLICATION OF THE DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION FS-26 (11/2023)

FACT SHEET #26: GUIDE TO RENT INCREASES FOR RENT STABILIZED APARTMENTS

PAGE 2 OF 5

FACT SHEET #26: IN DETAIL

Introduction

This fact sheet will be updated annually to

reﬂect the new lease guideline rates. It can be

reviewed along with a rent registration history

of an apartment to assist in determining if the

apartment’s registration status and the rent being

charged are lawful. The apartment rent registration

history and a rent overcharge complaint form can

be requested online at www.hcr.ny.gov or at a

Borough Rent Oce.

The Housing Stability and Tenant Protection Act

(HSTPA) of 2019, which went into eect on June

14, 2019, made changes to how rents can be

raised and changed formulas for vacancy leases,

Major Capital Improvements (MCI) and Individual

Apartment Improvements (IAI). MCI and IAI rent

increases are now temporary and the amount

that can be collected for IAIs is limited. HSTPA

eliminates High Rent Vacancy and High Rent High

Income Deregulation and makes preferential

rents the basis for collection for the duration of

the tenancy. It also extends the rent overcharge

review time period from four to up to six years for

complaints ﬁled on or after the passage of HSTPA.

Eective December 15, 2022, Private Housing

Finance Law (PHFL) Section 610 allows owners

of aordable housing properties to collect

actual rents that are higher than legal rents, if

the following two conditions are met: a state or

municipal agency or other statutorily designated

party must issue speciﬁc approval in a regulatory

agreement, either new or amended, and a

government program provides rental assistance to

the apartment. See DHCR Notice RA-LR3 for more

details. Often rental assistance may be provided to

owners without an overarching state or municipal

regulatory agreement for the development.

In addition, a regulatory agreement may not

speciﬁcally authorize these higher rents with

respect to all or certain types of rental assistance.

Neither of these circumstances establish that an

actual rent higher than the legal stabilized rent

can be charged. Owners should be aware that for

example, FHEPS or individual section 8 housing

choice vouchers may not always qualify for an

actual higher rent.

Vacancy and Renewal Leases

HSTPA eliminated the statutory vacancy rate

and does not permit Rent Guidelines Boards to

establish a separate vacancy rate. Changes to

the rent regulations eective November 8, 2023

further clarify that the Rent Guidelines Board one

or two year lease guidelines adjustments shall be

applicable to both vacancy and renewal leases. No

more than one guideline adjustment can be added

to the rent in a calendar year for a vacancy lease.

Renewal lease guideline adjustments are subject

to the limitation of one guideline adjustment in the

same guideline year. A guideline year commences

on October 1 and ends the following September

30. Lawful temporary increases for Major Capital

Improvements (MCI) and Individual Apartment

Improvements (IAI) may also be added to the rent.

A DHCR Rent Stabilization Lease Rider/Addenda

is to be attached to the lease and it should contain

information on how the rent was calculated and on

any related Individual Apartment Improvements.

When a tenant signs a renewal lease, they can

choose between a one or two-year option and

the allowable guideline adjustment is set by the

local rent guidelines board. (See the Recent Lease

Guideline Rates chart.)

Eective June 14, 2019 owners who are collecting

a preferential rent, upon renewal of the lease,

can increase the legal and preferential rents by

the lawful guideline adjustments but only collect

a guideline adjustment based on the preferential

rent. The higher legal regulated rent and related

guideline adjustments can only be collected

when the apartment is vacated and rented to a

subsequent tenant. See Fact Sheet #40 for more

details.

Individual Apartment Improvements (IAI)

When an owner installs a new appliance or makes

A PUBLICATION OF THE DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION FS-26 (11/2023)

FACT SHEET #26: GUIDE TO RENT INCREASES FOR RENT STABILIZED APARTMENTS

PAGE 3 OF 5

an improvement to an apartment the owner may

be entitled to an IAI rent increase. Tenant written

consent for the improvement and rent increase

is only required if the apartment is occupied by a

tenant at the time of the improvement.

Written consent is not required for a vacant

apartment.

In buildings with 35 units or less, the amount the

rent can be increased for an IAI is limited to 1/168th

of the cost of the improvement. In buildings with

more than 35 units, the amount the rent can be

increased for an IAI is limited to 1/180th of the cost

of the improvement.

No more than three IAI increases can be

collected in a 15-year period and the total cost

of the improvements eligible for a rent increase

calculation cannot exceed $15,000. Work must

be done by a licensed contractor and there is a

prohibition on common ownership between the

contractor and the owner. The apartment must

be free and clear of any outstanding hazardous

and immediately hazardous violations. The written

consent provided by the tenant in occupancy must

be on a DHCR form. For informational purposes

only, the translated versions of this form are

available for review on DHCR’s website. Owners

are required to maintain supporting documentation

and photographs for all IAI installations, which

commencing June 14, 2020 will be submitted to

and stored by DHCR in an electronic format. The

IAI rent increase for improvements collected after

June 14, 2019 is temporary and must be removed

from the rent in 30 years, and the legal rent must

be adjusted at that time for guideline adjustments

that were previously compounded on a rent that

included the IAI.

The DHCR Lease Rider included with a vacancy

lease must notify the tenant of the right to request

from the owner by certiﬁed mail Individual

Apartment Improvements (IAIs) supporting

documentation at the time the lease is oered or

within 60 days of the execution of the lease. The

owner shall provide such documentation within

30 days of that request in person or by certiﬁed

mail. A tenant who is not provided with that

documentation upon demand may ﬁle form RA-90

“Tenant’s Complaint of Owner’s Failure to Renew

Lease and/or Failure to Furnish a copy of a Signed

Lease” to receive a DHCR Order that directs the

furnishing of the IAI supporting documentation.

Major Capital Improvements (MCI)

An owner is permitted rent increases to

recover the costs of building-wide major capital

improvements, such as the replacement of a

boiler or new plumbing. The owner must ﬁle an

application with DHCR and DHCR may issue

an order denying the increase or granting an

increase in part or in whole. After review of an MCI

application DHCR will issue an order and serve it

on the owner and all tenants in the building.

Under HSTPA, there are limitations on future

MCI increases, such as: only reasonable costs

are recoverable, and MCI rent increases are

prohibited in buildings that contain 35% or fewer

rent regulated apartments. The rent increase

approved by the DHCR order is collectible

prospectively, on the ﬁrst day of the ﬁrst month 60

days after issuance. There are no retroactive rent

increases. The collection of the increase is limited

to a 2% cap/yearly phase-in. The 2% cap also

applies to MCI rent increases not yet collected

that were approved on or after June 14, 2012. The

ﬁrst renewal lease eective after June 14, 2019

must reﬂect no more than a 2% increase. Upon

vacancy, the remaining balance of the increase

can be added to the legal rent. In buildings with

35 or fewer units, the cost of the MCI is amortized

over a 12-year period. In buildings with more than

35 units, the cost of the MCI is amortized over

12 ½ years. The building must be free and clear

of any outstanding hazardous and immediately

hazardous violations. The MCI rent increase is

temporary and it must be removed from the rent

in 30 years and the legal rent must be adjusted

at that time for guideline adjustments that were

previously compounded on a rent that included

the MCI rent increase. Vacancy lease tenants are

to be notiﬁed in their lease about pending MCI

applications.

A PUBLICATION OF THE DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION FS-26 (11/2023)

FACT SHEET #26: GUIDE TO RENT INCREASES FOR RENT STABILIZED APARTMENTS

PAGE 4 OF 5

RECENT LEASE GUIDELINE RATES

• Prior to the eective date of the Housing Stability and Tenant Protection Act (HSTPA) of 2019, June 14, 2019,

these guidelines applied only to lease renewals.

• Eective November 8, 2023, the rent regulation amendments clarify that guideline adjustments apply to

vacancy and renewal leases. Prior to this date, the footnote “G” below was used as a notation. In the light of this

amendment, the continued use of this footnote is no longer necessary.

EFFECTIVE DATE

OF RENEWAL

LEASE

NYC Nassau Rockland Westchester

Westchester

(tenant pays

either heat or

hot water)

City of

Kingston

1 year 2 year 1 year 2 year 1 year 2 year 1 year 2 year 1 year 2 year 1 year 2 year

10/1/17-

9/30/18

1.25% 2.00% 0.00% 0.00% 0.00% 0.50% 1.00% 1.50% 0.80% 1.20% — —

10/1/18-

9/30/19

1.50% 2.50% 1.00% 2.00% 0.00% 0.00%

2.00% 3.00% 1.60% 2.40% — —

0.00%

1.00%

0.00%

0.80%

— —

10/1/19-

9/30/20

1.50% 2.50% 1.50%

2.50%

0.00% 0.00% 1.75% 2.75% 1.75% 2.75% — —

10/1/20-

9/30/21

0.00%

G,2

1.00%

G,2

0.00%

— —

10/1/21-

9/30/22

1.50%

G,3

2.50%

1.00%

2.00%

0.50%

0.75%

0.50%

1.00%

0.50%

1.00%

— —

10/1/22-

9/30/23

3.25%

5.00%

2.00%

3.50%

0.50%

0.75%

2.00%

3.00%

2.00%

3.00%

— —

1.00%

G,4

2.00%

G,4

10/1/23-

9/30/24

3.00%

2.75%

G,5

3.20%

G,5

1.00%

2.00%

0.00%

0.50%

1.00%

2.00%

1.00%

2.00%

0.00%

G,6

0.00%

G,6

The guideline adjustment is authorized for all leases.

These guideline adjustments apply only to the Village of Ossining within Westchester County.

0% for the ﬁrst year of the lease and 1% for the second year of the lease.

0% for the ﬁrst six (6) months of the lease and 1.5% for the ﬁnal six (6) months of the lease.

These guideline adjustments apply only to the Village of Croton-on-Hudson, which expanded its ETPA coverage on

March 27, 2023 to buildings built before 1974 with six or more units. They apply to leases commencing between

March 27, 2023 and September 30, 2023.

For a two-year lease commencing on or after October 1, 2023 and on or before September 30, 2024, for the ﬁrst year of

the lease, 2.75%; and for the second year of the lease, 3.20% of the amount lawfully charged in the ﬁrst year, excluding

any increases other than the ﬁrst-year guideline adjustment.

These guideline adjustments apply only to the Village of Hempstead within Nassau County.

A PUBLICATION OF THE DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION FS-26 (11/2023)

FACT SHEET #26: GUIDE TO RENT INCREASES FOR RENT STABILIZED APARTMENTS

PAGE 5 OF 5

To visit a Borough Rent Oce, by appointment only, please contact:

QUEENS

92-31 Union Hall Street

6th Floor

Jamaica, NY 11433

718-482-4041

BROOKLYN

55 Hanson Place

6th Floor

Brooklyn, NY 11217

718-722-4778

UPPER MANHATTAN

163 W. 125th Street

5th Floor

New York, NY 10027

212-961-8930

LOWER MANHATTAN

25 Beaver Street

New York, NY 10004

212-480-6238

BRONX

1 Fordham Plaza

4th Floor

Bronx, NY 10458

718-430-0880

WESTCHESTER

75 South Broadway

3rd Floor

White Plains, NY 10601

914-948-4434

Rent Connect:

rent.hcr.ny.gov

Ask a question:

portal.hcr.ny.gov/app/

ask

For translation help:

hcr.ny.gov/language-

accessibility

Our website:

hcr.ny.gov/rent

HISTORICAL VACANCY LEASE RATES

• Pursuant to the Housing Stability and Tenant Protection Act of 2019, eective June 14, 2019, there is no

longer a separate statutory vacancy rate or a separate Rent Guidelines Board vacancy rate.

EFFECTIVE

DATE OF

VACANCY

LEASE

NYC Nassau Rockland Westchester

Westchester

(tenant pays

either heat or hot

water)

1 year 2 year 1 year 2 year 1 year 2 year 1 year 2 year 1 year 2 year

10/1/12 - 9/30/13

18.00% 20.00% 19.00% 20.00% 20.00% 20.00% 19.00% 20.00% 19.00% 20.00%

10/1/13 - 9/30/14

16.25% 20.00% 19.50% 20.00% 18.50% 20.00% 19.00% 20.00% 19.00% 20.00%

10/1/14 - 9/30/15

18.25% 20.00% 19.50% 20.00% 17.50% 20.00% 19.00% 20.00% 19.00% 20.00%

10/1/15 - 9/30/16

18.00% 20.00% 19.50% 20.00% 19.75% 20.00% 19.00% 20.00% 19.00% 20.00%

10/1/16 - 9/30/17

18.00% 20.00% 19.50% 20.00% 20.00% 20.00% 19.00% 20.00% 19.00% 20.00%

10/1/17 - 9/30/18

19.25% 20.00% 20.00% 20.00% 19.50% 20.00% 19.50% 20.00% 19.50% 20.00%

10/1/18 - 6/13/19

19.00% 20.00% 19.00% 20.00% 20.00% 20.00% 19.00% 20.00% 19.00% 20.00%

Prior to June 14, 2019, the Rent Act of 2015 provides that if a preferential rent was charged and

paid by the prior tenant, then the owner is entitled to increase the legal regulated rent by no more

than one of the following vacancy increases:

Last Vacancy Lease

Commenced: Vacancy Increase:

Less than 2 years ago 5%

Less than 3 years ago 10%

Less than 4 years ago 15%

4 or more years ago 20% (for a two-year lease)

the % listed for the eective date

and county in the table above

(for a one-year lease)