FB 610018-RT
          FB 610338-RT
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                               DOCKET NOS.:   
                                                  FB 610028-RT
                 NOEL    GAYLE    and                      FB     610338-RT
                 GEORGE GUTTNER,                  RENT ADMINISTRATOR'S
                                                  DOCKET NO.:
                                  PETITIONERS     DE 630119-OM


          The Commissioner has consolidated these petitions as they involve 
          common questions of law and fact.

          The above-named tenants  filed  a  petitions  for  administrative
          review of an  order  issued  on  January  23,  1991,  by  a  Rent
          Administrator concerning  the  housing  accommodation,  known  as
          1471 Taylor Avenue, Bronx, New York, where n  the  Rent  Adminis-
          trator determined that the owner was entitled to a rent  increase
          based on a major capital improvement (MCI).

          The Commissioner has reviewed all of the evidence in  the  record
          and has carefully considered that portion of the record  relevant
          to the issues raised by the petition for review.

          The owner commenced this proceeding on May 15, 1989 by filing  an
          application for a rent increase based on a major capital improve 
          ment, to wit - new windows at a total cost of $35,379.00.

          On July 14, 1989, the Division of Housing and  Community  Renewal
          (DHCR) served each tenant with a  copy  of  the  application  and
          afforded the tenants the opportunity to  review  it  and  comment

          The tenant of Apartment  20  answered  alleging  various  service
          deficiencies in her apartment and  the  tenant  of  Apartment  16
          alleged that the windows installation would entitle the owner  to
          a tax deduction, a savings on his fuel  bill,  and  increase  the
          value of the building.

          On January 23, 1991, the Rent Administrator issued the order here 
          under review finding that the installation qualified as  a  major
          capital improvement, determining that  the  application  complied
          with the relevant laws and regulations based upon the  supporting
          documentation submitted by the owner,  and  allowing  appropriate
          rent increases for rent controll d  and  rent  stabilized  apart-

          FB 610018-RT
          FB 610338-RT
          In their petitions for administrative  review,  the  tenants  re-
          quest modification of the Rent Administrator's order  and  allege
          inter alia  that  the  building  needed  new  windows,  that  the
          installation constituted routine maintenance,  not  an  MCI,  and
          that since the installation is tax deductible, decreases the fuel 
          bill, and increases the  value  of  the  building,  charging  the
          tenants is an unfair business practice.

          After careful consideration the Commissioner is  of  the  opinion
          that this petition should be denied.

          Rent increases for major capital improvements are  authorized  by
          Section 2202.4 of the Rent  and  Eviction  Regulations  for  rent
          controlled apartments and Section 2522.4 of t e  Rent  Stabiliza-
          tion Law for rent stabilized apartments.  Under rent control,  an
          increase is warranted where there has been since July 1,  1970  a
          major capital improvement required for the  operation,  preserva-
          tion, or maintenance of the structure. Under rent  stabilization,
          the improvement  must  generally  be  building-wide;  depreciable
          under the Internal Revenue Code, other than for ordinary repairs; 
          required for the operation, preservation, and maintenance of  the
          structure; and replace an item whose useful life has expired.

          The Commissioner notes that  the  possibility  that  the  owner's
          decision to make major capital improvements might  or  might  not
          impact  positively  on  his  tax  exposure,  energy  conservation
          efforts, or protection of his investment bears  no  relevance  to
          this proceeding.

          The record in the instant case indicates that the owner correctly 
          complied with the application  procedures  for  a  major  capital
          improvement and the  Rent  Administrator  properly  computed  the
          appropriate rent increases.  The  tenants  have  not  established
          that the increase should be revoked.

          This order and opinion is issued without prejudice  to  the  ten-
          ants' rights to file complaints based on a diminution of services 
          if the facts so warrant.

          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and
          Code, and the Rent and Eviction Regulations for New York City, 
          it is          

          ORDERED, that these petitions be, and the same hereby are, denied 
          and that the Rent Administrator's order be, and the  same  hereby
          is, affirmed.


                                                ELLIOT SANDER
                                                Deputy Commissioner

          FB 610018-RT
          FB 610338-RT


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