AR Docket Nos. FJ 930067 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          APPEAL OF                            DOCKET NO.: FJ 930067 RO
            WHITE PLAINS HOUSING      
            SERVICES, INC.      
                                               DRO DOCKET NO.:     
                                                      (W)FD 930016 UC
                                                  TENANTS: VARIOUS     


          The above-named  petitioner-owner  timely  filed  a  Petition  for
          Administrative Review against an order issued on August 30,  1991,
          by the Rent Administrator at 55 Church Street, White  Plains,  New
          York,  concerning  housing   accommodations   known   as   various
          apartments at 4 Harmon Street, White Plains, New York, wherein the 
          Administrator  denied  the  owner's  application  for   an   order
          declaring the subject building exempt from  regulation  under  the
          Emergency Tenant Protection Act of 1974 (ETPA).  

          The Commissioner has reviewed all of the evidence  in  the  record
          and has carefully considered that portion of the evidence relevant 
          to the issues raised in the administrative appeal.

          The issue in this appeal is whether  or  not  the  nature  of  the
          petitioner and its use of the subject  building  are  such  as  to
          place said building among those which are, under the provisions of 
          the ETPA and the Tenant Protection Regulations (TPR)  exempt  from
          regulation thereunder?                     

          This proceeding was originally commenced on April 2, 1991, by  the
          petitioner's filing  of  an  Application  By  Owner  To  Determine
          Whether Building/Apartment Is Exempt  From  The  Emergency  Tenant
          Protection Act Or The Rent Stabilization Law. In said  application
          the petitioner claimed, in substance, that  the  subject  building
          contained six apartments (one of which was vacant at the  time  of
          the  application)  and  should  be  deemed  exempt   because   the
          apartments in it were used exclusively for charitable purposes  on
          a non-profit basis. Petitioner  also  alleged  that  it  had  been
          incorporated under the New York State  Not-For-Profit  Corporation
          Law; and that its purpose, in part,  is  to  provide  housing  for
          persons who  would  not  otherwise  be  able  to  afford  it.  The
          petitioner noted that with its application  it  was  submitting  a
          copy  of  a  Certificate  of  Amendment  to  its  Certificate   of
          Incorporation, which (it asserted)  showed  its  purposes,  and  a
          letter from the Internal  Revenue  Service,  which  (it  asserted)
          showed that it was an  organization  exempt  from  taxation  under
          Section 501(c)(3) of the Internal Revenue Code. 

          AR Docket Nos. FJ 930067 RO

          Upon being requested to do so by the Administrator, the petitioner 
          submitted additional information about itself and the use to which 
          it had placed the subject building. In substance,  the  petitioner
          alleged                       the                       following:
                    1. All of the households in the building were Section  8
          eligible   and   unable   to    afford    market    rate    rents.
                    2. The subject building had been allowed to  deteriorate
          by prior  owners;  without  the  petitioner's  intervention,  said
          deterioration would have continued;

                    3. All of the households have been "referred to  Section
          8" through the petitioner. Two of the households were moved within 
          the building and petitioner made all of the  arrangements  through
          the Department of Social Services to have these tenants moved;

                    4. Petitioner had arranged for one of the households  to
          have  homemaker  services,  although,  ultimately,   said   tenant
          declined                      said                       services;
                    5. Petitioner  was  currently  working  with  "OFA"  (no
          further name was given) to assist one of the "elderly  households"
          to get rid of "unwanted, illegal tenants";

                    6.  Petitioner  will  act  on  behalf  of  the   elderly
          households to have Meals on Wheels delivered to them;

                    7. Petitioner will keep the rents "at Section 8  levels"
          so that the apartments will be affordable to tenants unable to pay 
          market rate rents;  petitioner  borrowed  $239,00.00  to  renovate
          the  subject  building  and  the  Section  8  rents  will   enable
          petitioner to pay its mortgage and operating expenses;

                    8. Petitioner is a quasi-government organization  as  it
          is a neighborhood  preservation  corporation,  its  administrative
          funds come through the DHCR and funds  to  purchase  the  building
          came from the DHCR; also rehabilitation funds, which came directly 
          through Westchester County, but which originated  with  HUD,  were
          used; therefore, the subject building should be deemed exempt as a 
          building "owned or operated by the United  States,  State  of  New
          York, any  political  subdivision  ,  agency,  or  instrumentality
          thereof, any municipality or any housing agency".

          In  response  to  the  Administrator's  request  for  a  copy   of
          petitioner's funding agreement with the DHCR, petitioner submitted 
          a copy of a contract between itself  and  the  DHCR,  dated  March
          8,1989.  Said  contract,  in  substance  ,  related  to  an  Urban
          Revitalization Project (the Project) proposed by  the  petitioner.
          Under the contract, DHCR  agreed,  on  an  open  ended  basis,  to
          advance funds totaling up to $ 161,312.00 so that  the  petitioner
          could carry out the Project in accordance with the  plans  it  had
          submitted to the DHCR. The subject funds were proffered as part of 
          the DHCR's Urban Initiatives Program.

          In response to the owner's application, the tenants of all five of 
          the  occupied   apartments   signed   an   answer   opposing   the

          AR Docket Nos. FJ 930067 RO

          application. In substance, the tenants asserted the following:

                    1. The owner's status as a not-for-profit corporation is 
          irrelevant; there is no  evidence  that  the  premises  are  being
          operated for charitable purposes, the tenants  are  not  receiving
          any  benefits  from  an  affordable  housing  or  social  services
          program provided for by the owner;

                    2. The building was being renovated  to  bring  it  into
          conformity with the requirements of the  federal  Section  8  rent
          subsidy program; the work was done while the tenants continued  to
          reside in their apartments;

                    3.  Tenants  have  been  coerced  and  threatened   with
          eviction in an effort to get them to agree  to  accept  Section  8
          leases, which provide for rents in excess of what the tenants  can

                    4. The tenants were never advised  that  the  Section  8
          leases provide for rents in excess of the ETPA legal rents; if the 
          Section 8 subsidies dry up or are denied  at  some  point  in  the
          future, the tenants who cannot afford those higher rents  will  be
          forced out of the building;

                    5. Tenants who currently, legally (under  the  ETPA  and
          Section 235f of the Real Property Law) share their apartments with 
          family members and others, are  threatened  with  eviction  [under
          Section 8] if these persons fail to vacate; even  though  some  of
          these family members and other occupants may have  certain  rights
          to continued occupancy  under  the  amended  regulations  defining
          "immediate family members".

                    6. The tenants currently enjoy the assurance that  their
          rents cannot be increased arbitrarily  or  excessively;  and  they
          currently enjoy the assurance that they  will  not  be  threatened
          with eviction without cause. The owner  has  attempted  to  charge
          rents in excess of those permitted under the  ETPA  (charging  the
          tenants a rent increase of $125.00 per month based on the  owner's
          allegedly increased operating expenses); and the  owner's  conduct
          in the past indicates that if the building is deemed  exempt,  the
          owner's conduct will continue in this fashion; the tenants believe 
          that the owner's status as a not-for-profit  corporation  provides
          no guarantee that they will enjoy continued affordable housing.

          In the appealed  order,  the  Administrator  determined  that  the
          subject building cannot be deemed exempt because the record  shows
          that the building is not operated exclusively  for  charitable  or
          educational purposes on a non-profit basis.

          In  the  Petition,  the  owner  claims,  in  substance,  that  the
          Administrator's order should be reversed or this proceeding should 
          be remanded to allow for consideration of the application  on  one
          or more of the following bases: a) under Section 2500.9(b) of  the
          TPR, petitioner is an  agency  or  instrumentality  of  government
          and, therefore, a building owned by it is  exempt;  b)  under  TPR
          Section 2500.9(c), petitioner is subject  to  supervision  by  the
          DHCR and, therefore,  the rentals charged in the subject  building

          AR Docket Nos. FJ 930067 RO

          would  be  subject   to   the   same   supervision;   under   said
          circumstances, the subject building should be  deemed  exempt;  c)
          the building is  at  or  near  the  completion  of  a  substantial
          rehabilitation by virtue of which, under  TPR  Section  2500.9(e),
          the subject building should  be  deemed  exempt.  The  owner  then
          reiterates that the  subject  building  should  be  deemed  exempt
          under TPR Sections 2500.9(f), on the basis that the petitioner  is
          a  charitable  organization   operating   the   subject   building
          exclusively in furtherance of its charitable purposes,  n  a  not-
          for-profit basis.

          In answering the Petition the attorneys for the  4  Harmon  Street
          Tenants'  Association,  Westchester  Legal  Services,  Inc.,  have
          submitted a statement signed by the tenants  of  all  six  of  the
          apartments in  the  subject  building.  In  that  statement,  said
          attorneys assert, in substance, that the Petition should be denied 
          for the following reasons:
                    1. The Petition was not timely, having been  filed  more
          than thirty-five days of the issuance of the appealed order;

                    2. The tenants are not receiving any benefits  under  an
          affordable housing or social  services  program  provided  by  the

                    3. Petitioner's receipt of funding from  the  DHCR  does
          not make petitioner an agency  or  instrumentality  of  government
          such as to warrant a finding that the subject building is exempt;

                    4. Petitioner has provided no  substantiation  or  legal
          authority for its assertion that the rents in the subject building 
          are set by the DHCR or, other than under the ETPA, subject to  the
          DHCR's supervision.

          The Commissioner is of the opinion that  the  Petition  should  be

          The Commissioner notes that the Petition  was  postmarked  October
          4,1991 and therefore finds that it was timely filed.

          The Commissioner finds that  the  housing  accommodations  in  the
          subject building are not owned or operated by the United States of 
          America, the State of New York, any political subdivision,  agency
          or instrumentality thereof  nor  by  any  municipality  or  public
          housing authority.  The  Commissioner  therefore  finds  that  the
          subject building may  not  be  deemed  exempt  under  TPR  Section

          The Commissioner finds that the rentals in  the  subject  building
          are not fixed by or  subject  to  the  supervision  of  the  State
          Division of Housing and Community Renewal except insofar  as  said
          rentals are regulated under the ETPA. The  Commissioner  therefore
          finds that the subject building may not be deemed exempt under TPR 
          Section 2500.9(c). 

          The Commissioner further finds that viewing the  totality  of  the
          submissions, both below and on appeal, the petitioner has not  met
          its burden of proof in its attempt to establish that  the  subject

          AR Docket Nos. FJ 930067 RO

          building has been substantially rehabilitated within  the  meaning
          of TPR Section 2500.9(e). The Commissioner  therefore  finds  that
          the subject building may not be deemed exempt  under  TPR  Section

          The Commissioner finds that the petitioner is not an  organization
          operated exclusively for charitable or educational purposes within 
          the meaning of TPR Section 2500.9(f). The  Commissioner  therefore
          finds that the subject building may not be deemed exempt under TPR 
          Section 2500.9(f).

          The Commissioner therefore  finds  that  the  Petition  should  be

          THEREFORE,  pursuant  to  all  of  the  applicable  statutes   and
          regulations, it is

          ORDERED, that this Petition be, and the same hereby is denied  and
          that  the  Administrator's  order  be,  and  the  same  hereby  is


                                          JOSEPH A D'AGOSTA
                                          Acting Deputy Commissioner

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