AR Docket Nos. FJ 930067 RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: FJ 930067 RO
WHITE PLAINS HOUSING
SERVICES, INC.
DRO DOCKET NO.:
(W)FD 930016 UC
TENANTS: VARIOUS
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
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
afford;
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
owner;
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
denied.
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
2500.9(b).
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
2500.9(e).
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
denied.
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
affirmed.
ISSUED:
JOSEPH A D'AGOSTA
Acting Deputy Commissioner
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