GA 430195-RT
                                  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


          -----------------------------------X 
          IN THE MATTER OF THE ADMINISTRATIVE:   ADMINISTRATIVE REVIEW
          APPEAL OF                          :   DOCKET NO.: GA 430195-RT 
                                             :  
             LUTHER PERRY,                   :   DRO DOCKET NO.: FG 420040-RP 
                                             :              (AL 420008-OH)
                                PETITIONER   :              
          -----------------------------------X                           
            

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW

          On January 9,  1992  the  above-named  petitioner-tenant  filed  a
          Petition for Administrative Review  against  an  order  issued  on
          December 31, 1991 by the  Rent  Administrator,  92-31  Union  Hall
          Street, Jamaica, New York concerning housing accommodations  known
          as 444 East 52nd Street, New York, New York, Various Apartments.

          The holders of the unsold  shares  in  the  subject  cooperatively
          owned building filed an application in December 1986  pursuant  to
          the Return on Capital Value ("hardship") provisions  of  the  Rent
          Regulations, Section 2202.8, seeking an increase  in  the  maximum
          rents  of  the  various  apartments  occupied  by  rent-controlled
          tenants who had  not  purchased  the  shares  allocated  to  their
          respective accommodations.

          On August 21, 1990, the Rent  Administrator  issued  orders  which
          adjusted the rents for the subject apartments by  various  amounts
          and over various periods of time  in  order  to  yield  an  8  1/2
          percent return on the valuation of the property (computed on a per 
          share basis).

          Both the landlord and various tenants filed administrative appeals 
          against said orders which resulted in the issuance,  on  July  15,
          1991, of an Order and Opinion (EI 430186-RO; EI  420141-RT)  which
          remanded the proceeding to the Rent Administrator to  explain  why
          an equalization  ratio  of  1.754  was  used  in  calculating  the
          building's  equalized  assessed  value  (rather   than   a   large
          equalization ratio claimed by the landlord) and to further  review
          the landlord's claimed operating expenses.

          On December 31, 1991 the  Administrator  issued  the  orders  here
          under review wherein the capital value of the subject premises was 
          determined to be $3,551,920.00.  Said  capital  value  amount  was
          arrived at by utilizing the  transitional  assessed  valuation  of
          $1,531,000.00   for   the   1986/87   tax   year   (reduced   from
          $1,541,000.00  by  the  Tax  Commissioner)   multiplied   by   the
          equalization factor applicable to New York City  of  2.32  (rather
          than 1.754) at the time the instant application was  filed.   Said
          orders  further  adjusted  the  maximum  rents  of   the   subject
          accommodations by varying amounts governed by the limitation of no 
          increases being greater than 7 1/2  percent  per  year  (with  the






          GA 430195-RT

          exception of apartment 3-F where a greater increase was  necessary
          to make the property equal its operating expenses)  in  accordance
          with the applicable provisions of the Rent  Law  and  Regulations,
          Sections 2201.6 and 2202.3(d).

          In this petition for administrative review the tenant of apartment 
          4-E contends, in substance, that the holders of the unsold  shares
          allocated to his and  other  rent-controlled  apartments  are  not
          owners entitled to a "hardship" rent increase under Section 2202.8 
          of the Rent Regulations; and  that  the  Administrator  failed  to
          consider his answer in  the  proceeding  below  wherein  he  cited
          Matter of Air Industries Co. v  N.Y.S.  Division  of  Housing  and
          Community Renewal, 517 N.Y.S. 2d 660 (1987) and Grand Leasing  Co.
          v DHCR, 537 N.Y.S. 2d 855 (A.D., 2 Dept., 1989) in support of this 
          contention.

          After  a  careful  consideration  of  the   entire   record,   the
          Commissioner is of  the  opinion  that  this  petition  should  be
          denied.

          At the outset the Commissioner notes that  the  propriety  of  the
          Administrator's order appealed herein was recently  considered  in
          an  Order  and  Opinion  which  granted,  in  part,  a  Landlord's
          petition for administrative review under Docket No.  GA  430166-RO
          and which remanded the proceeding to the Rent  Administrator  with
          direction to utilize the current full value assessment as  opposed
          to the "transitional" assessed value for purposes  of  calculating
          the capital value of the subject premises.

          The Commissioner  further  notes  that  the  cases  cited  by  the
          petitioner are not relevant  nor  do  they  support  the  tenant's
          contention  since  they  are  premised  upon  and  relate  to   an
          application  filed  under  a  different  law  which   specifically
          restricts "alternative"   hardship  applications  under  the  Rent
          Stabilization Code to "owners of buildings."

          Section 2202.8 of the New York City Rent Regulations, under  which
          the instant application was filed, allows  a  "landlord"  to  seek
          rent increases where the maximum gross rents from the property are 
          not providing a return of 8 1/2 percent on capital value.

          As defined in Section 2200.2(h) of the Regulations, a landlord  is
          an owner, lessor, sublessor or "other person entitled  to  receive
          or collect rent" for the use of any housing accommodations.

          The term "housing accommodations", as defined in Section 2200.2(e) 
          of the Regulations, includes any building or structure "or any 






          GA 430195-RT

          part thereof" occupied or intended to be occupied for  residential
          purposes.


          It is the  established  position  of  the  Division  (as  well  as
          predecessor rent agencies), and the  courts  have  so  recognized,
          that  rent  control  hardship   applications   may   properly   be
          entertained with respect to buildings which have been converted to 
          cooperative status.  See Application of Tager, 320 N.Y.S.  2d  947
          (Sup. Ct., N.Y.C. 1971).

          In point of fact,  the  Division  has  previously  determined  the
          holders of the unsold  shares  allocated  to  the  rent-controlled
          apartments in this cooperatively owned building eligible  for  and
          entitled to receive hardship rent increases under  Section  2202.8
          of the Regulations pursuant to a final Order and  Opinion  (Docket
          No. CPLAO 897/911) issued by the Commissioner  on  May  14,  1989,
          wherein it  was  found  that  the  equalized  assessed  value  (as
          distinguished from a sixteen year old sales price)  was  the  more
          appropriate index of the capital value of the subject property.

          THEREFORE, in accordance with  the  provisions  of  the  Rent  and
          Eviction Regulations for New York City, it is

          ORDERED, that this petition be, and the same hereby is denied.

          ISSUED:


                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


    

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