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
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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 :
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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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