Gas Piping Cost Included as Part of Approved MCI Increase for New Burner

Landlord applied for MCI rent hikes based on installation of an oil/gas burner. The DRA ruled for landlord in part, denying that portion of the application that sought a rent increase for installation of gas piping. Landlord appealed and won. The DHCR pointed out that, in the past, the DHCR didn't permit an MCI increase for conversion from an existing oil-fueled burner to a gas-fueled burner. But following NYC's enactment of Local Law 43, the DEP required landlords to discontinue the use of heating oil No. 6 and No. 4 in boiler and burner systems and to convert to operating systems using either No. 2 oil or natural gas. So the DHCR now allowed certain conversion costs as MCIs for primary system conversions such as burners, provided the conversion was done in compliance with, or pursuant to, Local Law 43. Such costs included gas lines to the boiler/burner if done within property lines. In this case, during the PAR proceeding, landlord provided additional information to the DHCR showing that all piping was within the property line and the claimed MCI cost didn't include any fees assessed by Con Edison for connecting the system to the utility's service lines. So, the gas piping work was an eligible MCI cost and was added to the MCI rent increase.

Creg Realty Corp.: DHCR Adm. Rev. Docket No. GP430009RO (11/16/22)[3-pg. document]