Landlord's Proposed Demolition of Upper Floors Only Didn't Qualify for Approval

Landlord applied to the DHCR for permission to demolish a building containing rent-stabilized apartments and to proceed to evict tenants. The DHCR ruled against landlord, who then filed an Article 78 court appeal. Landlord claimed that the DHCR's decision was arbitrary and unreasonable.

The court ruled against landlord. Despite landlord's claim, the DHCR order didn't require that demolition require full razing of the building. But demolition under RSC Section 2524.5(a)(2) does refer to the entire "building" and not to only the residential portion. The general standard for determining whether an owner's plan meets the definition of "demolition" under the RSC is whether, at the least, the interior of the building will be totally gutted and one can "stand in the cellar and look up to the sky." Landlord's proposed demolition fell short of this criteria because it sought  to demolish only three of six building levels, demolishing the top three residential floors and leaving the basement and first and second floors intact. And while DHCR Operational Bulletin 2009-1 refers to demolition of "all of the apartments in the subject building," this reference didn't change the requirements of a full building demolition. The court found that the DHCR's decision had a rational basis and wasn't arbitrary or capricious. 

268 Bowery Realty Inc. v. DHCR: Index No. 160559/2022, 2023 NY Slip Op 33282(U)(Sup. Ct. NY; 9/22/23; Moyne, J)