Court Upholds Law Limiting MBR Increase

Facts: The City of New York, joined by several tenant groups, asked the court for a ruling that Local Law 73 of 1997 was legal. This law changed how capital value was calculated for purposes of setting annual maximum base rents for rent-controlled tenants. The Local Law 73 method resulted in lower maximum base rents than those resulting using the calculation method set forth in Real Property Law Article 12. In a prior case, an appeals court had ordered the DHCR to use the Article 12 method. In the new case, the city also asked the court to order the DHCR to use the method set forth in Local Law 73 to compute the 1996-97 maximum base rent for rent-controlled apartments. Court: The city wins. Local Law 73 doesn't conflict with the Urstadt Law, a state law barring more stringent regulations on housing than already exist. The court found that Local Law 73 merely amended how part of the existing MBR formula was determined. The law didn't impose new regulations or add anything new to the MBR formula.

City of New York v. DHCR: NYLJ, 4/12/00, p. 29, col. 6 (Sup. Ct. NY; DeGrasse, J)