MCI Increase Reduced by Cost of Elevator Controller and Selector Included in Prior MCI Increase

Landlord applied to the DHCR for rent hikes based on elevator and elevator room installation. The DRA ruled for landlord.

Tenants appealed and won in part. Tenants argued that the useful life of prior elevator work hadn't expired and exceptions to the useful life waiver rule didn't apply. In response, landlord claimed that the prior installation was a minor upgrade of the elevators that included only the controller and selector, while the new job was a modernization of the entire system. In 1994, the DHCR granted MCI rent increases for "elevator upgrading." The DHCR had disposed of records of the prior MCI application six years after the 1994 order was issued, so it had only the prior order to rely on. The Rent Stabilization Code included both "major upgrade of elevators" and "installation of new controllers and selectors" as separate MCIs, each with a 25-year useful life. In this case, landlord didn't apply for a useful life waiver. Landlord's new MCI application also showed that new controllers and selectors were installed as part of a major elevator upgrade. There wasn't sufficient proof to conclude that the prior elevator installation was a major elevator upgrade. But the prior work did include a selector and controller, so no "double dipping" was allowed.

The DHCR deducted the $297,690 spent on the MCI approved in 1994 from the total cost of the new work. The cost of the new MCI increase therefore was reduced from $24 per room per month to $17.51.

Various Tenants of 2130 Broadway: DHCR Adm. Rev. Docket No. ZL410013RT (3/29/23)[3-pg. document]