New York Amends IAI Rent Increase Provisions Under Rent Stabilization and Rent Control

On April 20, 2024, as part of the annual Budget Bill, New York State amended provisions of the ETPA, Rent Stabilization Law, and Rent Control Law to significantly modify changes made to individual apartment improvement (IAI) rent increase provisions that had been slashed in 2019 under the HSTPA. Under the new law, IAI rent increases are permanent, and there are two tiers for IAI increases. The new cap for IAIs is $30,000 within a 15-year period, although the amortization schedule remains at 1/168 and 1/180 respectively, depending on building size. In some circumstances the IAI cap can be $50,000 with an amortization rate of 1/144 for buildings with 35 or fewer units and 1/156 for buildings over 35 units. This higher cap applies if an apartment was occupied for 25 years immediately prior to a vacancy, or for units timely registered as vacant by Dec. 31 in 2022, 2023, and 2024. Under the amended laws, the DHCR must provide prior certification that the unit in question is eligible for the higher IAI. An apartment isn't eligible for the enhanced tier of IAI adjustments if, within five years prior, there has been a DHCR or court finding for triple damages based on rent overcharge or a finding of tenant harassment by an owner.

Individual Apartment Improvement Adjustments, NY State Bills S.8306C, A. 8806C, Part FF (4/20/24), amending ETPA Sections 4(6)(d) and 4(10-b)(a), NYC Admin. Code Sections 26-511(13), 26-511.1(12), 26-405(g), 26-405.1(a)(12), and Emergency Housing Rent Control Law Sections 4(a)(5) and 8-a(1) [10-pg. document]