State Sen. Michael Gianaris // Photo courtesy of Michael Gianaris

Gianaris, Barnwell Partner to End MCI Rent Increases

By David Brand

Queens Daily Eagle

A new bill could be a major improvement — and a relief — for tenants whose landlords are considering renovations.

State Sen. Michael Gianaris (D-Astoria) and Assembly Member Brian Barnwell (D-Woodside), a pair of Queens lawmakers, have partnered up to end current rules related to major capital improvements, or MCIs, which enable landlords to raise rent based on a percentage of the total cost of renovations.

“Too many tenants are priced out of their homes because of MCIs whose only improvement seems to be the landlord’s bottom line,” said Senator Michael Gianaris. “All New Yorkers deserve high quality, affordable homes and our proposal brings us closer to that goal by ensuring repairs are made without burdening tenants with unreasonable costs.”

The bill would prohibit rent increases tied to MCIs. Building owners who undertake renovations would instead qualify for a tax credit to offset the cost of improvements.

Owners who make improvements to buildings subject to rent stabilization and rent control laws can apply to the Division of Housing and Community Renewal for approval to raise rents. Some examples of MCI-eligible improvements include installing or renovating new boilers, windows, electrical rewiring, plumbing and roofs.

MCIs have been exploited by unscrupulous landlords who fudge the numbers and obtain phony receipts in order to jack up the cost of rent.

“It’s the wild, wild west of housing law and policy in the state of New York,” Manhattan State Sen. Liz Krueger told the Village Voice in 2016. “[Landlords learn to] just fill out anything as dishonestly or honestly as you choose, because no one’s ever going to look at it to cross-check you unless there’s a tenant complaint.”

Even when the improvements are above board, many tenants simply cannot afford rent increases. In 2014, the Furman Center on Real Estate and Urban Policy reported that 55 percent of all New York City renter households were rent burdened, meaning that their housing costs equalled to at least 30 percent of their income. A 2015 study by the Citizens’ Budget Committee revealed that Queens had the highest proportion of rent-burdened tenants of any borough.

“The Major Capital Improvement program is responsible for hundreds of millions of dollars in rent increases on rent regulated tenants,” Barnwell said. “It is unacceptable that we maintain a program pushing middle to low income New Yorkers out of their homes while allowing landlords to continue to make monstrous profits. Under our legislation, landlords will not be able to increase tenants’ rents due to repairs/improvements the landlord should already have made.”

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