End of an EraA major tool used by landlords to recoup a portion of the expenses spent on building improvements and upgrades may soon become a relic of a bygone era. MCI increases, which were implemented in the 1970's have traditionally allowed owners of rent-stabilized or rent-controlled apartments to pass on the costs spent on building upgrades to the tenants by raising their rent. While not only serving as an opportunity to raise rent on regulated units which they may have otherwise been restricted from doing so, the MCI program also served as an incentive for landlords to improve their buildings with new boilers, windows or roofs, knowing that a portion of these expenses would be recouped.
However, if a pair of Queens lawmakers have their way, the MCI program will soon become a thing of the past. State Senator Michael Gianaris (D-Astoria) and Assembly Member Brian Barnwell (D-Woodside) have teamed up to introduce a bill in their respective chambers which would repeal the program and instead provide building owner with tax credits to offset the costs of upgrades. "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 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." Some lawmakers have gone a step further than the duo from Queens by asserting that the program has been abused by unscrupulous landlords who doctor their numbers and obtain phony receipts in order to raise the 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."
If the bill put through by Gianaris and Barnwell passes, not only would landlords be unable to raise the rent via the MCI program, they would also be forced to repeal any existing MCI increases as well.
"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."