Tenants demand freeze on rent increases from apartment improvements

While a state agency stalls on issuing guidance for a regulated apartment improvement program, tenant groups are challenging pending rent increases at four buildings in Inwood.

The state’s division of Homes and Community Renewal indicated in November that it would release new guidance for the Major Capital Improvements program — which allows landlords to increase stabilized rents in exchange for building-wide improvements — by June 2020. And in another blow to landlords, the agency said any pending MCI applications will be subject to new rent-limiting restrictions from the Housing Stability and Tenant Protection Act of 2019.

But now, at the four Barberry Rose Management-owned buildings, tenants are facing rent increases ranging from $44 to $97 through the program, according to Lelia James, an attorney from Manhattan Legal Services who is representing the plaintiffs in a pending suit against HCR. The landlord is spending $208,000 for facade repairs, security cameras and a new roof.

Tenant advocate groups are now demanding that the state agency stop processing MCIs citywide until it issues the new guidelines, which will include a schedule for “reasonable costs.” The Metropolitan Council on Housing, Housing Justice for All, CASA, NorthWest Bronx Clergy and Community Coalition and Woodside on the Move said that they have had several meetings with HCR, including an Oct. 25 sit-down with Commissioner RuthAnne Visnauskas, to request the moratorium. That request has so far been denied, according to Andrea Shapiro, program manager at Met Council.

Reached late Tuesday afternoon, HCR declined to comment on any pending litigation or a potential moratorium on processing MCIs.

Christopher Sciocchetti, COO at Barberry Rose, declined to comment on the pending suit. But in a statement he said that MCIs are already put through a rigorous process with HCR before approval.

While the new schedule of costs has nothing to do with the pending lawsuit, Sciocchetti said, “it will definitely change things.” Landlord groups have argued that the new law does not allow for enough rent increases to recover the costs necessary to maintain aging buildings.

But Marika Dias, director of the Tenant Rights Coalition at Legal Services NYC who represents the plaintiffs, noted that the groups who pushed for the reforms had in fact been aiming for the “abolition of MCIs altogether.”

“Landlords use MCIs to raise rents in gentrifying neighborhoods where the rent rolls are lower than they’d like them to be,” Dias said. “MCIs increase the value of the building, and increase the rent, allowing them to double dip and recoup their investment from tenants.”