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This little-known housing provision endangers rent-stabilized tenants

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How Major Capital Improvements (MCIs) can negatively impact tenants

A little-known housing provision has allowed landlords of rent-stabilized units to carry out a series of repairs on their buildings, thereby increasing rents for tenants. The Village Voice has explored this provision, known as major capital improvements (MCIs), in a new feature that highlights the difficulties faced by several tenants across the city.

Under this provision, landlords can carry out renovations on their buildings, and then tack the cost of those onto tenants’ rents. In one instance, Bronx resident Marco Angel’s rent increased from $1,300 to $1,800 after his landlord made repairs on his building.

Thankfully for tenants, increases related to MCIs are capped at six percent, so not all of the increase will be applied at once. And what’s more, the increases are prorated over a nine-year period for buildings that have more than 35 apartments, and over eight years for developments that have fewer units than that. All of that, however, is little comfort considering this is a permanent increase, not a temporary charge that landlords use to recoup their costs.

So why is this an issue? Some tenants argue that these repairs are not required, and landlords argue that these decades-old buildings are in desperate need of repairs. Every resident the Voice spoke with claimed repairs were not necessary; now Angel, along with several other tenants in different buildings are looking to fight $5.5 million in MCI increases.

Plus, it’s not just the landlords the tenants have to deal with; the Department of Homes and Community Renewal (DHCR) has to approve the increases before they go into effect, and there’s not a proper system in place to ensure that landlords are giving details about their expenditures.

For instance, landlords are required to submit invoices, but they don’t have to provide exact expenses unless DCHR suspects fraud and wants to investigate further. The agency also doesn’t consider if there are maintenance problems in the building or that tenants have to move elsewhere during the repairs. To deny an MCI request, they rely on data collected by the city’s Department of Buildings, so if there’s not a violation recorded there, the agency likely won’t just rely on tenant complaints to deny a request, according to the Village Voice.

Tenant advocates say that these expenses are more frequently being used to drive out long-term tenants from their homes. As Mayor Bill de Blasio pushes his affordable housing agenda forward (through the mix of high-end market-rate and affordable), advocates worry that prices will go up even in the outer boroughs of the city, increasing costs for rent-stabilized tenants, and ultimately displace them.