Justice Doris Ling-Cohan
Petitioner tenants’ association sought to overturn an order of respondent New York State Division of Housing and Community Renewal (DHCR), which denied a petition for administrative review (PAR) challenging a prior DHCR order. DHCR granted the owner a rent increase on rent-stabilized units after finding a major capital improvement (MCI). Petitioner opposed, alleging the work performed on the roof terrace was not an MCI as it was not part of the roof, hence did not benefit all tenants. DHCR found the terraces were part of the roof, thus improvements to them were valid MCIs, denying the PAR. The court noted DHCR’s answering papers conceded the terraces did not benefit all tenants, but argued its order granting the MCI reasonably held the terraces were components of the roof system, which did benefit all. Yet DHCR’s order specifically stated that the terraces were disallowed in calculating the MCI increases. The court ruled petitioners were correct in arguing such improvements on the terraces should not be included in an MCI rent increase, and granted the petition, remanding to DHCR for recalculation.
