MBR Update Landlords Appeal Dismissal
by Jenny Laurie

Annual increases for rent-controlled tenants are still on hold, as landlords are appealing a March State Supreme Court ruling rejecting their challenge to the Maximum Base Rent formula.

As reported in last month’s issue of Tenant, Judge Joseph Torraca dismissed a suit filed by landlord groups, who were trying to stop the implementation of a new city law that requires the state Division of Housing and Community Renewal to use an MBR formula that would result in lower rent increases. The landlords filed an appeal in mid-April.

This is the latest battle in a long legal war between tenants and landlords over the inner workings of the formula used to determine the MBR factor, which is used to set allowable increases for rent-controlled apartments. By following Local Law 73, passed last fall by the City Council, the DHCR will reach an MBR factor of 3% for the 1996/97 cycle. If the MBR is increased by 3%, thousands of rent-controlled tenants will not have to pay the usual 7.5% annual increase for 1996 and again in 1997. The landlords are demanding that the DHCR use a formula which would produce a 32.4% factor for the 96/97 MBR.

Tenants and their supporters are now waiting for the DHCR to act. The agency must chose between the 3% and the 32.4% increases. It must also set the MBR factor for the 1998/99 cycle—a number which would have been set long before now if there had been no lawsuits. Until the DHCR acts, rent-controlled tenants should continue to pay the rent that was in force before.